Nestlé (NESN) H1 2026 earnings summary

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 the Fuel for Growth program, delivered CHF 0.6 billion incremental savings in H1 and cumulative CHF 1.7 billion, enabling reinvestment in growth and strong free cash flow.

• Net profit fell 31.4% to CHF 3.5 billion, mainly due to restructuring costs and a CHF 1.3 billion write-down of assets held for sale.

• The company is on track to meet 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 and 10 basis points.

• Free cash flow reached CHF 3.4 billion, a significant improvement versus prior year, up 46.3%.

• Underlying EPS was CHF 2.22, up 3.4% in constant currency but down 2.4% at actual rates.

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

Outlook and guidance

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

• UTOP margin expected to improve versus 2025, with H2 margin broadly similar to H1.

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

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

• Medium-term margin outlook remains at 17% or more, with positive progression expected into 2027.