Nestlé reported stronger-than-expected organic sales growth in the third quarter. This sent shares in the Swiss food producer up by around 1.5%, as the business transformation process led by CEO Philipp Navratil gathers pace, UNN reports, citing Reuters.
Navratil, who took up the post in September 2025, has taken charge of a conglomerate facing subdued consumer spending and the consequences of the introduction of U.S. tariffs. At the heart of his strategy is real internal growth — that is, an increase in sales volumes. The strategy also involves reducing Nestlé’s presence in segments such as ice cream, bottled water and vitamin brands.
"I am pleased with our progress," Navratil said. "But I am not fully satisfied. We still have a lot to do to fully unlock the potential of the business."
Nestlé shares, which have risen by more than 7% since the start of the year, reached a three-month high.
The company reaffirmed its full-year 2026 organic sales forecast, expecting growth of between 3% and 4%. The actual quarterly figure was 4%, exceeding analysts’ forecast of 3.4%.
Real internal growth reached 2.8%, beating expectations of 1.5%, while growth driven by higher prices came to 1.1%, compared with a forecast of 1.9%. This was the first quarter since 2024 in which Nestlé’s organic sales growth was driven primarily by higher volumes rather than price increases.
In a review, Vontobel analysts said that volume-driven growth "inspires confidence and provides further confirmation that Nestlé is successfully implementing its growth priorities."
"The recovery is becoming increasingly convincing, although the true test remains the consistency of the results," they added.
Barclays analyst Warren Ackerman noted in a commentary that ahead of 2027, "pricing remains the main topic of discussion." There are some doubts about profitability levels next year, as consumers are forced to cut spending while production costs rise. Chief Financial Officer Anna Manz sought to dispel concerns that price increases had been lower than expected, noting that prices rose moderately in 2026 compared with the significant increases in 2025.
"We will raise prices as much as possible without harming consumer reach in the medium term," Manz said. "Given the inflationary environment, we are likely to see further price increases in 2027."
In addition
Nestlé also said it had excluded its Russian subsidiary from its consolidated financial statements after Moscow effectively seized the business last month. This was part of mounting pressure on European companies amid Europe’s support for Ukraine.
The owner of the Maggi and Nescafé brands played down the overall impact of the loss of its Russian assets.
According to Manz, the Russian business, which accounted for around 2% of the group’s total sales, has no longer been included in consolidated financial results since the end of September. This does not affect organic sales growth, sales volumes or pricing.
At the same time, Manz said, Moscow’s seizure of the assets affects reported sales, operating profit from the core business and free cash flow starting in the fourth quarter. She added that the write-down of net assets would worsen the net debt figure by approximately 900 million Swiss francs ($1.1 billion) in 2026.
Nestlé said it was removing Russian assets worth 1.6 billion francs from its balance sheet overall, while also recognizing non-cash expenses of around 1.4 billion francs related to accumulated foreign-exchange differences.