VEVEY - The numbers Nestlé published on Thursday morning read like the first calm quarter after a stormy patch. Group sales reached CHF 22.76 billion between July and September, up from CHF 21.64 billion a year earlier. Organic growth came in at 4.0 percent, split between 2.8 percent real internal growth and 1.1 percent pricing, and for once the currency effect worked in the company's favour, adding 1.5 percent to reported sales.
Chief executive Philipp Navratil called it execution driving stronger growth, pointing out that real internal growth was positive across all zones and globally managed businesses. Emerging markets grew fastest, while Nespresso added 2.5 percent organically and the waters and premium beverages unit outperformed with 12.3 percent. The full-year guidance stands: organic growth of 3 to 4 percent, an improved underlying trading operating profit margin, and free cash flow above CHF 9 billion.
Russia drops out of the accounts
The more unusual line in Thursday's release concerns Russia. Following a presidential decree published in September, Nestlé's operations there have been placed under temporary external administration. The group remains the legal owner of the assets, but since it no longer controls the management, the business stopped being consolidated at the end of September.
The accounting consequences are contained but real. Russia contributed about CHF 1.5 billion of sales in the first nine months; it has been excluded from organic growth figures since 2022, so the headline growth rates do not change. The deconsolidation derecognises CHF 1.6 billion of net assets, triggers a non-cash charge of CHF 1.4 billion for cumulative currency translation adjustments, and worsens group net debt by roughly CHF 0.9 billion for the year. The situation, the company notes drily, remains fluid.
A narrower, sharper portfolio
The quarter also advanced the portfolio cleanup. In September Nestlé agreed to sell its mainstream vitamins, minerals and supplements business, including Nature's Bounty and Puritan's Pride, to Yellow Wood Partners for USD 1.0 billion, a deal expected to close in the first half of 2027. Combined with the waters partnership announced in July, the strategy is visible: fewer categories, more focus on the food and coffee core where Navratil believes the group holds its strongest advantage.
Investors will weigh Thursday's figures against a food industry under pressure from input costs and cautious consumers, the same squeeze that cost the Lindt chief executive his job this week across the lake in Kilchberg. Nestlé's answer is volume-led growth rather than price-led growth, and for one quarter at least, the volume came back.