Food major Nestle SA (NSRGY.PK) reported a 2.2% decline in sales for the nine-month period, impacted negatively by divestitures and a strong Swiss franc, despite a 3.6% organic growth. The company also said it has agreed to increase the 2009 share buyback programme, which would allow it to complete its current buyback programme earlier than initially planned.
Sales for the period dropped 2.2% to CHF 79.5 billion, as divestitures, net of acquisitions, impacted negatively by 0.6% and a 5.2% negative effect was due to the strength of the Swiss franc compared to most other currencies. Real internal growth reached 1.0% having accelerated throughout the year and across most segments of the business.
By region, Americas' sales was CHF 23.4 billion, with a 6.4% organic growth and 2.3% real internal growth. Europe's sales was CHF 16.5 billion, with 0% organic growth and negative 1.5% real internal growth. Zone Asia, Oceania and Africa recorded sales of CHF 11.7 billion, with 5.8% organic growth and 3% real internal growth.
Nestlé Waters reported sales of CHF 7.2 billion, with organic decline of 1.8% and negative 2.3% real internal growth. Nestlé Nutrition's sales was CHF 7.5 billion, with 2.0% organic growth and negative 1.5% real internal growth.
Nestlé's total Food & Beverages' sales was CHF 73.71 billion, with 3.5% organic growth, and real internal growth reached 0.7%.
Other Food and Beverages reported sales of CHF 7.4 billion, with 6.2% organic growth and 2.8% real internal growth. Nestle noted that growth was positive in both the joint ventures, Cereal Partners Worldwide and Beverage Partners Worldwide, and as a newly-created, globally-managed business, Nestlé Professional delivered slightly improved growth momentum, despite weak out-of-home consumption.
Pharma's sales was CHF 5.8 billion, with 5.9% organic growth and 5.5% real internal growth. The company said that Alcon and the joint ventures as a whole achieved good growth.
In addition, Nestle has agreed to increase the 2009 share buyback programme to CHF 7 billion from CHF 4 billion, and this will allow the company to complete its current CHF 25 billion share buyback programme earlier than initially planned. The company also reaffirmed its decision to maintain its current credit quality for the foreseeable future.
Nestle added that the nine-months performance is in line with earlier guidance. Therefore, looking ahead to the full year, the company continues to expect volume-driven organic growth to further accelerate as well as an EBIT margin improvement in constant currencies.
NSRGY.PK closed Wednesday's regular trading at $45.15 per share.
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