Nestlé will spin its waters and premium beverages business into a 50:50 joint venture with Platinum Equity, as the group reported a 31.4 per cent fall in first-half net profit. Its Asia, Oceania and Africa zone, which includes Australia and New Zealand, delivered the strongest growth of its three geographic regions.
The JV, to be called Peranel, includes S.Pellegrino, Sanpellegrino and Maison Perrier. The deal has an enterprise value of EUR 4.9 billion (AU$8 billion), with Nestlé expecting cash proceeds of around CHF 2.8 billion (AU$5 billion) by the end of the first half of 2027.
The waters business is not the only unit heading out the door. Nestlé has classified its mainstream and value vitamins, minerals and supplements brands as held for sale, expecting to lose control of that business by the first half of 2027, and booked a CHF 1.3 billion (AU$2.3 billion) write-down on the disposal group.
During the half it also sold Blue Bottle Coffee to Centurium Capital, completed the acquisition of the remaining 51 per cent of German meal replacement company yfood Labs, and is transferring its remaining ice cream assets to the Froneri JV.
The write-down and a jump in restructuring costs to CHF 469 million (AU$820 million), up from CHF 101 million (AU$176 million) a year earlier, drove net profit down to CHF 3.5 billion (AU$6.1 billion).
The restructuring spend is linked to the Fuel for Growth program, which targets CHF 3 billion (AU$5.25 billion) in procurement and operational efficiency savings by the end of 2027 and has delivered CHF 1.7 billion (AU$3 billion) to date.
Total sales for the half were CHF 43.1 billion (AU$75 billion), with organic growth of 3.6 per cent. Reported sales fell 2.5 per cent on a 6.2 per cent currency headwind. Underlying trading operating profit was CHF 7.1 billion (AU$12 billion) at a margin of 16.4 per cent, down 10 basis points on a reported basis and flat in constant currency, with higher coffee and cocoa prices and the infant formula recall weighing on margins.
The Asia, Oceania and Africa zone posted the strongest volume performance across the group with organic growth of 4.3 per cent for the half, accelerating to 6.5 per cent in the second quarter with real internal growth of 4.8 per cent. Zone margin held flat at 21.4 per cent, the highest of the three zones, with cost savings offset by increased brand investment and the recall impact.
Food and snacks grew double digits in the zone in Q2, led by KitKat, Maggi and Milo, while infant formula brands affected by the Q1 recall showed what the company called a good recovery.
Nestlé chair, Pablo Isla, and CEO, Philipp Navratil, told shareholders the company said it is “sharpening our portfolio focus and driving further efficiencies to reinvest”.
For the full year, Nestlé expects organic growth of 3-4 per cent and an improved underlying trading operating profit margin versus 2025, with free cash flow above CHF 9 billion (AU$12 billion). It flagged higher transport and energy costs in the second half arising from the Middle East conflict.
