Nestlé's new leadership is tasked with sorting out a retail outlet selling a diverse range of merchandise, allegedly containing both legitimate and questionable items.
Nestlé Faces Pressure for Change as Shareholders Call for Strategy Review
In a significant move, Even Kai Lehmann, a major Nestlé shareholder, has called for a review of the company's strategy. This call comes as Nestlé grapples with a number of challenges, including a decline in consumer interest due to increasing prices, weak growth, and a struggling stock market today.
The Swiss food giant is currently sitting on a massive net debt of 60 billion Swiss francs, largely due to share buybacks. This financial burden is impacting Nestlé's ability to invest and pay dividends, leading to concerns among shareholders.
One of the key issues facing Nestlé is the need to reduce the number of its brands to remain competitive. ZKB analyst Patrik Schwendimann suggests that the company must increase its pace of innovation to stay relevant in the stock market today. Reto Lötscher from Luzerner Kantonalbank has also emphasised the need for new impulses and new faces for a fundamental restructuring.
In an attempt to address these issues, Nestlé has appointed Philipp Navratil as the new CEO, effective immediately. Navratil, who previously led the Zara parent company, Inditex, is expected to bring good prerequisites in terms of speed due to his background in the fashion industry. Pablo Isla, who was previously in charge of Inditex, has also been appointed as the new chairman of the board of directors at Nestlé, effective October 1.
The departure of Laurent Freixe, the former CEO of Nestlé, was not under ideal circumstances. Freixe was dismissed due to not disclosing a romantic relationship with a subordinate employee. This incident has further eroded confidence in the company's leadership and governance.
Nestlé's strategy of providing everything that ends up on the plate is deemed not specific enough for the market. The company is currently lagging behind rivals such as Danone and Unilever in key indicators such as sales growth and stock price development.
To help alleviate its debt, Nestlé is considering selling part of its stake in the cosmetics giant L'Oréal. The current total market value of Nestlé's approximately 20.1% stake in L'Oréal is around 38 to 40 billion euros. This valuation is based on L'Oréal's market capitalization of about 203 to 215 billion euros as reported in 2025.
The confidence in the reliability of the Nestlé dividend has suffered, with shareholders expressing concerns about the company's financial health. Nestlé's former chairman, Paul Bulcke, originally scheduled to step down in April 2026, resigned due to increasing shareholder pressure.
Speich has expressed a positive opinion about Pablo Isla's role in Nestlé's future, citing his speed and prerequisites from the fashion industry as potential assets. As Nestlé moves forward, it will be interesting to see how Isla and Navratil navigate the challenges facing the company and steer it towards a more sustainable and profitable future.
The company's stock price, currently trading around 71 francs, is far below its peak of nearly 130 francs at the beginning of 2022. The road ahead may be difficult, but with the right strategies in place, Nestlé has the potential to regain its position as a market leader.
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