Press Release: Nestle: Half-year results 2025: -3-

During the first half of the year, 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.

Operating segment review

Nestlé

Nestlé Waters &

Total Zone Zone Zone Health Premium Other

Group Americas AOA Europe Science Nespresso Beverages businesses

Sales

H1-2025

(CHF m) 44,228 16,954 10,442 8,467 3,225 3,172 1,821 147

Sales

H1-2024

(CHF m) 45,045 17,821 10,591 8,342 3,239 3,096 1,810 146

Real

internal

growth

(RIG) 0.2% - 0.5% - 0.3% - 0.2% 3.3% 2.0% 2.3% 0.7%

Pricing 2.7% 2.7% 2.6% 3.7% 0.1% 3.8% 2.4% 2.5%

Organic

growth 2.9% 2.1% 2.4% 3.5% 3.4% 5.8% 4.7% 3.2%

Net M&A 0.0% - 0.1% - 0.3% 0.2% - 0.1% 0.4% 0.0% 0.0%

Foreign

exchange - 4.7% - 6.9% - 3.6% - 2.2% - 3.7% - 3.7% - 4.0% - 2.3%

Reported

sales

growth - 1.8% - 4.9% - 1.4% 1.5% - 0.4% 2.4% 0.6% 0.8%

UTOP

H1-2025

(CHF m) 7,287 3,429 2,246 1,456 504 695 170 - 8

UTOP

H1-2024

(CHF m) 7,841 3,807 2,366 1,569 433 667 168 - 5

UTOP

margin

H1-2025 16.5% 20.2% 21.5% 17.2% 15.6% 21.9% 9.3% - 5.5%

UTOP

margin

H1-2024 17.4% 21.4% 22.3% 18.8% 13.4% 21.5% 9.3% - 2.9%

UTOP - - 120bps - - + 220bps + 40bps flat - 260bps

margin 90bps 80bps 160bps

YoY

Zone Americas

Zone Americas delivered resilient performance despite a challenging macroeconomic environment and fragile consumer confidence. Growth was broad based across all key markets, and performance was strong in the out-of-home and e-commerce channels. In North America, organic growth and RIG were both positive in Q1 and Q2, with improving market share trends in frozen foods and coffee creamers. In Latin America, growth was pricing-led, with double-digit increases in coffee and confectionery partially offset by negative RIG.

Segment performance summary

-- Organic growth was 2.1%, with -0.5% RIG and 2.7% pricing.

-- Reported sales growth was down 4.9% to CHF 17.0 billion, including a

-6.9% impact from foreign exchange movements.

-- In North America, organic growth was 0.3%, with 0.6% RIG and -0.3%

pricing. In Latin America, organic growth was 5.5%, with -2.7% RIG and

8.3% pricing.

-- By market, growth was led by Brazil, along with Argentina and Venezuela

(both with strong RIG), partially offset by the Central American and

Caribbean regions.

-- Market share gains were achieved in portioned and soluble coffee in North

America and ready-to-drink beverages in Latin America. Market share

developments in frozen food and in coffee creamers continued to improve.

-- UTOP margin decreased by -120 bps to 20.2% driven by input cost inflation,

increased consumer investment, and currency and tariff headwinds that

offset pricing and efficiencies.

Key organic sales growth drivers by product category

-- Beverages (including coffee and coffee creamers) delivered high

single-digit broad-based growth, with strong pricing and positive RIG.

Nescafé was the key driver, reflecting its strong value proposition

especially for more stretched consumers, as well as good commercial

execution.

-- Confectionery grew double digit, led by Tollhouse in the US (double-digit

RIG and pricing) and Garoto in Brazil (double-digit pricing, negative

RIG), and supported by chocobakery expansion.

-- Nestlé Professional grew at mid single-digit rate, with positive

contributions across most segments, particularly in Latin America.

-- In PetCare, growth was positive, with solid performance in cat, offset by

weaker category dynamics impacting sales in mainstream dog brands and

snacks.

-- Frozen food declined at a slower pace, with improved share trends in

Stouffer's and DiGiorno.

-- Infant Nutrition recorded negative growth, with sales declines in Gerber

and Nido.

Zone Asia, Oceania and Africa

In Zone AOA, growth was broad based across markets, with the exception of Greater China. Most regions delivered positive organic growth, with the strongest contributions from Central & West Africa, the Philippines and South Asia. In Greater China, sales declined in Q2, as we began to adjust our business model to focus on driving consumer demand. By category, growth was strongest in confectionery, led by RIG and market share gains while implementing pricing actions. Growth was also strong in strategic focus areas of on-the-go ready-to-drink coffee and PetCare in emerging markets.

Segment performance summary

-- Organic growth was 2.4%, with -0.3% RIG and 2.6% pricing.

-- Reported sales decreased by 1.4% to CHF 10.4 billion, impacted by foreign

exchange movements, which decreased sales by 3.6%.

-- In Greater China, organic growth was -4.2%, with -1.5% RIG and -2.7%

pricing.

-- In Zone AOA, excluding Greater China, organic growth was 4.3%, with 0.1%

RIG and 4.2% pricing.

-- Key market share developments were gains in confectionery, PetCare, and

cocoa malt beverages and losses in coffee, Infant Nutrition, and

culinary.

-- UTOP margin decreased by 80 bps to 21.5%, driven primarily by the impact

on cost of goods sold from inflation in coffee and confectionery.

Key organic sales growth drivers by product category

-- Confectionery grew at a high single-digit rate, driven by double-digit

RIG for KitKat and Milo across all regions.

-- Coffee posted low single-digit growth, led by pricing. The largest growth

contributor was Nescafé.

-- Culinary delivered low single-digit growth, led by solid sales momentum

for Maggi, led by cooking aids and noodles.

-- Nestlé Professional achieved mid single-digit growth, across

geographies and categories led by coffee products and beverage solutions

as well as confectionery.

-- Infant Nutrition and dairy posted low single-digit growth, led by NAN and

Milo across most geographies.

-- PetCare posted negative growth, with strong growth in emerging markets,

more than offset by category softness in developed markets.

Zone Europe

In Zone Europe, growth continued to be pricing-led, reflecting the inflationary environment for coffee and confectionery. Even as pricing increased through the half, RIG turned positive in Q2 after a decline in Q1, supported by an improvement in coffee and positive RIG in PetCare. For the Zone, growth was positive across most categories and markets, with market share gains in PetCare and soluble coffee.

Segment performance summary

-- Organic growth was 3.5%, with -0.2% RIG and 3.7% pricing.

-- Reported sales increased by 1.5% to CHF 8.5 billion, and included a -2.2%

impact from foreign exchange movements.

-- Across the Zone, growth was led by Türkiye, Iberia, Nordics and

France.

-- Market share gains were achieved in PetCare and soluble coffee, with

losses in confectionery and food.

-- UTOP margin decreased by 160 bps to 17.2%, driven by the impact of

inflation on cost of goods sold in coffee and confectionery, and by

higher marketing spend.

Key organic sales growth drivers by product category

-- Coffee posted mid single-digit growth. RIG declined mid single-digit in

Q1, but recovered to flat in Q2, even as pricing accelerated to

double-digits. Organic growth was led by soluble coffee, supported by

very strong growth in RTD coffee.

-- Confectionery posted mid single-digit growth, with KitKat and Dessert the

main growth drivers. Pricing was double-digit while RIG declined mid

single-digit.

-- PetCare delivered low single-digit growth, led by Felix, Purina ProPlan

and Purina ONE. Growth was RIG driven and broad based across markets.

-- Sales in Nestlé Professional grew at a high single-digit rate,

driven by beverage solutions.

-- Infant Nutrition recorded flat growth, reflecting soft category trends,

with NAN contributing positively to growth.

-- Food saw a decline in sales, impacted by a challenging customer and

competitive environment in some markets.

Nestlé Health Science

Organic growth slowed in Nestlé Health Science, following mixed performance across business segments. In VMS, growth was impacted by the discontinuation of some private label business and weaker performance in our mainstream brands, particularly Puritan's Pride. In Active Nutrition, we had strong growth momentum in Orgain. In Medical Nutrition, solid growth was driven by pediatric products.

(MORE TO FOLLOW) Dow Jones Newswires

July 24, 2025 01:00 ET (05:00 GMT)