Nestlé S.A.

This report does not constitute a rating action. Overview Key strengths Key risks Global leader as a food and beverage company, with a well-diversified portfolio of well-known brands and pricing power to manage inflation. Pressures on volumes after previous price increases as many consumers have traded down or decreased their consumption of food and beverage products. Well-diversified product offering including profitable product categories such as coffee and pet care. Execution risks to reinvigorate volumes, in a bid to achieve the targeted increase in annual organic growth of more than 4% in the medium term. Ample financial means enable large reinvestments in product innovation and marketing, which, in turn, support pricing power. No headroom left under its leverage metric in 2026

...We anticipate that NestlT's top-line performance will remain relatively stable in 2026, while the effect of recent infant formula recalls and continued foreign exchange headwinds could obscure underlying progress from its growth initiatives. NestlT reported Swiss franc (CHF) 89.9 billion in revenue for 2025 (including CHF395 million in other revenues), largely in line with our expectations, representing a 2% decline compared with 2024. This decrease was primarily because of a significant 5.7% negative foreign exchange currency effects. Organic growth reached 3.5%, predominantly owing to price adjustments implemented to offset elevated commodity costs, particularly in the cocoa and coffee segments. Reported real internal growth (RIG) grew 0.8% year on year at the group level, largely thanks to the pet care category, where we see a more competitive pricing environment. The confectionary and powdered and liquid beverages divisions also demonstrated resilient year-over-year RIG performance,...

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