NESTLÉ IN TALKS TO SELL ICE-CREAM ARM AS FORMULA RECALL HITS PROFITS

 LONDON, Feb 19 (Bernama-PA Media/dpa) — Nestlé has said it is in advanced negotiations over the sale of its remaining ice cream business as it indicated profits have been squeezed by the impact of baby formula recalls, reported PA Media/dpa.

The Swiss consumer giant confirmed it is in talks to sell its ice cream business to Froneri, an ice cream joint venture with private equity firm PAI Partners, which owns brands such as Häagen-Dazs.

The talks come as Nestlé also begins the process of a potential sale of its waters and drinks business, which produces brands such as San Pellegrino and Perrier.

It said the division, reportedly worth US$5.94 billion, is expected “to be deconsolidated from 2027”.

The moves form part of a strategy by recently appointed CEO Philipp Navratil to drive a turnaround amid pressure from shareholders.

It came as the company reported that underlying trading operating profit dipped by 8.4 per cent to 14.4 billion Swiss francs (US$18.64 billion) in 2025.

Nestlé said it was affected by higher costs related to restructuring and other trading items, with the increase largely driven by impairments, litigation, and provisions for inventory write-offs following the infant formula recall.

In the UK, Nestlé and rival Danone have announced a raft of recalls since the start of the year.

In January, Nestlé started a precautionary product recall of a number of batches of 12 SMA Infant Formula and Follow-On Formula products in the UK due to the possible presence of cereulide.

On Thursday, Nestlé said its 2025 figures will include a 75-million-franc impact to the underlying profits due to the impact of baby formula recalls on its sales returns.

The formula recall was also linked to an inventory write-off worth 110 million francs.

The consumer group said that the formula recall has been completed and it is “now focused on replenishing stocks”, having restarted production at its formula factories.

In the latest update, Nestlé revealed that reported sales slipped by 2 per cent last year after higher sales was offset by currency exchange rates.

It reported that organic sales grew by 3.5 per cent, partly driven by a 2.8 per cent rise in pricing for the year.

Navratil said: “I am encouraged by our performance during 2025, which reflects the targeted actions we have taken in a difficult external environment.

“We are accelerating our strategy. We are focusing our portfolio on four businesses, led by our strongest brands, with prioritised resources and a simplified organisation.”

-- BERNAMA-PA MEDIA/DPA