By Alexander Marrow
LONDON, Oct 22 (Reuters) - Nestle reported better-than-expected organic sales growth for the third quarter on Thursday, pushing the Swiss packaged food maker's shares around 1.5% higher as a turnaround led by CEO Philipp Navratil gathered pace.
Navratil, who took over in September 2025, inherited a conglomerate struggling with subdued consumer spending and the impact of US tariffs. He has put real internal growth - or sales volumes - at the heart of a more focused strategy that
includes reducing Nestle's exposure to ice cream, water and vitamin brands.
"I am pleased with our progress," Navratil said. "But I am not satisfied. There is much more for us to do to deliver the potential of the business."
Nestle's shares, up more than 7% so far this year, were at a three-month high on Wednesday.
Nestle maintained its full-year 2026 organic sales outlook for 3% to 4% growth and recorded a 4% uptick in quarterly organic sales, above analyst expectations for a 3.4% rise.
Real internal growth of 2.8% was well beyond expectations of a 1.5% rise, while the price-related increase was 1.1% in the period, below forecasts of 1.9%.
Vontobel analysts in a note said that the volume-driven growth was "reassuring and provides further evidence of delivery on Nestle's growth priorities".
"The recovery is gaining credibility, though consistency remains the real test," they wrote.
RUSSIA EXCLUDED FROM FINANCIAL RESULTS
Nestle also said it had excluded its Russian unit from consolidated financial accounts after Moscow seized the business last month, part of an intensifying crackdown on European firms because of Europe's support for Ukraine.
The Maggi and Nescafe owner played down the overall impact of losing Russian operations.
Nestle CFO Anna Manz said the Russian business, which contributed around 2% of group sales, was no longer being consolidated into financial results from the end of September, with no impact to organic sales, volumes and pricing.
Moscow's seizure, however, affects reported sales, underlying trading operating profit and free cash flow from the fourth quarter, Manz said, noting that derecognising the net assets would negatively impact net debt by approximately 900 million Swiss francs ($1.09 billion) for 2026.
Nestle said in total it was removing from its balance sheet Russian assets worth 1.6 billion francs and recording a non-cash charge of around 1.4 billion francs for cumulative currency translation adjustments.
($1 = 0.8227 Swiss francs)
(Reporting by Alexander Marrow; editing by Dave Graham and Barbara Lewis)
