Nestlé (NESN) investor relations material

Executive summary

• Organic growth reached 3.6% in H1 2026, with real internal growth (RIG) of 1.5% and pricing of 2.1%; growth was broad-based across all zones and categories, with emerging markets outperforming developed markets.

• Portfolio sharpening continued with a new Waters joint venture, divestments in VMS and ice cream, and the acquisition of yfood; Blue Bottle Coffee was divested.

• Efficiency gains and cost savings, including Fuel for Growth, enabled reinvestment in growth and strong free cash flow.

• UTOP margin was 16.4%, with sequential recovery but down 10 bps year-over-year; net profit fell 31.4% to CHF 3.5 billion due to restructuring and asset write-downs.

• The company remains on track to deliver its 2026 guidance, focusing on consistent execution, efficiency, and growth platforms.

Financial highlights

• Delivered 3.6% organic sales growth in H1 2026, with RIG of 1.5% and pricing of 2.1%; reported sales were CHF 43.1 billion, down 2.5% year-over-year due to a negative FX impact of 6.2%.

• Underlying trading operating profit (UTOP) was CHF 7.1 billion (16.4% margin), down 2.8% year-over-year; trading operating profit margin was 14.5%, down 110 bps.

• Free cash flow rose to CHF 3.4 billion from CHF 2.3 billion in H1 2025, driven by lower capex and working capital outflow.

• Net debt was CHF 56.3 billion as of June 30, 2026, reflecting the CHF 8.0 billion dividend payment.

• Underlying EPS was CHF 2.22, down 2.4% (up 3.4% in constant currency); basic EPS dropped to CHF 1.35 from CHF 1.97 year-over-year.

Outlook and guidance

• Organic growth guidance for 2026 is 3–4%, with RIG expected to accelerate versus 2025.

• UTOP margin is expected to improve versus 2025, targeting 17% or more, with H2 margin broadly similar to H1.

• Free cash flow is forecasted above CHF 9 billion for the full year.

• Foreign exchange is expected to negatively impact sales by about 3%.