Nestlé is picking up the pace in terms of growth
Keystone-SDA
Nestlé gained momentum in the third quarter. The food group recorded organic growth of 4%, up from 3.7% in the previous quarter. The Swiss food and beverage giant will also deconsolidate its Russian business from its consolidated financial statements with effect from the end of September.
This is in response to a decision by Russian authorities to take over the company’s Russian operations. This will result in assets of around CHF1.6 billion ($1.95 billion) being removed from the balance sheet.
“As we currently have no control over the management of the business in Russia, the business will be deconsolidated from Nestlé S.A. at the end of September 2026,” the company wrote on Thursday. The impact on the adjusted operating result for 2026 is expected to be limited.
+ Nestlé running its Russian business as normal despite forced administration
Beating growth expectations
Revenue for the manufacturer of Nespresso coffee, KitKat chocolate bars and Purina pet food remained virtually unchanged from the previous year at CHF65.87 billion ($80.24 billion) in the first nine months. Nestlé grew organically by 3.7% during this period, as the group announced on Thursday.
Nestlé saw a significant increase in the volume of products sold. So-called real internal growth (RIG) reached 2.8%, as Nestlé announced on Thursday. In the second quarter, it had stood at 1.8%, following 1.2% in the first quarter. Price increases contributed a further 1.1 percentage points to organic growth in the third quarter.
With these figures, Nestlé significantly exceeded the expectations of analysts surveyed by the AWP news agency. On average, they had expected organic growth of just 3.5% and volume growth of 1.7% for the third quarter.
+ New Nestlé boss plots strategic overhaul to reignite growth
The momentum was driven primarily by a recovery in the pet food business, strong performance in food and snacks such as Maggi seasoning and KitKat, and the water business, which benefited from the hot summer. Volume growth was broadly based: sales volumes increased across all regions of the world and in all globally managed business segments.
Operational recovery
The trend in sales volumes is regarded as a key indicator of the Group’s operational recovery. Following several years of weak growth, driven primarily by price increases, Group CEO Philipp Navratil – who has been in post for just over a year – has made sustainable volume growth his top priority.
To this end, Navratil intends to invest more heavily in successful brands, advertising and innovation. At the same time, the Group aims to become leaner and more effective, focusing on high-growth, high-margin businesses.
As expected, management confirmed its 2026 annual targets. The Group continues to expect organic growth of 3-4% and an improvement in the adjusted operating margin compared with the previous year’s figure of 16.1%.
+ How we produce news in English
Translated from German, reviewed by an English Department journalist.
