Nestlé has dismissed its CEO Laurent Freixe with immediate effect. The reason is an internal investigation that confirmed an undisclosed relationship with a direct employee, thus violating the code of conduct. His position will be filled by Philipp Navratil, previously head of the coffee brand Nespresso.

Freixe was only appointed CEO in August 2023 after almost four decades at the company. His abrupt departure hits Nestlé during a phase of weakening business: Sales in core areas are stagnant, French authorities are investigating possible violations in water filtration, and the company had to recall frozen products in the US due to contamination.

The investigation against Freixe began in the spring after tips through the internal reporting system "Speak Up." Initially deemed unfounded, a second investigation involving external lawyers confirmed the allegation. The board of directors consequently drew the conclusion.

Navratil has been with Nestlé since 2001, started as an internal auditor, and made a career in Latin America and the coffee business. Under his leadership, Nespresso grew profitably despite increasing competition. Analysts like Jean-Philippe Bertschy from Vontobel speak of an "encouraging personnel decision" - especially in a year when the stock has lost more than 40 percent from its high in 2022.

The change of power also coincides with a time of major upheavals on the board of directors. Long-term president Paul Bulcke plans to step down in June 2025; former Inditex CEO Pablo Isla is being considered as his successor.