Nestlé reported improved organic sales growth in the first half of 2026, driven by stronger volume growth and accelerating momentum in emerging markets, although reported profit fell sharply due to restructuring costs and a write-down linked to planned business disposals.
The Swiss food and beverage giant recorded organic growth of 3.6 per cent in the six months to June 30, up from 2.9 per cent a year earlier, with real internal growth (RIG) improving to 1.5 per cent from 0.2 per cent. Second-quarter organic growth reached 3.7 per cent, supported by RIG of 1.8 per cent.
Reported sales fell 2.5 per cent to CHF43.1 billion (£39.56bn), reflecting a 6.2 per cent negative impact from foreign exchange movements. Net profit dropped 31.4 per cent to CHF3.47bn, while underlying trading operating profit declined 2.8 per cent to CHF7.08bn. Free cash flow increased 46.3 per cent to CHF3.38bn.
Chief executive Philipp Navratil said the company's RIG-led growth strategy was delivering steady progress towards its medium-term targets.
“Our RIG-led growth strategy is delivering, with organic growth of 3.7 per cent and RIG of 1.8 per cent in Q2, making steady progress towards our medium-term guidance,” Navratil said. “We are increasing and prioritising our investment behind our leading brands and growth platforms, sharpening our portfolio focus and driving further efficiencies to reinvest.”
Nestlé said growth accelerated in emerging markets, with organic growth of 7.1 per cent excluding China, while China had stabilised after completing a planned reduction in trade inventories. Developed markets delivered organic growth of 2.3 per cent, with robust sell-out in the US and resilient consumer demand in Europe.
Coffee remained the strongest-performing category, delivering organic growth of 7.5 per cent, driven by Nescafé. Food & Snacks grew 3.7 per cent, supported by Maggi, KitKat and Milo, while Petcare rose 2.7 per cent. Nutrition declined 1.2 per cent after an infant formula recall reduced first-half growth, although the company said it expects to regain market share by year-end.
The company continued reshaping its portfolio during the period. Alongside the announcement of a planned 50:50 joint venture with Platinum Equity for its waters and premium beverages business, Nestlé classified its mainstream vitamins, minerals and supplements business and its ice cream operations as assets held for sale. It also completed the acquisition of the remaining stake in meal replacement company yfood and divested Blue Bottle Coffee.
Nestlé said restructuring costs and a CHF1.3bn non-cash write-down related to businesses held for sale weighed on reported earnings during the period. Higher coffee and cocoa costs, the infant formula recall and tariff-related headwinds also affected profitability, although these were partly offset by pricing and cost savings under its Fuel for Growth programme, which has now generated cumulative savings of CHF1.7bn.
Looking ahead, the company maintained its full-year guidance, expecting organic growth of between 3 per cent and 4 per cent, with further acceleration in RIG. It also forecast an improvement in underlying trading operating profit margin compared with 2025 and free cash flow of more than CHF9bn.