Nestlé is seeing signs of a turnaround, with its "Fuel for Growth" program ahead of schedule, aiming for CHF 3 billion in savings by the end of 2027. In the first half of 2026, the company achieved CHF 0.6 billion in incremental savings, bringing the total program savings to CHF 1.7 billion, and is on track for an interim target of CHF 2.0 billion in cumulative savings for 2026. This focus on efficiency and portfolio adjustments, including divesting its European water business, is intended to drive consistent growth.
The company reported strong financial results for H1 2026, exceeding analyst expectations. Organic sales, which exclude exchange rate effects and acquisitions, rose 3.7%, surpassing the average analyst estimate of 3.6%. Real internal growth (RIG), representing sales volume, expanded by 1.8%, meeting expectations. Nestlé's 1.9% price increases also came in ahead of the average analyst estimate of 1.8%. RBC analyst James Edwardes Jones noted that while progress is being made, it's still too early to declare it a full success.
A significant part of this strategic shift involves the divestment of a stake in its European water business. On July 23, 2026, Nestlé and Platinum Equity announced plans for Peranel, a 50:50 joint venture for Nestlé's waters and premium beverages. This transaction, expected to close in H1 2027, values the joint venture at approximately EUR 4.9 billion (CHF 4.5 billion), with Nestlé expecting net cash proceeds of about EUR 3.0 billion (CHF 2.8 billion). This move is designed to create a dedicated player to drive growth in the dynamic water and premium beverages category.
Nestlé's CEO, Philipp Navratil, commented that the RIG-led growth strategy is delivering, with accelerating growth in emerging markets and solid performance in developed markets. The company plans to increase investment in its leading brands and growth platforms and drive further efficiencies. For 2026, Nestlé anticipates organic growth between 3% and 4%, with RIG accelerating, and free cash flow expected to be above CHF 9 billion. The underlying trading operating profit (UTOP) margin is also expected to improve compared to 2025, with the second-half margin projected to be broadly similar to the first half, partly due to lower coffee and cocoa costs.
