Nestlé announced it will remove about 1.6 billion Swiss francs ($1.95 billion) from its balance sheet. This follows the seizure of its Russian operations by the government. The company said it will deconsolidate the Russian business starting at the end of September 2026. Nestlé currently has no control over management in Russia. The company has operated in Russia since 1995 but has cut back its presence since the Ukraine conflict began. The Russian operations account for about 2% of Nestlé's global annual sales and contribute 3-4% to its underlying trading operating profit.
Key Details
In its third-quarter results, Nestlé reported sales of 22.76 billion Swiss francs ($20.71 billion). This reflects an organic growth of 4%, up from 3.7% in the previous quarter. The company noted that price increases added 1.1 percentage points to this growth. Real internal growth reached 2.8%. Analysts had expected lower growth rates, averaging 3.5% for organic growth and 1.7% for volume growth. The strong performance was driven by the pet food sector and popular items like KitKat and Maggi seasoning.
Background
Despite deconsolidating its Russian assets, Nestlé said the impact on its adjusted operating results for 2026 would be limited. The company stressed that it remains the legal owner of the Russian assets. However, these assets will no longer be included in its consolidated financial statements. This decision is part of the company's ongoing adjustments to geopolitical changes affecting its operations.
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Removing Russian assets may lead to a slight change in Nestlé's stock performance. This reflects the company's strategic shift amid international sanctions. Investors will watch how this decision affects Nestlé's overall profitability and market position. The next earnings report is scheduled for early November. This report will provide more insights into the company's performance and outlook.
Based on reporting by: standard.co.uk, swissinfo.ch