Nestlé (NESN) H2 2025 (Media) earnings summary

Executive summary

• Nespresso will remain a globally managed business due to its unique direct-to-consumer model and global brand consistency, not integrated into the new coffee pillar.

• Achieved organic growth (OG) of 3.5% in 2025, with real internal growth (RIG) of 0.8% and pricing of 2.8%, despite challenging macroeconomic conditions and significant foreign exchange headwinds.

• The company is focusing on four strategic pillars: coffee, petcare, nutrition, and food & snacks, each led by a strategic business unit head, aiming for clarity and growth; these represent 70% of sales.

• Increased marketing investment and organizational simplification, with a performance culture emphasizing accountability and results.

• Completed integration of Nutrition and Health Science, and advanced negotiations to divest the remaining ice cream business.

Financial highlights

• Reported sales were CHF 89.5 billion, down 2.0% year-over-year due to a 5.7% negative foreign exchange impact.

• Underlying trading operating profit (UTOP) was CHF 14.4 billion, with a margin of 16.1%, down 110 bps.

• Net profit fell 17.0% to CHF 9.0 billion; basic EPS decreased 16.3% to CHF 3.51.

• Free cash flow was CHF 9.2 billion, down 14.2% year-over-year, but improved in H2-25.

• Dividend per share proposed at CHF 3.10, up 1.6%.

Outlook and guidance

• Organic growth guidance is set at 3–4% for 2026, with RIG accelerating and UTOP margin improving, especially in H2.

• Free cash flow forecasted above CHF 9 billion.

• Guidance includes a -20 bps impact from the infant formula recall, with further downside risk possible.

• Portfolio reviews will continue periodically, but no new divestments or acquisitions are currently planned.