Nestle has taken a 1.6 billion Swiss francs (£1.46 billion) hit to its balance sheet after losing control of its operations in Russia, following a presidential decree that placed the business under temporary external administration.
The Swiss food giant, known for brands such as KitKat, Nescafe and Cheerios, said the move would have a limited financial impact on its underlying results for 2026.
Russian business seized
Nestle said the presidential decree had placed its Russian business under temporary external administration last month. The company said it remains the legal owner of the assets but, as it currently does not have control of the management of the operations in Russia, the business is no longer being consolidated by Nestle SA from the end of September 2026.
This indicates Nestle has stopped including the Russian assets within its balance sheet. The Kremlin takeover of Nestle's Russian assets, alongside those of French supermarket chain Auchan, is thought to be the largest of foreign corporate assets since at least 2024.
Sales growth despite price moderation
Nestle has run businesses in Russia since 1995 but has trimmed its operations there since the war with Ukraine started. The business currently makes up about 2% of the group's global annual sales and 3-4% of its underlying trading operating profit.
Despite the hit, Nestle said its sales had grown in the third quarter, even as it increased prices at a slower rate. The company reported sales totalling 22.76 billion Swiss francs (£20.71 billion) for the third quarter of 2026, with sales growth driven by a 1.1% increase in pricing, while it saw real internal growth of 2.8%.
Nestle said price rises had moderated over the year, having put through bigger hikes to its products in previous years. Sales growth was partly led by its coffee products, which include brands Nescafe and Starbucks by Nespresso, after raising prices at the start of the year.
The company also flagged a stronger performance for pet food, including brands Felix and Dentalife, and US frozen food brands like Hot Pockets. Nestle said there was no impact to its third quarter sales, but it had "derecognised" net assets of around 1.6 billion Swiss francs (£1.46 billion) on taking the Russian assets off its balance sheet.
