Nestlé Finance International Ltd.
Annual Financial Report
Management Report and
Financial Statements
January 1 – December 31, 2024
(With Report of the Réviseur d’Entreprises Agréé thereon)
Registered Address:
5, Place de la Gare
L-1616, Luxembourg
Grand Duchy of Luxembourg
RCS. No B136737
Subscribed capital: EUR 440 000
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 20242
3 Management Report
6 Report of the Réviseur d’Entreprises Agréé
13 Financial Statements for the year ended December 31, 2024
14 Balance sheet
15 Income statement
16 Statement of comprehensive income and loss
17 Statement of changes in equity
18 Cash flow statement
19 Notes
19 1. Corporate information
19 2. Accounting policies
25 3. Operating income, expenses and taxes
27 4. Derivative assets and liabilities
28 5. Financial instruments
31 6. Other assets and liabilities
31 7. Share capital, share premium and other reserves
32 8. Capital management
33 9. Debt securities
34 10. Transactions with related parties
36 11. Guarantees
37 12. Risk and uncertainties
41 13. Directors
41 14. Staff
41 15. Events after the balance sheet date
42 Responsibility Statement
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024 3
Nestlé Finance International Ltd. (“NFI” or the “Company”)
presents its annual financial report for the financial year
ended December 31, 2024. NFI is a public limited company
(société anonyme) organized under the laws of Luxembourg
and is a wholly-owned subsidiary of Nestlé S.A. which is the
holding company of the Nestlé Group of companies (the
“Nestlé Group” or the “Group”). NFI is established for an
unlimited duration. The Nestlé Group manufactures and
distributes food and beverage products in the following
categories: powdered and liquid beverages, water, milk, ice
cream and nutrition products, prepared dishes and cooking
aids, confectionery and petcare. The Nestlé Group also
manufactures and distributes nutritional science products
through its globally managed business Nestlé Health
Science.
The principal activity of NFI is the financing of the Nestlé
Group companies by sale, exchange, issue, transfer or in any
other manner, of stock, bonds, debentures, notes, debt
instruments or other securities or any kind of instrument and
contracts thereon or relative thereto. NFI may further assist
the members of the Nestlé Group, in particular by granting
them loans, facilities or guarantees in any form and for any
term whatsoever and provide any of them with advice and
assistance in any form whatsoever.
(A) Review of the development and performance of the
business during the financial year
As at December 31, 2024 a total equivalent of EUR 23 070
million of loans granted to Nestlé Group companies was
outstanding, compared to EUR 19 072 million as at
December 31, 2023. These were financed mainly through the
issuance of bonds, commercial papers and loans received
from Nestlé Group companies. Other assets and liabilities
comprise mainly derivatives, cash and cash equivalents
(consisting of cash balances and deposits at banks) and
short-term investments. The aforementioned transactions
are further detailed in the notes to the financial statements
of NFI for the financial year ended December 31, 2024.
Total assets were EUR 23 756 million and EUR 19 443
million as at December 2024 and 2023, respectively. The
increase results mainly from an increase in loans granted to
Nestlé Group companies (by EUR 3 998 million), from an
increase in cash and cash equivalents (by EUR 260 million),
from an increase in derivative assets (by EUR 66 million).
Total liabilities were EUR 23 682 million and EUR 19 401
million as at December 2024 and 2023, respectively. Debt
securities outstanding at December 31, 2024 (EUR 23 104
million) increased by EUR 4 104 million as compared to
December 31, 2023 (EUR 19 000 million) mainly as a result of
an increase in the issuance of commercial papers and
bonds. Loans received from Nestlé Group companies
outstanding at December 31, 2024 (EUR 395 million)
increased by EUR 132 million as compared to December 31,
2023 (EUR 263 million).
Following a net loss of EUR 18 million in 2023 due to an
unfavorable development of borrowing rates in the debt
market, NFI recognized a net profit of EUR 33 million in
2024. Net profit before tax for the financial year ended
December 31, 2024 was EUR 42 million, compared to a net
loss before tax of EUR 24 million for the financial year ended
December 31, 2023. The change is due to an increase in
intercompany interest income (by EUR 171 million) resulting
from the loans granted to Nestlé S.A. and its affiliates,
partially offset by an increase in third party interest expense
(by EUR 109 million) resulting from an increase in debt
securities issued at higher interest rate. In addition, the profit
before tax was also driven by a decrease in net fee and
commission expense (by EUR 12 million) arising from the
termination of foreign exchange transfer agreement
between NFI and Nestlé S.A. in May 2023.
NFI’s net operating cash outflow (“net cash used in
operating activities”) was to EUR 3 701 for the financial year
ended December 31, 2024 in contrast to a net operating
cash inflow of EUR 175 million for the financial year ended
December 31, 2023. Additionally, NFI’s net financing cash
inflow was EUR 3 953 million for 2024, compared to EUR 157
million in 2023.
In 2023, the rapid and significant growth in interest rates
had a negative impact on the operating result. Future
financial performance will depend largely on the net interest
margin earned on loans and investments, funded by
issuance of bonds, commercial papers, loans received from
Nestlé Group companies and results from derivative
transactions. Considering recent evolutions in the intra-
group financing set-up as well as the increased volatility of
the financial markets, management has decided to refine the
key principles of the transfer pricing policy and made
updates to various components and underlying
assumptions.
Management will continue to closely monitor market
developments and take appropriate measures to mitigate
risks associated with interest rate fluctuations. Management
is confident that NFI is well-positioned to address these
challenges and regain a positive financial situation in the
future.
Management Report
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 20244
(B) Risks and uncertainties
NFI is exposed to certain risks and uncertainties: credit risk,
market risk, liquidity risk and risk of an increase in cost of
capital, treasury operations and other risks that could have a
material adverse impact on its financial condition and
operating results. The detailed description of these risks and
uncertainties and NFI’s objectives, policies and processes
for managing these risks and uncertainties are disclosed in
the notes to the financial statements of NFI for the year
ended December 31, 2024, in particular in Note 12. NFI is
engaged in hedging activities to limit its exposure to risk.
(C) Other items
NFI has no research and development costs nor any treasury
shares or branches.
(D) Corporate governance status
Overall control environment
The Board of Directors of NFI has overall responsibility for its
control environment. The Board of Directors is responsible
for monitoring the internal control and risk management
systems that are related to the financial reporting process on
an ongoing basis.
The internal control and risk management systems are
designed to mitigate, rather than eliminate, the risks identified
in the financial reporting process. In particular, internal controls
related to the financial reporting process are established to
mitigate, detect and correct material misstatements in the
financial statements.
NFI has a number of policies and procedures in key areas
of financial reporting, which are derived from the Nestlé
Group’s Accounting Standards, Risk Management Policy,
Treasury Policy, Information Security Policy and Business
Ethics Policy. These policies and procedures apply to all
subsidiaries of the Nestlé Group, including NFI. NFI complies
with the corporate governance guidelines of the Group.
Structure of capital
The share capital of NFI is divided in 220 000 shares having
a nominal amount of EUR 2 each. There is only one class of
shares issued and they all provide the same rights to the
shareholder. NFI does not have own shares. There are
neither restrictions to the transfer of the issued shares in NFI
nor any agreement issued by the shareholder which may
result in restrictions on the transfer of NFI shares.
Instruments traded on a regulated market
NFI issues bonds which are admitted for trading on the
London Stock Exchange’s regulated market and the
Luxembourg Stock Exchange. No other instruments, such as
NFI’s shares, are admitted to trading on any regulated
market. Therefore, the disclosure requirements included in
Article 10. paragraph 1. points c), d), f), h) and i) of Directive
2004/25/EC of the European Parliament and of the Council
of April 21, 2004 on takeover bids as required by Article
68ter. paragraph 1 letter d) of Luxembourg modified law of
December 19, 2002 are not applicable.
Control activities
Nestlé Group has established minimum requirements for the
conduct and documentation of IT and manual control
activities to mitigate identified significant financial reporting
risks. NFI establishes and implements internal controls
comprising relevant control activities for significant
processes.
NFI’s management is responsible for ensuring that the
internal control activities are performed and documented
and is required to report on their compliance with Nestlé
Group’s internal control policies to Nestlé Group’s finance
function.
In addition, the Nestlé Group has implemented a
formalized financial reporting process for the budget
process and monthly reporting on actual performance. The
accounting information reported by NFI is reviewed both by
Nestlé Group central treasury and by technical accounting
specialists at Nestlé.
Information and communication
The Nestlé Group has established information and
communication systems to ensure that accounting and
internal control compliance procedures are established,
including a finance manual and internal control
requirements.
All Nestlé Group companies, including NFI, use a
standardized financial reporting system.
Monitoring
The monitoring of the internal control and risk management
systems related to financial reporting is performed at various
levels within the Nestlé Group, such as periodic reviews of
control documentation, controller visits, audits performed by
Nestlé Group Internal Audit and monitoring by the Nestlé
Group’s Audit Committee.
Subsequent events
On January 7, 2025, NFI launched and priced a dual-tranche
bond transaction totaling EUR 1.1 billion which comprised of
a EUR 600 million 7-year and a EUR 500 million 20-year
tenor.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024 5
As at March 20, 2025, there are no other subsequent events
which either warrant a modification of the value of its assets
and liabilities or any additional disclosure.
Future developments
It is expected that NFI’s business activities will remain
unchanged in 2025. NFI will primarily continue to provide
financing to members of the Nestlé Group.
Going concern
NFI’s management assessed its ability to continue as a
going concern and is satisfied that it has the resources to
continue in business for the foreseeable future. Furthermore,
management is not aware of any material uncertainties that
may cast significant doubt on NFI’s ability to continue as a
going concern. Therefore, the financial statements continue
to be prepared on the going concern basis.
As at December 31, 2024, the total current assets amount
to EUR 5 052 million and the total current liabilities amount
to EUR 4 972 million. NFI will be able to finance the current
debt with the current assets available and the debt programs
in place. NFI has access to short and medium-term capital
market as well as to Nestlé Group liquidity support in place
for Nestlé S.A. if there ever be an emergency. For the next
year, 71% of the debts have a maturity between 3 years and
more than 5 years (84% in 2023).
Based on the capital management the equity is high
enough to cover the risk of default.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 20246
Independent auditor’s report
To the Shareholder of
Nestlé Finance International Ltd. S.A.
5, Place de la Gare
L-1616 Luxembourg
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Nestlé Finance International Ltd. (the “Company”), which
comprise the statement of financial position as at 31 December 2024, and the statement of
comprehensive income, the statement of changes in equity and the statement of cash flows for the year
then ended, and the notes to the financial statements, including material accounting policy information.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of
the Company as at 31 December 2024, and of its financial performance and cash flows for the year then
ended in accordance with IFRS Accounting Standards as adopted by the European Union.
Basis for opinion
We conducted our audit in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 on the
audit profession (“Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted
for Luxembourg by the “Commission de Surveillance du Secteur Financier” (“CSSF”). Our
responsibilities under the EU Regulation Nº 537/2014, the Law of 23 July 2016 and ISAs as adopted for
Luxembourg by the CSSF are further described in the “Responsibilities of the “réviseur d’entreprises
agréé” for the audit of the financial statements” section of our report. We are also independent of the
Company in accordance with the International Code of Ethics for Professional Accountants, including
International Independence Standards, issued by the International Ethics Standards Board for
Accountants (“IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethical
requirements that are relevant to our audit of the financial statements, and have fulfilled our other ethical
responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of the audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Ernst & Young
Société anonyme
35E, Avenue John F. Kennedy
L-1855 Luxembourg
Tel: +352 42 124 1
www.ey.com/luxembourg
B.P. 780
L-2017 Luxembourg
R.C.S. Luxembourg B 47 771
TVA LU 16063074
7Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
Credit risk related to loans and advances to Nestlé Group entities
Risk identified
NFI is a financing entity granting loans and advances to entities within the Nestlé Group referred to
as Nestlé Group entities.
As of 31 December 2024, the current portion of loans and advances granted to Nestlé entities
amounted to EUR 4 385 350 whilst the non-current portion amounted to EUR 18 684 368 both
totalling EUR 23 069 718 and representing 98.1% of the total assets of the company.
As detailed in Note 2 and Note 5 to the financial statements, loans to Nestlé Group entities are
classified as debt instruments measured at amortized cost and subject to impairment.
An expected credit loss (“ECL”) analysis was performed by the Management as at 31 December
2024 based on key judgements and estimates including:
- Completeness and accuracy of data used to calculate ECL.
- Allocation of assets to stage 1 (performing), 2 (non-performing), or 3 (default) using criteria in
accordance with the accounting standard.
- Accuracy and adequacy of the financial statement disclosures.
Given the significance of loans granted to Nestlé entities as well as the importance of the
judgments involved regarding the assessment of the impairment of these financial assets, the
evaluation of the recoverability of loans receivables granted to Nestlé Companies is a key audit
matter.
Our answer
Our audit procedures on impairment and the evaluation of the recoverability of loans receivables
and advances granted to Nestlé Group entities (the “Loans”) included, among others:
- We inspected legal documentation related to the Loans.
- We agreed the input data used in the ECL computation to the carrying value of the Loans
reported in the financial statements and to the related parties’ financial information obtained
from Nestlé Group companies.
- We assessed the methods and assumptions applied by Management in their ECL analysis.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 20248
- We performed an overall assessment of the ECL provision to evaluate its reasonableness
considering the Company’s portfolio, risk profile, credit risk management policies and the
macroeconomic environment.
- We evaluated the adequacy of the Company’s disclosures in respect of the Loans as disclosed
in Notes 5 and 12 of the financial statements.
Other information
The Board of Directors is responsible for the other information. The other information comprises
the information included in the management report and the corporate governance statement but
does not include the financial statements and our report of “réviseur d’entreprises agréé” thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report this fact. We have nothing to report
in this regard.
Responsibilities of the Board of Directors and of those charged with governance for the
financial statements
The Board of Directors is responsible for the preparation and fair presentation of the financial
statements in accordance with IFRS as adopted by the European Union, and for such internal
control as the Board of Directors determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
The Board of Directors is also responsible for presenting the financial statements in compliance
with the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic
Format, as amended (“ESEF Regulation”).
In preparing the financial statements, the Board of Directors is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the Board of Directors
either intends to liquidate the Company or to cease operations, or has no realistic alternative but to
do so.
9Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
Responsibilities of the “réviseur d’entreprises agréé” for the audit of the financial
statements
The objectives of our audit are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue a report of the “réviseur d’entreprises agréé” that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 and with the ISAs as
adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.
As part of an audit in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 and
with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Board of Directors.
• Conclude on the appropriateness of Board of Directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our report of the “réviseur d’entreprises agréé” to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our report of the
“réviseur d’entreprises agréé”. However, future events or conditions may cause the Company to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202410
• Assess whether the financial statements have been prepared, in all material respects, in
compliance with the requirements laid down in the ESEF Regulation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate to them all relationships
and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our report unless law or regulation
precludes public disclosure about the matter.
Report on other legal and regulatory requirements
We have been appointed as “réviseur d’entreprises agréé” by the General Meeting of the
Shareholders on 24th April 2024 and the duration of our uninterrupted engagement, including
previous renewals and reappointments, is 5 years.
The management report is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements.
The corporate governance statement, included in the management report, is the responsibility of
the Board of Directors. The information required by article 68ter paragraph (1) letters c) and d) of
the law of 19 December 2002 on the commercial and companies register and on the accounting
records and annual accounts of undertakings, as amended, is consistent with the financial
statements and has been prepared in accordance with applicable legal requirements.
We have checked the compliance of the financial statements of the Company as at 31 December
2024 with relevant statutory requirements set out in the ESEF Regulation that are applicable to the
financial statements. For the Company, it relates to:
• Financial statements prepared in valid xHTML format;
In our opinion, the financial statements of the Company as at 31 December 2024, identified as
“nestle-finance-international-ltd-fullyear-financial-report-2024.xHTML”, have been prepared, in all
material respects, in compliance with the requirements laid down in the ESEF Regulation.
11Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
We confirm that the audit opinion is consistent with the additional report to the audit committee or
equivalent.
We confirm that the prohibited non-audit services referred to in EU Regulation No 537/2014 were
not provided and that we remained independent of the Company in conducting the audit.
Ernst & Young
Société anonyme
Cabinet de révision agréé
Luxembourg, 20th March 2025
13Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
Financial Statements 2024
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202414
Balance sheet
as at December 31, 2024
In thousands of Euro
Notes 2024 2023
Assets
Current assets
Cash and cash equivalents 5 595 405 335 461
Derivative assets 4/5 70 156 4 077
Loans to Nestlé Group companies 5 4 385 350 2 448 422
Other assets 5/6 1 402 1 378
Total current assets 5 052 313 2 789 338
Non-current assets
Loans to Nestlé Group companies 5 18 684 368 16 623 668
Deferred tax assets 6 19 269 29 845
Total non-current assets 18 703 637 16 653 513
Total assets 23 755 950 19 442 851
Liabilities
Current liabilities
Derivative liabilities 4/5 20 18 518
Loans from Nestlé Group companies 5 395 179 262 690
Current financial debt 5/9 4 394 626 2 451 080
Other liabilities 5/6 182 384 120 236
Total current liabilities 4 972 209 2 852 524
Non-current liabilities
Non-current financial debt 5/9 18 709 473 16 548 628
Total non-current liabilities 18 709 473 16 548 628
Total liabilities 23 681 682 19 401 152
Equity
Share capital 7 440 440
Share premium and other premiums 7 102 000 102 000
Hedging reserve 7 350 281
Legal reserve 7 44 44
Other reserve 7 4 955 4 955
Accumulated losses (33 521) (66 021)
Total equity attributable to shareholders of the company 74 268 41 699
Total liabilities and equity 23 755 950 19 442 851
The accompanying notes form an integral part of the financial statements.
15Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
Income statement
for the year ended December 31, 2024
In thousands of Euro
Notes 2024 2023
Interest income 518 412 347 705
Interest expense (466 311) (356 830)
Net interest income/(expense) 3 52 101 (9 125)
Net fee and commission income/(expense) from Nestlé Group companies (7 001) (19 446)
Expected credit loss on financial assets (increase)/decrease (1 012) 180
Other operating income/(expense) 3 (35) 7 118
Operating profit/(loss) 44 053 (21 273)
Administration expense (1 731) (2 501)
Profit/(loss) before tax 42 322 (23 774)
Taxes 3 (9 822) 5 743
Profit/(loss) for the year attributable to shareholders of the company 32 500 (18 031)
The accompanying notes form an integral part of the financial statements.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202416
Statement of comprehensive income and loss
for the year ended December 31, 2024
In thousands of Euro
2024 2023
Profit/(loss) for the year recognized in the income statement 32 500 (18 031)
Adjustments on cost of hedge reserve
Recognized in hedging reserve 92 444
Taxes on hedging reserve (23) (94)
Items that are or may be reclassified subsequently to the income statement 69 350
Other comprehensive income for the year 69 350
Comprehensive income for the year attributable to shareholders of the company 32 569 (17 681)
The accompanying notes form an integral part of the financial statements.
17Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
Statement of changes in equity
for the year ended December 31, 2024
In thousands of Euro
Notes
Share capital
Share premium and
other premiums
Hedging reserve
Legal reserve
Other reserve
Accumulated losses
Total equity attribut-
able to shareholders
of the company
Equity as at January 1, 2023 440 102 000 (69) 44 4 955 (47 990) 59 380
Loss for the year — — — — — (18 031) (18 031)
Other comprehensive income for the year — — 350 — — — 350
Total comprehensive income/(loss) for the year — — 350 — — (18 031) (17 681)
Equity as at December 31, 2023 440 102 000 281 44 4 955 (66 021) 41 699
Equity as at January 1, 2024 440 102 000 281 44 4 955 (66 021) 41 699
Profit for the year — — — — — 32 500 32 500
Other comprehensive income for the year — — 69 — — — 69
Total comprehensive income/(loss) for the year — — 69 — — 32 500 32 569
Equity as at December 31, 2024 440 102 000 350 44 4 955 (33 521) 74 268
The accompanying notes form an integral part of the financial statements.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202418
Cash flow statement
for the year ended December 31, 2024
In thousands of Euro
Notes 2024 2023
Operating activities
Profit/(loss) before tax 42 322 (23 774)
Adjustments for non-cash transactions:
Foreign exchange loss for loans, debt securities and derivatives 3 35 58 301
Fair value of debt securities — 15 384
Interest income 3 (518 412) (346 796)
Interest expense 3 466 311 356 830
Cash flow before changes in operating assets and liabilities (9 744) 59 945
Change in other assets 6 (24) (626)
Change in other liabilities excluding accruals and deferred income 6 (274) (203 234)
Inflow in short term investments 92 —
Cash flow used in operations (9 950) (143 914)
Net loans to Nestlé Group companies excluding intra group interest receivable 10 (3 916 711) (137 111)
Net loans from Nestlé Group companies excluding intra group interest payable 10 132 489 262 690
Interest received net of withholding tax 463 438 316 128
Interest paid (371 674) (122 871)
Income tax received/(paid) 616 (37)
Operating cash flow (3 701 793) 174 885
Financing activities
Change in derivative assets including those recognized directly in equity — (2 862)
Change in derivative liabilities 5 — (64 642)
Bonds issued 9 2 625 995 3 143 213
Commercial paper issued 9 37 679 904 47 376 921
Bonds repaid 9 (1 150 000) (963 727)
Commercial paper repaid 9 (35 203 363) (49 332 068)
Financing cash flow 3 952 536 156 835
Effect of the exchange rate changes on cash 9 200 1 336
Net increase in cash and cash equivalents 259 944 333 055
Net cash and cash equivalents at the beginning of the year 335 461 2 406
Net cash and cash equivalents at the end of the year 595 405 335 461
Net cash and cash equivalents as per balance sheet 5 595 405 335 461
The accompanying notes form an integral part of the financial statements.
19Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
1. Corporate information
Nestlé Finance International Ltd. (“NFI” or the “Company”) organized under the laws of
Luxembourg, is a wholly-owned subsidiary of Nestlé S.A., incorporated in Switzerland,
which is the holding company of the Nestlé Group of companies (hereinafter, referred to
as the “Nestlé Group” or the “Group”). NFI is established for an unlimited duration.
NFI is principally engaged in the financing of the Nestlé Group companies by sale,
exchange, issue, transfer or in any other manner, of stock, bonds, debentures, notes, debt
instruments or other securities or any kind of instrument and contracts thereon or relative
thereto. NFI may further assist the members of the Nestlé Group, in particular, by granting
them loans, facilities or guarantees in any form and for any term whatsoever and provide
any of them with advice and assistance in any form whatsoever.
The financial statements of NFI for the year ended December 31, 2024 were authorized
for issue in accordance with a resolution of the directors on March 20, 2025 and are
subject to approval by the Annual General Meeting on April 15, 2025.
2. Accounting policies
Accounting convention and accounting standards
The financial statements comply with IFRS Accounting Standards issued by the
International Accounting Standards Board (IASB) as adopted by the European Union and
with the laws and regulations in force in the Grand Duchy of Luxembourg.
They have been prepared on a historical cost basis, except for derivatives financial
instruments and short-term investments that are recorded at fair value.
NFI’s financial year starts on the first day of January and ends on the last day in
December. The balance sheet has been prepared in order of liquidity.
NFI prepared its financial statements on the basis of the going concern convention. NFI
has access to ample liquidity, including short and medium-term capital markets, enjoying
the benefit of issuance with Nestlé S.A.’s AA- rated guarantee. NFI can access the Nestlé
Group liquidity support in place for Nestlé S.A. if there ever be an emergency. Refer to
Note 11 for further details.
Key accounting judgments, estimates and assumptions
The preparation of the financial statements requires NFI’s management to exercise
judgment and to make estimates and assumptions that affect the application of policies,
reported amounts of revenues, expenses, assets and liabilities and disclosures. These
estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances.
The estimates and underlying assumptions are reviewed on an ongoing basis. Actual
result may differ from these estimates. Revisions to accounting estimates are recognized
in the period in which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both current and future
periods.
Those areas that involved a higher degree of judgment or uncertainty are explained
further in the relevant notes, primarily regarding the determination of fair value of financial
instruments (Note 2 on fair value, Note 4 on Derivative assets and liabilities, Note 5 on
Notes
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202420
2. Accounting policies
Financial instruments and Note 9 on Debt securities), and the determination of the
expected credit losses (ECL) on loans granted to Nestlé S.A. and its affiliates.
The measurement of impairment losses under IFRS 9 across all categories of financial
assets in scope requires judgements and estimates. These estimates are driven by a
number of factors and changes which can result in different levels of allowance. However,
NFI’s expected credit losses calculation is derived from different output models with
several underlying assumptions regarding the choice of variable inputs and
interdependencies. Elements of the ECL model are considered accounting judgements.
Refer to Note 2 paragraph impairment for further details.
Foreign currencies
The functional currency of NFI is Euro, which is the currency of its primary economic
environment as well as the presentation currency.
Transactions in foreign currencies are recorded at the rate of exchange at the date of the
transaction. Monetary assets and liabilities in foreign currencies are translated at year end
rates. Any resulting exchange differences are taken to the income statement, except when
deferred in other comprehensive income as qualifying cash flow hedges.
Segmental information
The financing activities of NFI are managed as one single business. Therefore, there is one
reporting segment in the financial statements.
The economic purpose of NFI is to issue debt securities, primarily bonds and
commercial papers, to provide financing to Nestlé S.A. and its affiliates. Therefore, NFI’s
income is mainly generated from loans granted to Nestlé Group companies. Loans are
primarily granted to central companies; NFI does not grant loans to operational companies
in order to limit foreign exchange risk. Refer to Note 3 for further details.
Valuation methods, presentations and definitions
Operating income
Net interest income includes the income earned on loans to Nestlé Group companies,
income from short-term deposits and financial expense on borrowings from third parties
and Nestlé Group companies. Net interest income also includes other financial income
and expense from interest rate hedging instruments that are recognized in the income
statement.
Interest income or expense is recognized using the effective interest rate method. The
‘effective interest rate’ is the rate that exactly discounts estimated future cash payments
or receipts through the expected life of the financial instrument to the gross carrying
amount of the financial asset or the amortized cost of the financial liability.
Net fee and commission expenses are composed of the guarantee fee that is payable
to Nestlé S.A. and other fees and expenses from Nestlé Group companies.
Other operating income includes results on foreign currency, other income or expenses
from Nestlé Group companies and income or expenses on financial instruments carried at
fair value to income statement (abbreviated as FVTPL, fair value through profit or loss).
21Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
2. Accounting policies
Taxes
NFI is subject to Luxembourg tax laws and regulations. Taxes include current taxes and
deferred taxes on profit as well as actual or potential withholding taxes on current and
expected transfers of income from Nestlé Group companies and tax adjustments relating
to prior financial years. Income tax is recognized in the income statement, except to the
extent that it relates to items directly taken to equity or other comprehensive income, in
which case it is recognized against equity or other comprehensive income. The amount of
current tax payable or receivable is the best estimate of the tax amount expected to be
paid or received that reflects uncertainty related to income taxes, if any.
Deferred taxes are based on temporary differences that arise when taxation authorities
recognize and measure assets and liabilities with rules that differ from those of the
financial statements. They also arise on temporary differences stemming from tax losses
carried forward.
Deferred taxes are calculated under the liability method at the rates of tax expected to
prevail when the temporary differences reverse, subject to such rates being substantially
enacted at the balance sheet date. Any changes in the tax rate are recognized in the
income statement unless related to items directly recognized against equity or other
comprehensive income. Deferred tax liabilities are recognized on all taxable temporary
differences. Deferred tax assets are recognized on all deductible temporary differences
provided that it is probable that future taxable income will be available.
Financial instruments
Financial assets
Financial assets are initially recognized at fair value plus directly attributable transaction
costs. However, when a financial asset measured at FVTPL is recognized, the transaction
costs are expensed immediately. Subsequent remeasurement of financial assets is
determined by their category, which is revisited at each reporting date.
The settlement date is used for initial recognition and derecognition of the financial
assets as these transactions are generally under contracts whose terms require delivery
within the time frame established by the regulation or convention in the market place
(regular-way purchase or sale).
Financial assets are derecognized (in full or in part) when substantially all NFI’s rights to
cash flow from the respective assets have expired or have been transferred and NFI has
transferred substantially all the risks and rewards of ownership.
NFI classifies its financial assets into the following categories: at amortized cost and at
FVTPL.
Financial assets at amortized cost
This category includes the following classes of financial assets: loans to Nestlé Group
companies, trade and other receivables, cash and cash equivalents.
Loans to parent and affiliates provide solely the payment of interest and principal and
are held with the sole objective to collect the contractual cash flow up to maturity. Cash
and cash equivalents include cash at bank and other short-term highly liquid investments
with maturities of three months or less from the acquisition date.
Subsequent to initial measurement, these assets are carried at amortized cost using
the effective interest rate method and are subject to impairment.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202422
2. Accounting policies
Financial instruments at fair value through profit and loss
Derivative instruments are classified as financial instruments at FVTPL. Derivatives are
initially recognized at fair value at the trade date. They are subsequently remeasured at fair
value on a regular basis and at each reporting date as a minimum. NFI applies hedge
accounting to hedging relationships that meet the qualifying criteria.
NFI’s derivatives mainly consist of currency forwards and interest rate swaps. Derivatives
are mainly used to manage exposures to foreign exchange and interest rates.
Short-term investments which consist of investments in money market fund are
classified at FVTPL. These investments are mainly related to liquidity management. The
net gain or loss is recorded in interest income or expense.
Financial liabilities at amortized cost
Financial liabilities are initially recognized at fair value, net of transaction costs incurred.
Subsequent to initial measurement, financial liabilities are measured at amortized cost.
The difference between the initial carrying amount of the financial liabilities and their
redemption value is recognized in the income statement over the contractual terms using
the effective interest rate method. This category includes the following classes of financial
liabilities: loans and advances from Nestlé Group companies, trade and other payables,
commercial papers, bonds and other non-derivative financial liabilities.
Financial liabilities at amortized cost are classified as current or non-current, depending
on whether they are due within 12 months after the balance sheet date or beyond.
Financial liabilities are derecognized (in full or partly) when either NFI is discharged
from its obligation, they expire, they are cancelled, or they are replaced by a new liability
with substantially modified terms.
Hedge accounting
NFI designates and documents the use of certain derivatives as hedging instruments
against changes in fair values of recognized assets and liabilities (fair value hedges). The
effectiveness of such hedges is assessed at inception and verified at regular intervals and
at least on a quarterly basis to ensure that an economic relationship exists between the
hedged item and the hedging instrument.
NFI generally excludes from the designation of the hedging relationship the hedging
cost element. Subsequently, this cost element impacts the income statement at the same
time as the underlying hedged item.
Fair value hedges
NFI uses fair value hedges to mitigate foreign currency and interest rate risks of its
recognized assets and liabilities, being financial debt.
Changes in fair values of hedging instruments designated as fair value hedges and the
adjustments for the risks being hedged in the carrying amounts of the underlying
transactions are recognized in the income statement.
Impairment
NFI assesses whether its financial assets carried at amortized cost are impaired based on
the expected credit loss (ECL). The measurement of the expected credit loss of a financial
instrument should reflect an unbiased and probability-weighted amount that is
determined by evaluating a range of possible outcomes, the time value of money and
reasonable and supportable information that is available without undue cost or effort at
23Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
2. Accounting policies
the reporting date about past events, current conditions and forecasts of future economic
conditions.
Loans are granted by NFI solely to Nestlé S.A. and its affiliates. Loss given default
(“LGD”) has been assumed to be 30% (2023: 30%), in line with the industry standard for
Global Corporates. Impairment losses related to loans to Nestlé Group companies are
presented separately in the income statement.
The default occurs when a borrower fails to pay back a debt according to the initial
arrangement.
NFI groups its loans into stage 1, stage 2 and stage 3 as defined below:
Stage 1: Credit risk has not increased significantly since initial recognition. This stage is
used for the normal calculation of the ECL with the methodology in place.
Stage 2: Credit risk has increased significantly since initial recognition. Based on the
financial figures of the Group reporting unit, NFI will be informed by Nestlé Group
that a risk is higher to perform a calculation based on the risk of default at the
maturity date.
Stage 3: Financial asset is impaired. NFI will be informed by Nestlé Group that a borrower
is in bankruptcy to recognize an impairment.
Fair value hierarchy of financial instruments
NFI classifies the fair value of its financial instruments in the following hierarchy, based on
the inputs used in their valuation:
i) Level 1 - the fair value of financial instruments quoted in active markets is based on
their quoted closing price at the balance sheet date.
ii) Level 2 - the fair value of financial instruments that are not traded in an active market is
determined by using valuation techniques using observable market data. Such
valuation techniques include discounted cash flow, standard valuation models based
on market parameters for interest rates, yield curves or foreign exchange rates, dealer
quotes for similar instruments and comparable arm’s length transactions. For example,
the fair value of forward exchange contracts, currency swaps, and interest rate swaps
are determined by discounting estimated future cash flow.
iii) Level 3 - the fair value of financial instruments that are measured on the basis of entity
specific valuations using inputs that are not based on observable market data
(unobservable inputs). When the fair value of unquoted instruments cannot be
measured with sufficient reliability, NFI carries such instruments at cost less
impairment, if applicable.
Accruals and deferred income
Accruals and deferred income comprise expenses relating to the current financial year,
which will not be paid until after the balance sheet date and income received in advance,
relating to the following financial year.
Dividend payments
In accordance with Luxembourg law and NFI’s articles of incorporation, dividend
payments are treated as an appropriation of profit in the financial year in which they are
ratified at the Annual General Meeting and subsequently paid.
At the meeting of the Board of Directors of NFI held on March 22, 2024, the Board did
not propose any dividend payment to NFI’s shareholder.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202424
2. Accounting policies
Events occurring after the balance sheet date
The values of assets and liabilities at the balance sheet date are adjusted if there is
evidence that subsequent adjusting events warrant a modification of these values. These
adjustments are made up to the date of approval of these financial statements by NFI’s
Board of Directors. Other non-adjusting events are disclosed in the Notes to the financial
statements of NFI for the year ended December 31, 2024.
Nestlé S.A. consolidation
NFI is included in the consolidated financial statements of Nestlé S.A. being the company
that is both the smallest and the largest body of undertakings that NFI forms part of.
Copies of Nestlé S.A.’s consolidated financial statements are available at the registered
office of Nestlé S.A., Avenue Nestlé 55, 1800 Vevey, Switzerland.
Changes in accounting standards
Amendments to IFRS Accounting Standards which apply for the first time in 2024 include
Classification of Liabilities as Current or Non-current and Non-current Liabilities with
Covenants – Amendments to IAS 1. This amendment, and other amendments effective for
the first time in 2024, had no material impact on the financial statements.
Changes in accounting standards that may affect NFI after December 31, 2024
In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial
Statements. This standard sets out requirements for the presentation and disclosure of
information in financial statements. IFRS 18 is effective for reporting periods beginning on
or after January 1, 2027 and will apply retrospectively. NFI is currently evaluating the
impacts this new standard will have on the presentation of the income statement and the
notes to the financial statements. It is too early to assess whether this standard will have a
material impact on the financial statements.
Amendments to the Classification and Measurement of Financial Instruments -
Amendments to IFRS 9 and IFRS 7 - have been issued and will become effective on
January 1, 2026. NFI is currently evaluating the effects of these new amendments; they
are not expected to have a material impact on the financial statements in the period of
initial adoption.
25Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
3. Operating income, expenses and taxes
Net interest income/(expenses)
In thousands of Euro
2024 2023
Interest income from
Cash and cash equivalents, short-term investments 21 280 2 679
Loans to Nestlé Group companies 497 132 345 026
Interest income 518 412 347 705
Interest expense from
Loans from Nestlé Group companies (8 913) (17 671)
Debt securities issued (457 398) (339 159)
Interest expense (466 311) (356 830)
Net interest income/(expense) 52 101 (9 125)
Other operating income/(expenses)
In thousands of Euro
2024 2023
Net foreign exchange gain/(loss) (63 459) (58 301)
Net gain/(loss) in fair value to income statement — (15 384)
Net gain/(loss) on hedging instruments 63 424 80 376
Others — 427
Other operating income/(expenses) (35) 7 118
The variation of the net foreign exchange gain is mainly due to the fluctuation of the
currencies USD, GBP and JPY against EUR, refer to Note 12 for further details.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202426
3. Operating income, expense and taxes
Taxes
In thousands of Euro
2024 2023
Profit/(loss) for the year 32 500 (18 031)
Tax income/(expense) (9 822) 5 743
Profit/(loss) before tax 42 322 (23 774)
Withholding tax on interest received 794 (4)
Profit/(loss) before income tax and after withholding tax 43 116 (23 778)
Tax income/(expense)
Tax using NFI's domestic tax rate 24,94% (2023: 24,94%) (10 576) 5 835
Net wealth tax (63) (182)
Withholding tax on interest received 794 (4)
Taxes reclassified to other comprehensive income 23 94
Total tax income/(expense) (9 822) 5 743
Fees charged by Ernst & Young S.A. (“EY”) and other member firms of the EY network
during the year ended December 31, 2024 were as follows:
In thousands of Euro
2024 2023
Legal annual audit fees (49) (83)
Fees charged by EY network (49) (83)
27Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
4. Derivative assets and liabilities
By type
In thousands of Euro
2024 2023 2024 2023 2024 2023
Contractual or notional
amounts Fair value assets Fair value liabilties
Fair value hedges on debt securities issued
Currency forwards and swaps 2 119 382 971 126 70 156 4 077 20 18 518
Total 2 119 382 971 126 70 156 4 077 20 18 518
Conditional offsets *
Derivative assets and liabilities (20) (4 077) (20) (4 077)
Balances after conditional offsets 70 136 — — 14 441
* Represent amounts that would be offset in case of default, insolvency or bankruptcy of the counterparties
The majority of hedge relationships are established to ensure a hedge ratio of 1:1.
Impact on the income statement of fair value hedges
Most of the fair value hedges are related to financing activities and are presented in the
other operating income and expenses.
In thousands of Euro
2024 2023
On hedged items (63 424) (80 368)
On hedging instruments 63 424 76 728
Ineffective results of fair value hedges are not significant and relate to the cost of hedge.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202428
5. Financial instruments
Financial assets and liabilities
By class and by category
In thousands of Euro
2024 2023
Classes
At amortized cost
(a)
At fair value to
income statement
Total categories
At amortized cost
(a)
At fair value to
income statement
Total categories
Cash at bank and in hand
(a)
22 467 — 22 467 1 758 — 1 758
Time deposit
(a)
572 920 18 572 938 333 703 — 333 703
Loans and receivables
(a)
23 071 120 — 23 071 120 19 073 468 — 19 073 468
Liquid and non-current financial assets 23 666 507 18 23 666 525 19 408 928 — 19 408 928
Derivative assets — 70 156 70 156 — 4 077 4 077
Total financial assets 23 666 507 70 174 23 736 681 19 408 928 4 077 19 413 005
Loans and payables
(a)
(577 563) — (577 563) (382 926) — (382 926)
Financial debt
(b)
(23 104 099) — (23 104 099) (18 999 708) — (18 999 708)
Current and non-current financial liabilities (23 681 662) — (23 681 662) (19 382 634) — (19 382 634)
Derivative liabilities — (20) (20) — (18 518) (18 518)
Total financial liabilities (23 681 662) (20) (23 681 682) (19 382 634) (18 518) (19 401 152)
Net financial position (15 155) 70 154 54 999 26 294 (14 441) 11 853
of which at fair value 70 154 70 154 (14 441) (14 441)
(a) Carrying amount is a reasonable approximation of their fair value based on observable market data
(b) Financial debt includes bonds, commercial papers and bank overdrafts (Note 9)
Fair value hierarchy of financial instruments
In thousands of Euro
2024 2023
Derivative assets 70 156 4 077
Derivative liabilities (20) (18 518)
Valuation techniques based on observable market data (Level 2) 70 136 (14 441)
Total financial instruments at fair value 70 136 (14 441)
There have been no transfers between the different hierarchy levels in 2024.
There were no financial instruments within the category Level 1 (prices quoted in active
markets) and Level 3 (valuation techniques based on unobservable input). All financial
instruments are within Level 2 category.
29Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
5. Financial instruments
The fair values categorized in Level 2 above were determined as follows: derivatives are
valued based on discounted contractual cash flows using risk adjusted discount rates and
relying on observable market data for interest rates and foreign exchange rates.
Contractual maturities of financial liabilities and derivatives
The tables below show the liabilities as at December 31, 2024 and December 31, 2023,
categorized by their remaining contractual maturities.
The amounts disclosed in the maturity tables are undiscounted cash flows.
In thousands of Euro 2024
Contractual amount
three months or less
fourth to
twelfth month
in the second year
in the third to
fifth year
beyond the fifth year
Contractual amount
Carrying amount
Other liabilities 182 384 — — — — 182 384 182 384
Loans from Nestlé Group companies 395 179 — — — — 395 179 395 179
Commercial paper 3 576 464 333 269 — — — 3 909 733 3 893 430
Bonds 155 375 686 538 2 591 913 5 204 863 13 598 408 22 237 097 19 210 669
Debt securities issued 3 731 839 1 019 807 2 591 913 5 204 863 13 598 408 26 146 830 23 104 099
Gross amount receivable from currency
derivatives 1 813 964 305 417 — — — 2 119 381 2 106 841
Gross amount payable from currency derivatives (1 748 441) (293 397) — — — (2 041 838) (2 036 705)
Net derivatives 65 523 12 020 — — — 77 543 70 136
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202430
5. Financial instruments
In thousands of Euro 2023
Contractual amount
three months or less
fourth to
twelfth month
in the second year
in the third to
fifth year
beyond the fifth year
Contractual amount
Carrying amount
Other liabilities 120 236 — — — — 120 236 120 236
Loans and advances from Nestlé Group
companies 262 690 - - - - 262 690 262 690
Commercial paper 1 071 980 238 037 — — — 1 310 017 1 301 405
Bonds 571 195 827 190 760 488 5 772 902 12 218 568 20 150 343 17 698 303
Debt securities issued 1 643 175 1 065 227 760 488 5 772 902 12 218 568 21 460 360 18 999 708
Gross amount receivable from currency
derivatives 733 089 238 037 — — — 971 126 962 868
Gross amount payable from currency derivatives (738 919) (238 545) — — — (977 464) (977 309)
Net derivatives (5 830) (508) — — — (6 338) (14 441)
31Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
6. Other assets and liabilities
In thousands of Euro
2024 2023
Other financial assets
Intra Nestlé Group other receivables — 78
Other receivables 1 402 1 300
Total other assets 1 402 1 378
Other financial liabilities
Intra Nestlé Group other payables 1 879 1 469
Other payables 635 1 440
Accruals and deferred income 179 870 117 327
Total other liabilities 182 384 120 236
Deferred tax assets
In thousands of Euro
2024 2023
Opening balance 29 845 24 011
Increase/(decrease) (10 577) 5 834
Closing balance 19 269 29 845
7. Share capital, share premium and other reserves
2024 2023
Number of shares of nominal value EUR 2 each 220 000 220 000
In thousands of Euro 440 440
Share capital is set at EUR 440 000 represented by 220 000 shares with a nominal value
of EUR 2 each and is authorized, issued and fully paid. As at December 31, 2024 the share
premium is EUR 102 million.
Under Luxembourg law, NFI is allowed to deduct part of the net wealth tax from the
corporate income tax of the same year, provided that a reserve is created corresponding
to five times the net wealth tax deducted and that this reserve is maintained for a period
of five tax years following the year of deduction.
As at December 31, 2024, the net wealth tax reserve amounts to EUR 4 955 thousand
(2023: EUR 4 955 thousand) of which EUR 4 955 thousand is distributable to the
shareholder (2023: EUR 2 962 thousand).
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202432
7. Share capital, share premium and other reserves
The movements in other reserve for the period ended December 31, 2024 were as follows:
In thousands of Euro
2024 2023
Opening balance 4 955 4 955
Subtraction/addition — —
Closing balance 4 955 4 955
Under Luxembourg law, NFI is required to appropriate annually at least 5% of its statutory
net profit to a non-distributable legal reserve until the aggregate reserve reaches 10% of
the subscribed capital. The reserve is fully constituted for EUR 44 thousand.
As at December 31, 2024, the hedging cost reserve net of tax is EUR 350 thousand
(2023: EUR 281 thousand) associated with the fair value hedges.
8. Capital management
NFI monitors the capital using the equity at risk methodology. Equity at risk refers to the
share of equity which the lender will need to use in order to cover for potential losses
incurred should the borrower default on its obligations to repay the debt, to meet
obligations against its own lenders and to avoid insolvency. For purpose of determining
the amount of equity which the lender has at risk, the expected loss (EL) methodology
attempts to estimate the loss exposure of the particular lender by assessment of the risk
profile of his debt receivables, and by applying the outcome to the overall amount of debt
granted. To cover fully for the potential losses, the lender should have an equity buffer
equal to at least the amount of its overall exposure.
Therefore, to estimate the appropriate amount of NFI’s equity which is at risk because
of its financial intermediation activity, the following equation is applied:
Equity at risk = EL * Exposure at default
Therefore, the amount of equity NFI is assumed to have at risk as a result of its financial
intermediation activity amounts to EUR 26 938 thousand i.e. 0.12% by EUR 23 069 718
thousand (2023: EUR 23 062 thousand i.e. 0.12% by EUR 19 072 090 thousand).
The amount of EUR 26 938 thousand represents the minimum level of equity that NFI
must keep for accounting purposes to be able to bear the risks flowing from its financial
activity.
As at December 31, 2024, the actual share capital, share premium and accumulated
losses amount to EUR 68 919 thousand and is therefore above the minimum amount
defined above (2023: EUR 36 419 thousand).
33Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
9. Debt securities
Bonds
The outstanding amounts of bonds as at December 31, 2024 and December 31, 2023
were as follows:
In thousands of Euro
2024 2023
Face value
Interest rates
Years of issue/maturityNominal Effective
EUR 500.000 0.38% 0.54% 2017–2024 — 499 961
EUR 750.000 1.25% 1.32% 2017–2029 747 616 747 142
EUR 750.000 1.75% 1.83% 2017–2037 743 506 743 061
EUR 1.000.000 1.13% 1.27% 2020–2026 998 221 996 811
EUR 1.000.000 1.50% 1.63% 2020–2030 993 554 992 384
EUR 850.000 0.13% 0.25% 2020–2027 846 871 845 783
EUR 650.000 0.00% 0.05% 2020–2024 — 649 714
EUR 1.000.000 0.38% 0.56% 2020–2032 986 875 985 130
EUR 500.000 0.00% (0.26%) 2020–2025 501 196 502 498
EUR 500.000 0.00% 0.16% 2020–2033 493 578 492 790
EUR 500.000 0.38% 0.40% 2020–2040 498 411 498 315
EUR 1.250.000 0.00% 0.00% 2021–2026 1 250 042 1 250 093
EUR 750.000 0.25% 0.32% 2021–2029 747 760 747 260
EUR 500.000 0.63% 0.69% 2021–2034 497 104 496 797
EUR 650.000 0.88% 1.01% 2021–2041 636 874 636 143
EUR 600.000 0.88% 0.95% 2022–2027 598 950 598 486
EUR 600.000 1.25% 1.33% 2022–2031 597 163 596 729
EUR 800.000 1.50% 1.63% 2022–2035 790 277 789 409
EUR 500.000 3.00% 3.13% 2022–2028 497 946 497 344
EUR 500.000 3.25% 3.38% 2022–2031 496 480 495 963
EUR 500.000 3.38% 3.49% 2022–2034 495 200 494 800
EUR 850.000 3.50% 3.66% 2023–2027 846 314 845 151
EUR 850.000 3.75% 3.85% 2023–2033 843 954 843 337
EUR 500.000 3.50% 3.56% 2023–2030 498 584 498 332
EUR 500.000 3.75% 3.84% 2023–2035 496 188 495 910
GBP 400.000 5.13% 5.16% 2023–2038 480 737 458 960
EUR 750.000 3.00% 3.08% 2024-2031 746 852 —
EUR 750.000 3.25% 3.40% 2024-2037 739 252 —
EUR 500.000 2.63% 2.77% 2024-2030 496 153 —
EUR 650.000 3.13% 3.20% 2024-2036 645 011 —
Total 19 210 669 17 698 304
of which due in twelve months 501 196 1 149 676
of which due in the second year 2 248 263 502 498
of which due between three to five years 2 790 081 4 536 324
of which due after five years 13 671 129 11 509 806
Fair value of bonds, based on prices quotes (level 2) 18 153 628 16 572 219
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202434
9. Debt securities
These bonds are admitted to trading on the London Stock Exchange’s regulated market
and the Luxembourg Stock Exchange. The fair value is defined on prices quoted at year
end as published by the relevant stock exchange.
As at December 31, 2024 and 2023, NFI has no open position hedged by interest rate
derivative.
Issue and repayment of bonds
Several series of bonds were issued in 2024 for EUR 2 650 000 thousand gross less the
loan origination cost of EUR 24 005 thousand (2023: EUR 3 160 747 thousand gross minus
the loan origination cost of EUR 17 534 thousand).
One series of bonds was repaid at maturity during the financial year ended December
31, 2024 in the amount of EUR 1 150 000 thousand (2023: EUR 963 727 thousand).
Commercial Paper
The outstanding amounts of commercial paper at December 31, 2024 were as follows:
In thousands of Euro
2024 2023
Commercial papers due within three months 3 565 379 1 068 164
Commercial papers due within nine months 328 051 233 240
The interest rates of the commercial paper are between 2.53% and 4.94% (2023: 1.05%
and 5.46%).
Carrying amount of these instruments is a reasonable approximation of their fair value
based on observable market data.
During the year 2024, NFI issued commercial paper in the amount of EUR 37 492 466
thousand (2023: EUR 47 376 921 thousand) and repaid in the amount of EUR 34 988 922
thousand (2023: EUR 49 332 068 thousand).
10. Transactions with related parties
Financing of the Nestlé Group companies
The principal activity of NFI is the financing of Nestlé S.A. and its affiliates. NFI assess the
impairment risk based on principles and methodology disclosed in Note 2.
The transactions with Nestlé Group companies are based on arm’s length prices. In
2022, NFI transferred a major part of the long-term loans granted to Nestlé Group entities
to a single Nestlé Group entity. The remaining part of the loans have been transferred in
2023. In exchange, NFI grants loans denominated in EUR to this single entity.
35Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
10. Transactions with related parties
The balances of transactions with related parties for the financial year ended December
31, 2024 are presented below:
In thousands of Euro
2024 2023
Assets
Loans to Nestlé Group companies excluding accrued interest 22 956 817 19 014 163
Accrued interest on loans to Nestlé Group companies 112 901 57 926
Total assets 23 069 718 19 072 090
Liabilities
Loans from Nestlé Group companies excluding accrued interest 395 179 262 690
Other payables to Nestlé Group companies 1 879 1 469
Total liabilities 397 058 264 159
Net assets 22 672 660 18 807 931
In thousands of Euro
2024 2023
Interest income on loans to Nestlé Group companies 497 132 345 026
Interest expense on loans from Nestlé Group companies (8 913) (17 671)
Grant, receipt and repayments of loans for the financial year ended December 31, 2024
were as follows:
In thousands of Euro
2024 2023
Loans granted to Nestlé Group companies excluding accrued interest:
Granted to the shareholder of the company 15 026 048 12 450 000
Granted to Nestlé affiliates 3 074 373 44 002 399
Repayments of loans granted to Nestlé Group companies excluding accrued interest:
Repaid by the shareholder of the company (10 267 000) (10 655 000)
Repaid by Nestlé affiliates (3 916 710) (45 660 287)
Net loans granted/(repaid) by Nestlé Group companies 3 916 711 137 111
Loans granted by Nestlé affiliates excluding accrued interest 17 262 690
Repayments of loans received from Nestlé affiliates excluding accrued interest (132 505) —
Net loans received/(repaid) to Nestlé Group companies (132 489) 262 690
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202436
10. Transactions with related parties
The transactions included in the above tables and in Notes 3 and 7 are transactions made
between the parent company, Nestlé S.A. and NFI.
These are detailed in the table below:
In thousands of Euro
2024 2023
Payables to Nestlé S.A. 1 879 1 469
In thousands of Euro
2024 2023
Other financial expenses to Nestlé S.A. (7 001) (19 446)
The ECL calculation is related to the loans granted to Nestlé Group companies (see Note
12) for EUR 1 928 thousand (2023: EUR 916 thousand).
11. Guarantees
Nestlé S.A. is the guarantor of NFI in respect of all debt securities issued as described
in the Note 9 for both the short and long-term.
The issuance programs and guarantees applicable to NFI are: EUR 25 billion Global
Commercial Paper Program (2023: EUR 25 billion), EUR 2 billion NEU CP French
Commercial Paper (2023: EUR 2 billion) and Debt Issuance Program (DIP). All bonds
issued are guaranteed by Nestlé S.A.
NFI itself has not provided any guarantees in favor of third parties.
12. Risks and uncertainties
NFI is exposed to certain risks and uncertainties that could have a material adverse impact
on its financial condition and operating results.
Capital risk
NFI’s capital management is driven by the impact on the risk on loans granted of the level
of total loans granted.
Management seeks to maintain a prudent balance between the risk and the capital.
Concentrations of risk
The risks are primarily concentrated among Nestlé affiliated companies given the purpose
of the Company with primary exposure in EUR following the transfer of the loans to a
single Nestlé Group entity with the associated credit risk and foreign currency exposure.
The majority of NFI’s assets represents receivables from other Nestlé Group
companies. This situation is reflected in the assessment of risk of default and the
measurement of the allowance for expected credit loss.
Credit risk
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations
resulting in financial loss to the Company.
37Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
12. Risks and uncertainties
NFI aims to minimize the credit risk of liquid assets, non-current financial assets and
derivative assets through the application of the Nestlé Group risk management policies.
Credit limits are set based on each counterparty’s size and risk of default. The
methodology used to set the credit limit considers the counterparty’s balance sheet,
credit ratings, risk ratios and default probabilities. Counterparties are monitored regularly,
taking into consideration the evolution of the above parameters, as well as their share
prices and credit default swaps. As a result of this review, changes on credit limits and
risk allocation are carried out. NFI avoids the concentration of credit risk on its liquid
assets by spreading them over several institutions and sectors.
The maximum exposure to credit risk resulting from financial activities is equal to the
carrying amount of NFI’s financial assets (Note 10 for loans and advances to Nestlé
affiliates) in case the counterparties are unable to fulfil their contractual obligations. The
Company is also exposed to credit risk from derivative instruments, which results from the
risk of non-performance of contractual agreements by the counterparty.
Credit risk of financial assets
As at December 31, 2024 and as at December 31, 2023, the cash and cash equivalents
and the short-term investments are deals with counterparties rated A- and above.
Therefore, the ECL is immaterial.
As at December 31, 2024, NFI has measured the expected credit loss (ECL) on loans to
Nestlé affiliates (Note 2), no other financial assets were impaired.
In thousands of Euro
2024 2023
Grade Nominal ECL calculated Nominal ECL calculated
A- and above 21 421 504 1 928 16 597 790 916
Total 21 421 504 1 928 16 597 790 916
Banking credit
As part of its financing activities, NFI deals with many banks and financial institutions,
thus the Company is exposed to a risk of loss in the event of non-performance by the
counterparties to financial instruments. While NFI seeks to limit such risk by dealing with
counterparties which have high credit ratings (A- and above), NFI cannot give any
assurance that counterparties will fulfill their obligations, failure of which could materially
affect NFI’s financial position.
Market risk
NFI is exposed to risk from movements in foreign currency exchange rates, interest rates
and market prices that affect its assets, liabilities and future transactions.
Currency fluctuations
NFI is exposed to currency fluctuations, both in terms of its financing activities. While NFI
uses short-term hedging for trading activities, the Company does not believe that it is
appropriate or practicable to hedge long-term translation exposure. However, NFI seeks
mitigation of such translation exposure by relating the currencies of trading cash flow to
those of its debt by using broadly similar interest and currency swap contracts. If NFI
experiences significant currency fluctuations or is unable to use similar interest and
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202438
12. Risks and uncertainties
currency swap contracts effectively, then NFI’s financial condition could be adversely
affected.
In thousands of Euro
2024
EUR USD GBP JPY Others
Cash and cash equivalents 135 822 20 964 438 074 161 384
Derivative assets — 38 534 — 31 623 —
Loans to Nestlé Group
companies 21 418 329 822 082 17 750 811 552 —
Other financial assets 1 402 — — — —
Total financial assets 21 555 553 881 580 455 824 843 336 384
Derivative liabilities — 20 — — —
Loans from Nestlé Group
companies 395 179 — — — —
Debt securities issued 20 073 199 2 550 164 480 737 — —
Other financial liabilities 182 384 — — — —
Total financial liabilities 20 650 762 2 550 184 480 737 — —
Net position by currency 904 791 (1 668 604) (24 913) 843 336 384
In thousands of Euro
2023
EUR USD GBP JPY Others
Cash and cash equivalents 195 694 41 135 98 240 — 392
Derivative assets — 4 077 — — —
Loans to Nestlé Group
companies 17 531 586 285 092 507 631 — 747 783
Other financial assets 1 378 — — — —
Total financial assets 17 728 658 330 304 605 871 — 748 175
Derivative liabilities — 18 153 365 — —
Loans from Nestlé Group
companies 262 673 17 — — —
Debt securities issued 17 239 343 1 301 404 458 960 — —
Current tax liabilities 115 — — — —
Other financial liabilities 120 236 — — — —
Total financial liabilities 17 622 368 1 319 574 459 325 — -
Net position by currency 106 290 (989 270) 146 546 — 748 175
39Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
12. Risks and uncertainties
EUR per
2024 2023
Year ending rates
1 US Dollar USD 1.041 1.107
1 Pound Sterling GBP 0.829 0.868
Interest rate risk
Interest rate risk refers to potential changes of value in financial assets, liabilities or
derivatives in response to fluctuations in interest rates. NFI holds a substantial volume of
interest rate sensitive financial assets, liabilities and derivatives for operational, financing
and investment activities.
Changes in interest rates can have an adverse effect on the financial position and
operating results of NFI. To mitigate the impact of interest rate risk, the Group’s exposure,
including NFI, is assessed on a continuous basis. Interest rate risk is managed and
hedged using derivative financial instruments, such as interest rate swaps, currency
swaps and forward rate agreements. When deemed appropriate, there might be
unhedged positions.
NFI determines the existence of an economic relationship between the hedging
instrument and the hedged item based on the reference interest rates, tenors, repricing
dates and maturities and the notional or par amounts.
Considering the impact of interest derivatives, the proportion of financial debt subject
to fixed interest rates for a period longer than one year represents 100% (2023: 100%).
Value at Risk (“VaR”)
Description of the method
The VaR is a single measure to assess market risk. The VaR estimates the size of losses
given current positions and possible changes in financial markets. NFI uses simulation to
calculate VaR based on the historic data for a period of 261 days.
The VaR calculation is based on a 95% confidence level and, accordingly, does not
consider losses that might occur beyond this level of confidence. The VaR is calculated
based on unhedged exposures outstanding at the close of business and does not
necessarily reflect intra-day exposures.
Objective of the method
NFI uses the described VaR analysis to estimate the potential one-day loss in the fair value
of its financial instruments. NFI cannot predict the actual future movements in market
rates, therefore, the below VaR numbers neither represent actual losses nor consider the
effects of favorable movements in underlying variables. Accordingly, these VaR numbers
may only be considered indicative of future movements to the extent the historic market
patterns repeat in the future.
VaR figures
The VaR computation includes NFI’s financial assets and liabilities that are subject to
foreign currency and interest rate risk.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202440
12. Risks and uncertainties
The estimated potential one-day loss from NFI’s foreign currency and interest rate risk
sensitive instruments, as calculated using the above described historic VaR model, is as
follows:
In thousands of Euro
2024 2023
Foreign currency 4 472 2 316
Interest rate 151 —
Foreign currency and interest rate combined 4 513 2 315
Liquidity risk
Liquidity risk is the risk that a company may encounter difficulties in meeting its
obligations associated with financial liabilities that are settled by delivering cash or other
financial assets.
NFI has access to ample liquidity, including short-term and medium-term capital
markets, through the Nestlé Group’s Debt Issuance Program (DIP), Global Commercial
Paper Program of up to a combined aggregate amount of EUR 25 billion equivalent and
NEU CP French Commercial Paper of up to a combined aggregate amount of EUR 2 billion
equivalent, enjoying the benefit of issuance with Nestlé S.A.’s AA- rated guarantee. All
international recognized agencies rating the credit of Nestlé S.A. and its affiliates,
including NFI, may qualify or alter such rating at any time. Downgrades or placement on
review for possible downgrades could harm the Nestlé Group’s, including NFI’s, ability to
obtain financing or increase its financing costs and could have a material adverse effect on
the price of debt instruments issued by NFI and thereby significantly affect NFI’s financial
position. Therefore, NFI depends on broad access to these capital markets and investors.
Changes in demand for term debt instruments on capital markets could limit the ability of
NFI to fund other members of the Nestlé Group.
NFI depends on the willingness of banks to provide credit lines or loans. Due to
structural changes in the banking business, the willingness of banks to provide credit
lines and loans has declined over the past years. In order to reduce and minimize the
dependence on banks, NFI has taken measures to maintain its access to the capital
markets. For information on contractual maturities of financial liabilities and derivatives,
refer to Note 5 Financial instruments.
Risk of an increase in cost of capital
NFI’s capital management is driven by the impact on shareholders of the level of total
capital employed. NFI’s policy aims to maintain a sound capital base to support the
continued development of its business. However, increases in the cost of borrowing could
negatively affect the operating results of NFI. Increases in borrowing costs could arise
from changes in demand for term debt instruments in the capital markets, the removal of
the unconditional and irrevocable guarantee of Nestlé S.A. and a decreasing willingness
of banks to provide credit lines and loans.
Treasury operations
During its business, the Nestlé Group, including NFI, has substantial assets under
management. Although the Nestlé Group has implemented risk management methods,
including approved guidelines and financial policies to mitigate and control such risks,
because of holding such assets, it is exposed to credit risk, interest rate risk, foreign
exchange risk and credit spreads. Returns on such assets may also be affected by limited
41Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 2024
12. Risks and uncertainties
exposure to yield enhancing absolute return funds. In addition, adverse changes in the
credit quality of counterparties or a general deterioration in economic conditions or arising
from systemic risks in the financial systems could affect the value of those assets and
thereby materially affect NFI’s financial position.
13. Directors
The Board of Directors of NFI comprises five Directors. The Directors do not receive any
remuneration for their mandate.
14. Staff
In Luxembourg NFI employed on average six full-time employees in 2024 and 2023. All
these employees provide treasury and accounting services.
15. Events after the balance sheet date
On January 7, 2025, NFI launched and priced a dual-tranche bond transaction totaling
EUR 1.1 billion which comprised of a EUR 600 million 7-year and a EUR 500 million 20-year
tenor.
As at March 20, 2025, there are no other subsequent events which either warrant a
modification of the value of its assets and liabilities or any additional disclosure.
Nestlé Finance International Ltd. – Annual Financial Report for the year ended as at December 31, 202442
Raoul Heinen, Director, Martin Huber, Director, Patrick Yot,
Director, Hermann Beythan, Director, Bruno Chazard,
Director confirm that to the best of their knowledge:
(a) the financial statements of NFI for the annual period
ended December 31, 2024, which have been prepared in
accordance with IFRS as adopted by the European Union
as well as with the laws and regulations in force in the
Grand-Duchy of Luxembourg, give a true and fair view of
the assets, liabilities, financial position and profit or loss
of NFI; and
(b) the management report includes a fair review of the
development and performance of the business and the
position of NFI, together with a description of the
principal risks and uncertainties that it faces.
March 20, 2025
Responsibility Statement