Nestlé removes Russian unit from accounts

By the Editorial Team · Friday, October 23, 2026

Nestlé has written down 1.6 billion Swiss francs after the Russian government took control of its local operations and removed the business from the company's consolidated financial results. Despite retaining legal ownership, the loss of management control and related financial charges will impact Nestlé’s net debt but is expected to have a limited effect on its core profit, reflecting the broader trend of increased state intervention in foreign firms in Russia.

Nestlé has reported a 1.6 billion Swiss franc ($1.95 billion) reduction in its balance sheet following the Russian government’s takeover of its local operations last month. The Swiss food conglomerate said it would no longer consolidate its Russian business in financial results from the end of September after a presidential decree transferred operational control to an external administrator.

According to Nestlé’s nine-month sales update, the company retains legal ownership of its Russian assets despite losing management control. The removal of approximately 1.6 billion Swiss francs in net assets, coupled with a 1.4 billion Swiss franc non-cash charge related to accumulated currency translation adjustments, will affect its net debt by around 900 million Swiss francs by the end of 2026. Nevertheless, Nestlé indicated the financial impact on its core results would be limited.

Russia represented about 2 percent of Nestlé’s annual sales and accounted for 3 to 4 percent of its underlying operating profit and free cash flow, roughly equal to 1.7 billion Swiss francs annually. The Kremlin’s September decree assigned control of Nestlé’s Russian operations to LEV Management, a Moscow-based entity, as part of a broader move targeting Western companies still operating in Russia. The decree also affected French retailer Auchan and subsidiaries of several other foreign firms. A spokesperson for the Russian government described the takeovers as a response to nations Moscow classifies as "unfriendly."

Nestlé has been active in Russia since the 1990s and was among the Western consumer goods companies that continued operations following Moscow’s 2022 full-scale invasion of Ukraine. The Russian government has increasingly seized foreign-owned businesses, with French dairy company Danone and Danish brewer Carlsberg having their local assets placed under temporary administration and subsequently sold at significant discounts to Russian investors.

Market analysts viewed Nestlé’s removal of its Russian operations from consolidated accounts as a move that brings greater clarity. Vontobel analyst Jean-Philippe Bertschy commented that this step strengthens confidence in Nestlé’s overall recovery prospects despite the geopolitical challenges.

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