Nestlé has reported its full year 2025 performance, and the global food group clearly shows steady organic growth even as profitability faces pressure. Notably, the company is simultaneously intensifying its strategic transformation in order to strengthen future performance and sharpen execution across key businesses.

Revealing this on its website, the company confirmed that organic growth rose to 3.5 percent in 2025, driven by pricing of 2.8 percent and real internal growth of 0.8 percent.

However, reported sales declined by 2 percent to CHF 89.5 billion, largely because foreign exchange movements weighed heavily on the topline. Even so, the company continued to invest behind its brands and, as a result, it recorded improving momentum in the second half of the year.

Chief Executive Officer Philipp Navratil expressed encouragement with the performance, and he stressed that the company’s targeted actions are already producing results despite a difficult external environment.

He explained that real internal growth remained positive across all zones and global businesses and, importantly, improving trends in the latter part of the year clearly demonstrate that the company’s corrective steps are gaining traction.

Nevertheless, profitability came under pressure. Underlying trading operating profit declined by 8.4 percent to CHF 14.4 billion, while the margin eased to 16.1 percent from 17.2 percent recorded a year earlier.

At the same time, net profit dropped 17 percent to CHF 9.0 billion, and basic earnings per share fell to CHF 3.51. Even with these pressures, the company still generated solid cash, posting free cash flow of CHF 9.2 billion and, consequently, proposing a higher dividend of CHF 3.10 per share, thereby extending its long standing record of maintaining or increasing shareholder returns.

Meanwhile, the company is actively accelerating its strategic shift. Specifically, it is tightening focus around four core businesses: Coffee, Petcare, Nutrition, and Food and Snacks.

Again, management emphasised that Coffee and Petcare, supported by brands such as Nescafé and Purina, together with Nutrition, already contribute roughly 70 percent of total sales and will therefore attract prioritized investment and sharper execution.

In addition, the group is integrating Nutrition with Nestlé Health Science into a single, more streamlined business in order to unlock synergies and simplify operations. At the same time, it continues disciplined brand rationalisation within Food and Snacks and is already in advanced negotiations to sell its remaining ice cream operations to Froneri.

Furthermore, Nestlé is expanding its high potential growth platforms so that they now represent about 30 percent of group sales. To reinforce this push, the company plans an additional CHF 0.6 billion investment in 2026.

According to the Management, it has also made it clear that marketing is once again becoming a central growth lever, which explains why advertising and marketing expenses increased to 8.6 percent of sales in 2025.

At the same time, the company is aggressively pursuing efficiency. It has already delivered 20 percent of its targeted CHF 1 billion annual white collar savings ahead of schedule, and it continues to simplify processes while expanding automation.

Importantly, the broader Fuel for Growth programme generated CHF 1.1 billion in savings in 2025, exceeding the year’s target and helping to support margins despite cost headwinds.

Looking forward, the company expects organic growth in 2026 to come in at around 3 to 4 percent, with real internal growth set to accelerate versus 2025.

It also projects that the underlying trading operating profit margin will improve, particularly in the second half, while free cash flow should exceed CHF 9 billion.

Governance adjustments are also underway. With the creation of the integrated Nutrition business, the globally managed structure of Nestlé Health Science will be removed.

Consequently, Anna Mohl will step down from the Executive Board at the end of February 2026 to pursue opportunities outside the group.

Overall, Nestlé maintains that it will continue disciplined capital allocation, regular review of smaller non core assets, and firm execution of its performance culture agenda.

Even so, the company insists that, although near term pressures remain, faster execution of its more focused strategy will ultimately drive sustained improvement through 2026 and beyond.