Nestlé S.A.

Nestlé reported first-half organic sales growth of 3.6%, with RIG of 1.5% and pricing of 2.1%. Q2 RIG improved to 1.8% from 1.2% in Q1, and growth was described as broad-based with all categories posting positive RIG in Q2. H1 UTOP margin was 16.4%, down 10 basis points year over year. Underlying EPS increased 4% in constant currency but declined 2.4% at actual exchange rates. Free cash flow was CHF 3.4 billion, net debt was CHF 56.3 billion versus CHF 60 billion a year ago, and H1 cost savings were CHF 600 million, bringing cumulative savings to CHF 1.7 billion. For 2026, management tightened organic growth guidance to 3% to 4%, kept the view that UTOP margin will improve versus 2025, said H2 margin should be broadly similar to H1, and reiterated free cash flow above CHF 9 billion.

Philipp Navratil framed the quarter as evidence that Nestlé’s execution is improving and said the company is now focused on consistent delivery. He emphasized a strategy centered on RIG-led growth, a sharpened portfolio, and more deliberate investment in marketing, innovation, and AI-enabled execution. He also said the Waters partnership, divestments, and other portfolio actions reflect a focus on the businesses where Nestlé can create the most value.

Anna Manz highlighted H1 organic growth of 3.6%, UTOP margin of 16.4%, and underlying EPS up 4% in constant currency but down 2.4% at actual FX. She said free cash flow was CHF 3.4 billion, net debt was CHF 56.3 billion, and the company delivered CHF 600 million of incremental savings in H1, slightly ahead of plan, with cumulative savings at CHF 1.7 billion. She also said marketing investment rose to 8.9% of sales, and although H2 will include some pressure from transportation and energy costs tied to the Middle East conflict, the second-half margin should be broadly similar to the first and full-year free cash flow should be above CHF 9 billion.

Analysts pressed on PetCare weakness in the U.S., European customer delistings, coffee pricing dynamics, Nespresso consumption softness, and whether Nestlé would need to enter U.S. fresh pet food or U.S. infant formula. Management said PetCare’s U.S. weakness was mainly retailer inventory reduction and that sell-out is improving, while the European delistings were described as normal-course, mostly tied to coffee and confectionery, and not material at the group level. On coffee and Nespresso, management said price moves are staggered, there was no prebuy in Starbucks, and Nespresso is still benefiting from Vertuo-led growth and household acquisition rather than broad consumer weakness.