Nestle update July 25th, 2026
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Nestle NESN.VX is the worlds biggest food company with revenues of 86 bn CHF covering plenty of fields of food products spread very even over the whole globe. Nestle is a very profitable company with a net profit 9 bn CHF 2025 and a market capitalization of 206bn CHF July 24th 2026.
A motivation to buy Nestle is the stable business and dividend. At the moment it is the hope of a turnaround that keeps the share price at 80 CHF.
This is not a recommendation or proposal to do anything. It is my private personal opinion. I`m not independing as I own a position of Nestle shares and I was working for Nestle many years till more than a decade ago. The information below are best guesses it is not guaranteed.
Chances & Risks
The results from H1/26 are poor. Revenues declined from 44.2 to 43.1 bn CHF. RIG (real internal growth) is 1.5%. Organic growth including price increases 3.6%. The currency effect provide a negative growth.
Nestle achieved an organic growth of 3.5% in 2025. Profits and revenues declined. It looks like Nestlé is not anymore in the best shape and it needs a strong turnaround.
Nestle is compared to similar companies with a profit/share of perhaps 3 CHF equivalent to a PE of 27 (80 CHF) not inexpensive. The dividend yield of 4% in CHF is not bad.
Nestle provided high dividends plus the buyback program above the free cash flow for years. This was not sustainable. Net debt increased. Brands are expensive to build up or to buy (see Starbucks) but for far less to maintain. If brands are not maintained well brands are loosing their value. From the business logic it would be preferable for Nestle to cut the share holder return by half and to invest more in brands and production. I assume that the Nestle management is not strong enough to resist activist shareholders.
Nestle communicates more honest and decisions are driven more by logic than that of other big FMCG companies.
Nestle has an awful lot of products in different markets and is thus complex. The main risk of Nestle is its tendency to beaucracy, complex structures and overhead. Nestle acts slower compared to smaller sized, leaner European companies as Müller Milch, Hipp or Krueger. Nestle gave up plenty of brands and products as these brands were passed by smaller more agile competitors. In developing countries Nestle profits from its superior know how, the transfer of products and brands in these markets.
The big Nestlé R&D centers are successful in optimizing taxes but usually seem to act far away from reality. Successful new products were developed by coincidence only if at all. As a result Nestle has to buy in successful brands as Starbucks coffee to renew the portfoilio. Successful brands are very expensive. Some 24 years ago Nestle implemented an ERP program that pressed the whole company in very rigid unflexible structures.
If you have a look at the different categories it is obvious that Nestle try to sell the water business.
Some activist shareholders are pressing the company to increase profitability increasing margins further selling its Loreal(1) share. This initiative is not really helpful. It may press the management further looking for short term profitability and dividends but does not help in the long run. The poeple keep their food preferences from their youth during lifetime. Thus it makes sense to develop brands for a long term success.
All in all Nestle needs to find structures that allows to improve agility and flexibility and get rid of the big overhead. It is to increase investments in the brands. It is to adapt margins to the markets Nestlé is acting. During the Maucher era in the 90ies Nestle was less centralized. The countries and divisions had plenty of room for decision. The group was directed by an informal Swiss expat network.
Some Data
The share capital of Nestlé is divided into 2576520000 fully paid up registered shares with a nominal value of CHF 0.10 each. 2573M Outstanding shares
Holdings
The Group holds 107 621 021 shares in L’Oréal (whose ultimate parent company is domiciled in France), the world leader in cosmetics, representing a 20.1% participation in its equity after elimination of its treasury shares. As at December 31, 2024, the market value of the shares held amounts to CHF 34.6 billion.
In 2021, divestments in L’Oréal relate to 22.26 million shares sold to L’Oréal for 9276 MCHF and a profit of 7184 M CHF (vs. book value). Cash Flow and profit are effected by this sell out.
The business of Nestle is very well balanced over the whole planet. It covers many food brands. That gives Nestle the highest stability of nearly all companies of the world.
Within the last decades Europe lost its once dominant share in favor to North and South America.
Some references
(8) 2019 October 18 https://www.nestle.com/sites/default/files/2019-10/pr-2019-nine-month-sales-press-release-en.pdf
(6) 2019 April 18 https://www.nestle.com/asset-library/documents/library/events/2018-full-year-results/press-release-de.pdf
(5) 2019 April 09 ttps://www.handelszeitung.ch/unternehmen/nestle-kooperiert-mit-britischer-tierklinik-gruppe?utm_source=Handelszeitung+Newsletter&utm_campaign=95587210e3-LUNCH_TOPICS_2018_12_03_COPY_01&utm_medium=email&utm_term=0_c1505081ea-95587210e3-92780129
(4) 2019 Feb 19 https://www.nestle.com/asset-library/Documents/Library/Presentations/Sales_and_Results/2018-full-year-results-investor-presentation.pdf
(3) 2019 feb. 14 https://www.nestle.com/asset-library/documents/library/presentations/sales_and_results/2018-full-year-results-press-conference-presentation.pdf
(2) https://ch.marketscreener.com/NESTLE-9365334/unternehmen/
(1) https://www.handelszeitung.ch/unternehmen/investoren-geben-paul-bulcke-saures?utm_source=Handelszeitung+Newsletter&utm_campaign=bf141dbd3a-LUNCH_TOPICS_2018_10_31_COPY_01&utm_medium
Nestle investor relations.
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