Press Release: Nestle: Half-year results 2026: -2-

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Marketing and administration expenses as a percentage of sales decreased by 20 bps to 20.2%. Within this, advertising and marketing expenses as a percentage of sales increased by 30 bps to 8.9%, reflecting a larger increase in gross spend partially offset by some efficiencies. Administration expenses as a percentage of sales included a 30 bps benefit related to changes in a pension scheme.

Research and development costs as a percentage of sales were stable at 1.8%.

Our Fuel for Growth program targets procurement and operational efficiency savings of CHF 3.0 billion by the end of 2027. In the first half of 2026, we delivered CHF 0.6 billion of incremental savings, slightly ahead of our plan. This brings the total program savings to CHF 1.7 billion, and we are on track to deliver our interim target of CHF 2.0 billion cumulative savings in 2026.

Underlying trading operating profit (UTOP) was CHF 7.1 billion, a decrease of 2.8%. The UTOP margin was 16.4%, a year-on-year decrease of 10 bps on a reported basis or flat in constant currency. The decrease was primarily driven by higher coffee and cocoa prices flowing through the P&L, the impact of the infant formula recall, increased advertising and marketing spend, and headwinds from tariffs and foreign exchange, largely offset by actions to drive cost savings, pricing and RIG leverage.

Restructuring and net other trading items was CHF 0.8 billion compared to CHF 0.4 billion in H1-25, mainly due to increased restructuring costs linked to our cost savings program. Trading operating profit decreased by 9.3% to CHF 6.2 billion. The trading operating profit margin was 14.5%, a decrease of 110 bps on a reported basis.

Other operating expenses was negatively impacted by a non-cash write-down of CHF 1.3 billion as we classify the businesses we are divesting as 'assets held for sale'.

Constant currency

As % of sales H1-2026 H1-2025 Reported change change

Sales 100.0% 100.0% -

Cost of goods sold - 53.6% - 53.4% - 20 bps

Gross profit margin 46.4% 46.6% - 20 bps

Other revenue 0.4% 0.4% 0 bps

Distribution expenses - 8.4% - 8.3% - 10 bps

Marketing and

administration

expenses - 20.2% - 20.4% 20 bps

Research and

development costs - 1.8% - 1.8% 0 bps

Underlying trading

operating profit

margin 16.4% 16.5% - 10 bps 0 bps

Other trading income 0.0% 0.2% - 20 bps

Other trading

expenses - 1.9% - 1.1% - 80 bps

Trading operating

profit margin 14.5% 15.6% - 110 bps - 100 bps

Other operating

income 0.6% 0.4% 20 bps

Other operating

expenses - 3.5% - 0.6% - 290 bps

Operating profit

margin 11.6% 15.4% - 380 bps

Net financial expenses and income tax

Net financial expenses decreased to CHF 688 million from CHF 759 million in H1-25, reflecting a lower level of average net debt. The average cost of net debt was 2.5% compared to 2.5% previously.

The Group reported tax rate was 28.7%, compared to 26.4% in the prior year period. The increase was mainly due to limited tax deductibility on the write-down of assets held for sale. The underlying tax rate was 22.3% compared to 22.0% in H1-25.

Net profit and earnings per share

Net profit decreased by 31.4% to CHF 3.5 billion, driven by increased restructuring costs and the write-down of assets held for sale. Basic earnings per share decreased by 31.4% to CHF 1.35, driven by lower net profit.

Underlying net profit was CHF 5.7 billion, a decrease of 2.4% and an increase of 3.4% in constant currency. Underlying earnings per share was CHF 2.22, a decrease of 2.4% and an increase of 3.4% in constant currency.

Cash flow

Cash generated from operations was CHF 6.3 billion compared to CHF 6.2 billion in the same period last year. Free cash flow increased to CHF 3.4 billion compared to CHF 2.3 billion in H1-25, with the increase primarily due to lower capex and lower working capital outflow, partly offset by foreign exchange headwinds.

Net debt

Net debt was CHF 56.3 billion as at June 30, 2026, compared to CHF 51.4 billion as at December 31, 2025 and CHF 60.0 billion as at June 30, 2025. The increase versus December largely reflected cash outflows for the dividend payment of CHF 8.0 billion, partly offset by free cash flow generated.

Acquisitions and divestures

On July 23, 2026, Nestlé and Platinum Equity announced a plan to create Peranel, a 50:50 joint venture for Nestlé's waters and premium beverages business, designed to establish a dedicated player with strengthened focus to drive growth in a dynamic category. The transaction is subject to employee consultation processes and applicable regulatory approvals and is expected to close in H1 2027. It assigns an enterprise value of EUR 4.9 billion (CHF 4.5 billion) to Peranel, implying cash proceeds for Nestlé of approximately EUR 3.0 billion (CHF 2.8 billion) at closing.

In early July, we completed the acquisition of the remaining 51% ownership in yfood Labs GmbH from its founders. Sales for yfood were approximately EUR 150 million in 2025, representing double-digit year-on-year growth. The company is now preparing for its next phase of growth, including the brand's expansion into new markets.

During H1-26, we divested Blue Bottle Coffee to Centurium Capital.

Guidance

For the full year, OG is expected to be in the range of 3% to 4%, with RIG accelerating versus 2025, driven by our focused growth plans. Based on current spot rates, we expect the impact of foreign exchange movements on sales to be approximately -3%.

2026 UTOP margin is expected to improve versus 2025. After a good profit delivery in H1, second half margin is now expected to be broadly similar to the first half. Compared to H1, we expect H2 UTOP margin to benefit from lower coffee and cocoa costs impacting the P&L and further cost savings, offset by some higher transportation and energy costs arising from the Middle East conflict.

Free cash flow is expected to be above CHF 9 billion.

Operating segments

In this section, "growth" refers to organic sales growth, unless otherwise specified.

H1-2026 operating performance

Zone

Asia, Nestlé

Oceania Waters &

Total Zone and Zone Premium Other

Group Americas Africa Europe Nespresso Beverages businesses

Sales

H1-2026

(CHF m) 43,109 18,646 10,366 9,044 3,147 1,781 125

Sales

H1-2025

(CHF m) 44,228 19,220 10,774 9,094 3,172 1,821 147

Real

internal

growth

(RIG) 1.5% 1.0% 2.8% 0.5% 1.7% 1.6% 5.9%

Pricing 2.1% 2.2% 1.5% 2.2% 2.6% 3.5% - 0.5%

Organic

growth 3.6% 3.3% 4.3% 2.7% 4.3% 5.1% 5.4%

Net M&A 0.1% 0.0% - 0.3% 0.9% 0.1% - 0.7% - 13.3%

Foreign

exchange - 6.2% - 6.2% - 7.9% -4.0% - 5.1% - 6.7% - 7.3%

Reported

sales

growth - 2.5% - 3.0% - 3.8% - 0.5% - 0.8% - 2.3% - 15.1%

UTOP

H1-2026

(CHF m) 7,081 3,606 2,219 1,484 651 168 16

UTOP

H1-2025

(CHF m) 7,287 3,771 2,300 1,598 695 170 - 8

UTOP

margin

H1-2026 16.4% 19.3% 21.4% 16.4% 20.7% 9.5% 12.5%

UTOP

margin

H1-2025 16.5% 19.6% 21.4% 17.6% 21.9% 9.3% - 5.5%

UTOP - 10 - 30 bps Flat - 120 - 120 bps 20 bps n.m.

margin bps bps

YoY

Q2-2026 sales performance

Zone

Asia, Nestlé

Oceania Waters &

Total Zone and Zone Premium Other

Group Americas Africa Europe Nespresso Beverages businesses

Sales

Q2-2026

(CHF m) 21,792 9,540 5,150 4,429 1,592 1,023 58

Sales

Q2-2025

(CHF m) 21,627 9,461 5,071 4,432 1,577 1,012 74

Real

internal

growth

(RIG) 1.8% 0.8% 4.8% 0.0% 1.5% 2.2% 10.4%

Pricing 1.9% 1.9% 1.7% 1.5% 2.0% 4.4% - 0.1%

Organic

growth 3.7% 2.8% 6.5% 1.5% 3.4% 6.6% 10.3%

Zone Americas

H1-26 operating performance

-- OG was 3.3%, with RIG of 1.0% and pricing of 2.2%.

-- Reported sales were CHF 18.6 billion, with a negative impact of 6.2% from

foreign exchange movements.

-- UTOP margin decreased by 30 bps to 19.3%, driven by increased consumer

investment and tariff headwinds, largely offset by cost efficiencies.

Q2-26 sales performance

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July 23, 2026 01:00 ET (05:00 GMT)