European Food & HPC: Q2/H1 26 preview: Constructive on Food & HPC

Research evidence excerpt

European Food & HPC: Q2/H1 26 preview: Constructive on Food & HPC

Global Research

20 July 2026ab

European Food & HPC Equities

Europe including UKQ2/H1 26 preview: Constructive on Food & HPC

Consumer, Non-Cyclical

Guillaume Delmas

Robust earnings season ahead supporting companies' 2026 outlook Analyst

We expect a reassuring earnings season for the European Food & HPC sector. On guillaume.delmas@ubs.com

average, for our large caps, we anticipate Q2 Organic Sales Growth (OSG) to amount to +44-20-7568 8568

c. 3.5% while adj operating margin should expand by c. +20bps. As such, most of our Andrei Condrea

covered companies should comfortably reiterate their 2026 outlook - with potential Analyst

slight OSG upgrades from HEN3 and NESN and OSG downgrades for BEI and RKT. andrei.condrea@ubs.com

Several focus areas to emerge from the H1 earnings season should be: (i) still uncertain +44-20-7568 5061

yet more favourable vs. 3 months ago commodity cost outlook; (ii) necessary but

selective pricing actions; (iii) robust momentum in emerging markets; (iv) favourable

weather boosting Q2 growth (especially TMICC and to a lesser extent BN, NESN, BEI and

OR) and potentially Q3. Overall, we see scope for modest earnings upgrades (1-2%) and

some re-rating from currently depressed valuation levels.

Food - NESN and BN Q2 growth to accelerate, MICC upside from heatwaves

In Foods, we expect Nestle and Danone volumes to sequentially improve relative to Q1,

as temporary headwinds ease (e.g. capacity constraints, IMF recall) on top of easy

comparatives in key geographies. The exception here is TMICC, which will lap very

tough comparatives. Nonetheless, margin development will likely be more muted for

H1, as commodity tailwinds only really kick in from Q3. For Nestle, we expect Q2 to be