Press Release: Nestle: Full-year results 2025 and -3-

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Total reported sales were CHF 89.5 billion. Organic growth was 3.5%. Pricing contribution was 2.8%, with targeted increases to address input cost inflation in coffee and cocoa-related categories. RIG was 0.8% despite price increases and a challenging macroeconomic environment marked by weakening consumer sentiment. We continued to invest behind our brands and market share trends improved. Foreign exchange had a negative impact of 5.7% as the Swiss franc strengthened significantly during the year.

Targeted growth investments helped drive strong RIG acceleration from 0.2% in H1-25 to 1.4% in H2-25, with improvement in every category and Zone. During the year, market share trends also improved significantly. For the Group, the value gap to the market (i.e. the underperformance of Nestlé sales growth versus market sales growth) reduced by 60%, and the volume gap is now flat. Billionaire brands share growth is turning positive, the best performance for more than a decade.

By category, confectionery and coffee were the largest organic growth contributors, driven by high single-digit pricing. Our focus in these two categories was on smart pricing action to fully address input cost increases where possible, while maintaining medium-term consumer penetration. In coffee, elasticity effects have been limited, and RIG was slightly positive over the year. In confectionery, short-term elasticities were more pronounced, consistent with historical trends. Outside coffee and confectionery, organic growth was positive across most categories, notably with RIG-led growth in PetCare.

By geography, organic growth in developed markets was 2.3%, balanced between RIG of 1.1% and pricing of 1.2%. In emerging markets, organic growth was 5.4%, with pricing of 5.1% and RIG of 0.2%.

By channel, organic growth in retail sales was 3.4% and in out-of-home was 5.4%. E-commerce sales grew organically by 13.5%, reaching 20.5% of total Group sales.

Gross profit and operating profit

Gross profit was CHF 40.8 billion. The gross profit margin decreased by 110 bps to 45.6%, driven by the impact of higher coffee and cocoa prices on cost of goods sold, tariffs and foreign exchange effects, which were only partially compensated by price increases and cost savings.

Distribution expenses as a percentage of sales were 8.2%, slightly down versus the prior year, driven by the successful implementation of savings initiatives. Marketing and administration expenses as a percentage of sales increased by 20 bps to 20.0%. This was driven by an increase in advertising and marketing expenses as a percentage of sales, up 50 bps to 8.6% as we stepped up growth investments; administration and other marketing expenses as a percentage of sales decreased by 30 bps to 11.4%. Research and development costs as a percentage of sales were flat at 1.8%.

Our Fuel for Growth program targeted savings of CHF 0.7 billion in 2025, scaling to CHF 3.0 billion by the end of 2027 following the upsized target announced at 9M-25. In 2025, we delivered savings of CHF 1.1 billion as part of this program, more than CHF 350 million ahead of plan. In addition, we also achieved over CHF 1 billion of savings as part of ongoing efficiencies in 2025, not included under Fuel for Growth.

Underlying trading operating profit (UTOP) was CHF 14.4 billion, a decrease of 8.4%. UTOP margin was 16.1%, a decrease of 110 bps on a reported basis or 100 bps in constant currency. The year-on-year decline in UTOP margin was primarily driven by the impact of input cost inflation on gross profit margin as well as the increase in advertising and marketing expenses and the impact of tariffs, partly offset by pricing and cost savings initiatives.

Restructuring and net other trading items was CHF 1.7 billion compared to CHF 1.1 billion in 2024. The increase was mainly driven by impairments, litigation and the allowance for inventory write-offs due to the infant formula recall. Trading operating profit was CHF 12.7 billion, down 13.4%. Trading operating profit margin was 14.2%, a decrease of 180 bps on a reported basis.

Constant currency

As % of sales 2025 2024 Reported change change

Sales 100.0% 100.0% -

Cost of goods sold -54.4% -53.3% - 110 bps

Gross profit margin 45.6% 46.7% - 110 bps

Other revenue 0.5% 0.4% 10 bps

Distribution expenses - 8.2% - 8.3% 10 bps

Marketing and

administration

expenses - 20.0% - 19.8% - 20 bps

Research and

development costs - 1.8% - 1.8% 0 bps

Underlying trading

operating profit

margin 16.1% 17.2% -110 bps -100 bps

Other trading income 0.2% 0.1% 10 bps

Other trading

expenses -2.1% -1.3% -80 bps

Trading operating

profit margin 14.2% 16.0% -180 bps -170 bps

Other operating

income 0.3% 0.5% -20 bps

Other operating

expenses -0.8% -0.4% -40 bps

Operating profit

margin 13.7% 16.1% -240 bps

Net financial expenses and income tax

Net financial expenses were CHF 1.5 billion in 2025, in line with 2024. The average cost of net debt was 2.6% in both 2025 and 2024.

The Group reported tax rate was 24.6%, compared to 25.0% in the prior year. The decrease was due to lower one-off tax charges compared to 2024. The underlying tax rate was 22.1%, compared to 21.9% in the prior year.

Net profit and earnings per share

Net profit decreased by 17.0% to CHF 9.0 billion. Basic earnings per share decreased by 16.3% to CHF 3.51, driven by lower net profit.

Underlying net profit was CHF 11.4 billion, a decrease of 8.2%, and a decrease of 2.7% in constant currency. Underlying earnings per share was CHF 4.42, a decrease of 7.3%, and a decrease of 1.8% in constant currency.

Cash flow

Cash generated from operations decreased to CHF 16.9 billion from CHF 19.6 billion in 2024. Free cash flow was CHF 9.2 billion, compared to CHF 10.7 billion in the same period last year, with the decrease primarily due to lower Adjusted EBITDA and a negative contribution from working capital movements, partially offset by lower capex. This FCF performance reflects strong delivery in the second half of the year. FCF in H1 was CHF 2.3 billion, negatively impacted by the effect of input cost inflation on working capital as well as the effect of actions to mitigate tariff impacts. In H2, we delivered CHF 6.8 billion of FCF, helped by actions to improve working capital efficiency and strengthen capex discipline.

Dividend

At the Annual General Meeting on April 16, 2026, the Board of Directors will propose a dividend of CHF 3.10 per share, an increase of 5 centime. Nestlé has maintained or increased the dividend in Swiss francs over the last 66 years, and we remain committed to our dividend practice.

Net debt

Net debt was CHF 51.4 billion as at December 31, 2025, compared to CHF 60.0 billion as at June 30, 2025 and CHF 56.0 as at December 31, 2024. The decrease reflected strong free cash flow generation in the second half of the year, along with a CHF 2.0 billion extraordinary distribution from our Froneri joint venture, and a benefit from foreign exchange movements.

Return on invested capital

Return on invested capital was 12.7%, compared to 14.1% in 2024. This reduction reflects lower operating profit and higher impairments, partially compensated by a lower invested capital base.

Acquisitions and divestures, minority interests and joint ventures

In 2025, we increased our ownership in two companies as follow-ons from earlier acquisitions. In China, we acquired all the outstanding minority interests of confectionery company Hsu Fu Chi, and in Nestlé Health Science we further increased our majority stake in Orgain, a leader in plant-based nutrition, where we had an option as part of the original acquisition structure. In South Korea, we took control of our Purina business from the existing JV structure and integrated it into Nestlé South Korea. During Q4 2025, we disposed of our remaining stake in the Herta JV that was established in 2019. This was part of our regular review of smaller non-core assets for opportunities to simplify and unlock value.

Infant formula recall

In January 2026, Nestlé launched a global precautionary recall of batches of infant formula after detecting the presence of cereulide, caused by an ingredient sourced from a global industry supplier. Full details of the recall and timeline are available at www.nestle.com/ask-nestle.

Nestlé maintains high quality standards and safety protocols, which go well beyond Good Manufacturing Practices and current regulations, including for managing cereulide risk in infant formula. The recall removed all batches of products that could potentially contain a level of cereulide >=0.2 ng/g in infant formula powder. This is more stringent than the action limit for recalls of 0.43 ng/g recently defined by the EU and being implemented across the bloc.

Nestlé's recall is completed and we are now focused on replenishing stocks. Production has resumed at all infant formula factories, using alternative ingredient suppliers and with extensive testing before, during and after production. Our top priorities are quality, product safety and compliance, and all our products on the market are safe.

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February 19, 2026 01:00 ET (06:00 GMT)