Nestle 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.
The Swiss consumer giant confirmed talks regarding selling the ice cream business to Froneri, an ice cream joint venture with private equity firm PAI Partners – which owns brands such as Haagen-Dazs.
The talks come as Nestle also starts the process for a potential sale of its waters and drinks business, which makes San Pellegrino and Perrier.
It said the division, reportedly worth £4.4 billion, is expected “to be deconsolidated from 2027”.
The moves are part of a strategy from recently-appointed boss 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% to 14.4 billion Swiss francs (£13.8 billion) in 2025.
Nestle said it was impacted by an increase in costs linked to restructuring and other trading items, with the rise largely linked to impairments, litigation and the allowance for inventory write-offs due to the infant formula recall.
In the UK, Nestle and rival Danone have announced a raft of recalls since the start of the year.
In January, Nestle 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, Nestle said its 2025 figures will include a 75 million Swiss franc (£71.9 million) 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 Swiss francs (£105.5 million).
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, Nestle revealed that reported sales slipped by 2% last year after higher sales was offset by currency exchange rates.
It reported that organic sales grew by 3.5%, partly driven by a 2.8% rise in pricing for the year.
Mr 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.”
