Message to Shareholders

Resilience in a Dynamic Market
The Malaysian economy expanded by 5.2% in 2025, surpassing projections and reflecting stronger-than-expected momentum in domestic demand and key sectors including services, manufacturing and construction. Fourth-quarter growth accelerated to 6.3%, reflecting the broad-based drivers of economic activity even amid external pressures. 

This progress unfolded against persistent global headwinds, heightened geopolitical risks and intensive competition within the fast-moving consumer goods sector. Malaysian consumers remained cautious and discerning, sensitive to cost inflation and adapting consumption patterns to optimise shopping value. While targeted Government measures helped stabilise household spending, operating successfully in such an environment required agility and a keen understanding of local needs, capabilities that were central to the Group’s strong performance in 2025.

Anchored in trusted household brands, strong market positions and deep consumer insights, we remained focused on delivering our Good food, Good life promise, maintaining the high standards of quality, nutrition, food safety and integrity that have been the hallmark of Nestlé Malaysia for over 113 years. At the same time, we continued to play an active role as a force for good in society, leading the charge in the industry with ESG activities that were purposeful and comprehensive.

Advancing ESG and Sustainability
Our Creating Shared Value approach shapes how we grow responsibly, ensuring that business performance goes hand in hand with positive outcomes for society and the environment. Demonstrating our progress, 2025 saw the completion of our Project RELeaf reforestation initiative, reaching a cumulative total of three million trees planted nationwide since 2021, covering approximately 1,650 hectares. 

Together with the earlier Project RiLeaf in Sabah, our reforestation footprint now totals four million trees nationwide, making this the largest private-sector reforestation initiative in Malaysia and a meaningful contribution to the Government’s Greening Malaysia programme. In addition to environmental restoration, these initiatives strengthen climate resilience and generate sustainable income opportunities for rural communities. 

Another important pillar in our ESG efforts is responsible sourcing and advocating for more sustainable agricultural practices within Malaysia. To this end, we were honoured to be a founding member of the Malaysia Sustainable Palm Oil (MSPO) Impact Alliance in 2025, supporting industry efforts to improve traceability, strengthen smallholder inclusion and enhance alignment with international sustainability benchmarks.

Our Farmer Connect programmes continued to support rural development and national food security by enhancing farmer livelihoods and promoting sustainable production of key crops, including chilli, paddy, cocoa and coffee. Progress was evident in the Nestlé Borneo Cocoa Initiative, with locally cocoa sourced utilised in our made-in-Malaysia KIT KAT Dark Borneo and KIT KAT Dark Borneo Ice Cream products, supporting our ambition to source at least 10,000 metric tonnes of cocoa from Malaysian farms by 2034.

We continued to drive efficiencies and innovation across our manufacturing facilities. Sustainable packaging initiatives reduced virgin plastic usage by 1,738 tonnes, while production optimisation helped lower energy consumption per tonne of product by 5%, further reducing our environmental footprint.

Our flagship community recycling programme Project SAVE, the largest voluntary Extended Producer Responsibility (EPR) initiative in Malaysia, continued to expand in the Klang Valley and Penang. The programme recovered over 14,000 tonnes of post-consumer packaging waste, of which 11,050 tonnes were plastic, reinforcing circularity and encouraging household recycling nationwide.

In line with our long-standing commitment to nurturing healthier future generations, we celebrated the 15th anniversary of Nestlé for Healthier Kids (N4HK) during the year. In collaboration with the Ministry of Education and Nutrition Society of Malaysia, the programme has reached over 220,000 primary school children nationwide since its establishment, promoting healthier eating habits, balanced nutrition and active lifestyles.

Financial Performance
In 2025, the Group delivered healthy growth with sales rising to RM6.88 billion, close to the historical record achieved in 2023, up by 10.5% compared with 2024. This performance reflects the effectiveness of our strategic priorities and disciplined execution in a demanding operating environment. Our domestic sales saw positive growth as we upheld our leadership across key categories through consistent in-market execution, innovation and a trusted portfolio of Halal-certified products made in Malaysia, by Malaysians, for Malaysians. This enabled us to serve consumers across all segments and life stages, strengthening our relevance and connection with households nationwide.

Exports also saw double-digit growth, highlighting Malaysia’s strategic role as the Nestlé Group’s global Halal hub. Coupled with prudent cost management and operational efficiencies under our Nestlé Virtuous Growth approach, these results are a testament to the resilience of our portfolio and our CSV approach. 

Dividends
In line with our commitment to deliver sustainable returns to shareholders, the Board of Directors declared a third interim dividend of RM0.90 per share for the financial year ended 31 December 2025, 16 sen higher than the previous financial year. This brings total dividends for the year to RM2.20 per share, reflecting our balanced approach to rewarding shareholders while continuing to reinvest for long-term growth.

Corporate Governance
At a time where sustainability and progress are ever more reliant on high standards of accountability, transparency and ethical conduct, robust governance is essential to sustaining stakeholder trust and guiding our ESG practices.  Reflecting our dedicated efforts, Nestlé Malaysia was ranked among the Top 50 in the Excellence Award category at the National Corporate Governance & Sustainability Awards 2025, which recognises outstanding corporate governance and value creation among Malaysian public listed companies.

Supported by a comprehensive governance and risk management framework, we continued to integrate ESG and climate-related considerations into our decision-making processes during the year. This ensures that long-term environmental and social risks are managed alongside financial performance, thus enabling the Group to deliver sustainable value.

Awards
The year saw Nestlé Malaysia’s sustainability stewardship and industry leadership recognised with a series of accolades. The Group received the Malaysia International Halal Showcase (MIHAS) Excellence Award for Project SAVE, the country’s largest voluntary EPR initiative, alongside the HDC World Halal Excellence Award and ASEAN Halal Brand Awards, reflecting our ongoing dedication to trusted Halal and ethical business practices.

Our workplace and talent initiatives were also celebrated, with Nestlé Malaysia named the No. 1 FMCG employer at the Talentbank Graduates’ Choice Award, while maintaining a strong position in Malaysia’s 100 Leading Graduate Employers Awards, demonstrating our appeal as a preferred employer. In addition, our corporate reporting and governance efforts were recognised with a Silver award at the Australasian Reporting Awards (ARA), demonstrating the strength and transparency of our disclosures.

Outlook
Global uncertainty will persist in 2026, with geopolitical tensions, evolving trade dynamics and rapid technological advancement, including digitalisation and artificial intelligence is expected to shape a volatile global operating environment.

Within this context, Malaysia’s economic outlook remains steady. Resilient domestic demand, targeted government support, stable household income and the lowest unemployment rate in a decade are expected to support consumer confidence and spending, providing a constructive backdrop for the food and beverage sector.

For the Group, this environment reinforces the importance of our strategic priorities. With consumers at the heart of everything we do, we will continue to strengthen our core brands, maintain leading market positions and drive meaningful innovation that keeps our portfolio relevant, while upholding our promise of delivering Good food, Good life to Malaysians. Operational excellence is central to improving efficiency, advancing digitalisation and strengthening supply chain resilience. At the same time, we are firmly committed to our ESG objectives to positively impact people, communities and the planet.

As we look ahead, we do so with utmost appreciation for the trust placed in us by Malaysians, our Nestlé Malaysia family, and our valued partners throughout the value chain. That trust underpins our confidence as we navigate an operating environment that continues to be complex, yet full of opportunity. Grounded in strong fundamentals and guided by our purpose and values, we are committed to building shared progress for society and the environment, in tandem with delivering sustainable value for our shareholders and all stakeholders.