Nestlé (NESN) H2 2025 (Media) earnings summary

Executive summary

• Nespresso remains a globally managed business due to its unique direct-to-consumer model and brand consistency, even as other units integrate into four strategic pillars: Coffee, Petcare, Nutrition, and Food & Snacks, which represent 70% of sales.

• Achieved organic growth of 3.5% in 2025, with real internal growth of 0.8% and pricing of 2.8%, despite macroeconomic and FX headwinds.

• Completed integration of Nutrition and Health Science, and advanced negotiations to divest the remaining ice cream business to Froneri, with no change in JV ownership.

• Ongoing portfolio review ensures alignment with growth objectives, with no immediate further divestments announced.

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

Financial highlights

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

• Underlying trading operating profit was CHF 14.4 billion, margin 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

• 2026 organic growth expected at 3–4%, 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.

• The company is prioritizing real internal growth as the main lever for margin, cash flow, and shareholder returns.