Nestlé (NESN) H2 2025 earnings summary

Executive summary

• Organic growth reached 3.5% in 2025, with positive real internal growth and pricing, supported by strategic portfolio focus and improved execution, despite challenging macroeconomic and FX conditions.

• Performance culture and organizational efficiency accelerated execution, with strengthened accountability and faster decision-making.

• Major internal reorganization combined Americas and integrated Greater China into AoA; Nutrition and Health Science were merged for efficiency.

• The infant formula recall in early 2026 impacted UTOP margin and will affect organic growth and RIG in 2026.

• Net profit declined to CHF 9,033 million, with basic EPS at CHF 3.51, reflecting FX headwinds and margin pressure.

Financial highlights

• Sales totaled CHF 89.5 billion, down 2.0% year-over-year due to a 5.7% negative FX impact; organic growth was 3.5% (RIG 0.8%, pricing 2.8%).

• Underlying trading operating profit (UTOP) margin was 16.1%, down 110 bps, mainly due to gross margin pressure and increased A&P spend.

• Free cash flow reached CHF 9.2 billion, exceeding guidance.

• Net debt reduced by CHF 4.6 billion to CHF 51.4 billion, with leverage at 2.85x EBITDA.

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

Outlook and guidance

• 2026 organic growth expected at 3–4%, with accelerating RIG and UTOP margin improvement, despite a -6% FX headwind at current rates.

• Free cash flow forecasted above CHF 9 billion.

• Guidance includes a 20 basis point sales impact from the infant formula recall; further downside risk possible.