Revenue and Growth Performance: Nestl¨¦ reported 2.9% organic growth in H1 2025, slightly improving in Q2 compared to Q1. This growth reflects broad-based sales across different categories and regions. However, the growth is under pressure due to pricing strategies and reduced real internal growth (RIG), which was just 0.2% for H1.

Guidance and Margin Outlook: The company has maintained its full-year guidance despite increased headwinds. FMCG (Fast Moving Consumer Goods) pressures suggest that the UTOP margin may significantly decrease in the second half of 2025, although the full-year UTOP margin is expected to remain at or above 16%. While current pricing seems effective, inflationary pressures, tariffs, and foreign exchange challenges could exacerbate margin compression.

Challenges in China: The shift in strategy in Greater China is a significant concern. The market is flat due to declining consumer demand, and the transition from a distribution-driven model to a consumer-demand-driven one is expected to negatively impact sales growth for up to a year. This necessitates adjustments that may further hinder organic sales and RIG levels in the near term.