Slide 1: Full-year results 2020
SUNE SAN Nestlé Good food, Good life oye Full-year ae results 2020
Slide 2: Disclaimer
Disclaimer This presentation contains forward looking statements which reflect Management’s current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements.
Slide 3: Full-year results 2020 - Mark Schneider, CEO
Full-year results 2020 Mark Schneider, CEO
Slide 4: Key messages 2020
Key messages 2020 • Rising to the challenge of the global pandemic – Employee safety, business continuity, community support • Strong financial results – Organic sales growth of 3.6% – Underlying trading operating profit margin increases by 10 bps to 17.7% • Portfolio transformation fully on track •
Slide 5: Third consecutive year of improved growth and margins
Third consecutive year of improved growth and margins Organic sales growth Underlying trading operating profit (%) (in % of sales) 3.6 17.7 16.5 2.4 2017 2020 2017 2020 Target set in 2017: restated Target set in 2017: mid-single digit 17.5% - 18.5% 5 February 18, 2021 Nestlé full-year results 2020
Slide 6: Continued progress in 2020 towards mid single-digit organic sales growth
Continued progress in 2020 towards mid single-digit organic sales growth • High-growth categories and channels • PetCare: +10.2% organic sales growth • Coffee: Starbucks brand with ~CHF 400 m incremental sales, Nespresso with +7.0% organic sales growth • Plant-based food: strong double-digit organic
Slide 7: Further developing our portfolio
Further developing our portfolio > 75 transactions Divesting under-performing closed or announced or non-core businesses since 2017, equivalent to ~ 18% of Group sales North Market attractiveness America US Waters Organic sales growth Confectionery Acquiring / investing in high-growth contribution i
Slide 8: Nestlé's Net Zero Roadmap
Nestlé’s Net Zero Roadmap Our path to regeneration for future generations Path to zero emissions by 2050 Moving faster Scaling up Delivering our Business as usual promise 92m tonnes of GHG emissions 20% reduction by 2025 50% reduction by 2030 Net Zero by 2050
Slide 9: Sustainability is key to our value-creation strategy
Sustainability is key to our value-creation strategy • Balancing short-term and long-term stakeholder expectations • Creating competitive advantage by enhancing relevance with consumers, regulators, employee base and investors • Keeping sustainability investments earnings neutral through growth leve
Slide 10: 2021 guidance
2021 guidance • Continued increase in organic sales growth towards a mid single-digit rate • Underlying trading operating profit margin with continued moderate improvement • Underlying earnings per share in constant currency and capital efficiency expected to increase 10 February 18, 2021 Nestlé ful
Slide 11: Mid-term outlook
Mid-term outlook • Sustained mid single-digit organic sales growth • Continued moderate underlying trading operating profit margin improvements • Continued prudent capital allocation and capital efficiency improvements • Value creation for both society and our shareholders 11 February 18, 2021 Nestl
Slide 12: Full-year results 2020 - François-Xavier Roger, CFO
Full-year results 2020 François-Xavier Roger, CFO
Slide 13: Full-year sales growth
Full-year sales growth OG +3.6% +0.4% +3.2% -4.6% -7.9% 92.6 84.3 Reported sales growth -8.9% -30 FY-2019 sales RIG Pricing Net M&A Foreign FY-2020 sales CHF bn exchange CHF bn 13 February 18, 2021 Nestlé full-year results 2020
Slide 14: Contrasted momentum by channel
Contrasted momentum by channel Organic sales growth Retail Out-of-home* FY-2019 FY-2020 FY-2019 FY-2020 7.0% 3.4% 4.0% -30.4% * Includes Nestlé Professional, foodservice activities of Nespresso, Starbucks products and water, travel retail and Blue Bottle 14 February 18, 2021 Nestlé full-year results
Slide 15: Strong growth in retail sales
Strong growth in retail sales Organic sales growth % Retail Out-of-home* 8.6 6.9 6.8 5.7 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2020 Q2-2020 Q3-2020 Q4-2020 -11.2 -26.5 -27.0 -54.7 * Includes Nestlé Professional, foodservice activities of Nespresso, Starbucks products and water, travel retail and Blue B
Slide 16: Broad-based growth with strong momentum in the Americas
Broad-based growth with strong momentum in the Americas AMS EMENA AOA Sales 37.7 bn 24.5 bn 22.1 bn (in CHF) RIG 5.3% 2.6% 0.5% Pricing 0.7% -0.2% 0.3% OG 6.0% 2.4% 0.8% Each geography includes zones, Nestlé Waters, Nespresso, Nestlé Health Science and Nestlé Skin Health 16 February 18, 2021 Nestlé
Slide 17: Strong real internal growth in developed markets
Strong real internal growth in developed markets Developed Emerging Sales (in CHF) 49.4 bn 34.9 bn % of Group sales 59% 41% RIG 4.6% 1.4% Pricing -0.8% 2.0% OG 3.8% 3.4% 17 February 18, 2021 Nestlé full-year results 2020
Slide 18: Zone AMS
Zone AMS Sales CHF 34.0 bn Organic growth 4.8% Real internal growth 4.1% Underlying TOP margin 20.5% vs LY +40 bps • Strong momentum, supported by robust RIG and positive pricing • North America saw mid single-digit growth, led by Purina PetCare, coffee and frozen food • Growth in Latin America reac
Slide 19: Zone EMENA
Zone EMENA Sales CHF 20.2 bn Organic growth 2.9% Real internal growth 3.3% Underlying TOP margin 18.6% vs LY +50 bps • Highest organic growth in the last five years, with broad-based market share gains • All regions contributed positively, with strong momentum in Russia, Germany, the UK and Israel •
Slide 20: Zone AOA
Zone AOA Sales CHF 20.7 bn Organic growth 0.5% Real internal growth 0.0% Underlying TOP margin 22.2% vs LY -30 bps • Positive organic growth, led by pricing • China saw negative growth due to the timing of Chinese New Year and declines in out-of-home channels • Other regions combined grew at a mid s
Slide 21: Other Businesses
Other Businesses Sales CHF 9.4 bn Organic growth 7.9% Real internal growth 7.3% Underlying TOP margin 19.6% vs LY +90 bps • Nespresso accelerated to 7.0% organic growth, led by e- commerce and the Vertuo system • Nestlé Health Science posted 12.2% organic growth, with strong demand for products that
Slide 22: Contrasted category dynamics
Contrasted category dynamics Organic sales growth % 10.2% 7.9% 4.7% 3.6% 3.2% 1.7% Confectionery Water Total Group Powdered and PetCare Nutrition and Prepared dishes Milk products Liquid Beverages Health Science and cooking aids and Ice cream -1.5% -7.0% 22 February 18, 2021 Nestlé full-year results
Slide 23: Underlying trading operating profit margin by category
Underlying trading operating profit margin by category In % of sales 24.1% 22.5% 22.0% 21.7% 18.8% 17.7% 14.2% 10.0% Change in bps +10 +10 +60 -40 +100 +370 -270 -240 vs FY-2019 Total Group* Powdered and PetCare Nutrition and Prepared dishes Milk products Confectionery Water Liquid Beverages Health
Slide 24: Further improvement in gross margin
Further improvement in gross margin Excluding Nestlé Skin Health Gross margin = (Sales - Cost of good sold) / Sales 49.6% 49.6% 49.1%* 49.1% 49.1% 49.0% Excl. Nestlé Skin Health 48.7% 48.3%* 2017 2018 2019 2020 * Restated to reflect implementation of IFRS 15, IFRS 16 and reclassification of certain
Slide 25: Continued margin expansion
Continued margin expansion Underlying TOP margin, including Nestlé Skin Health +10 bps17.4% 17.8% 17.7% 17.6% 17.1% +70 bps -60 bps -30 Margin increased by +20 bps in constant currency Underlying TOP COGS & Administration, Underlying TOP Currency Underlying TOP FY-2019 Distribution Marketing, FY-202
Slide 26: Continued margin expansion (pro forma, excluding Nestlé Skin Health)
Continued margin expansion Underlying TOP margin pro forma, excluding Nestlé Skin Health 17.4% +10 bps 17.8% +10 bps 17.7% +10 bps 17.5% 17.5% -30 Margin increased by + 30 bps in constant currency Underlying TOP COGS & Administration, Underlying TOP Currency Underlying TOP FY-2019 Distribution Marke
Slide 27: Increased underlying EPS in constant currency
Increased underlying EPS in constant currency % of sales 2020 vs 2019 Underlying trading operating profit 17.7% +10 bps Restructuring +30 bps Impairment of assets +130 bps Onerous contracts, litigations and other operating income / expenses +40 bps Trading operating profit 16.9% +210 bps Gain / loss
Slide 28: Continued improvement in working capital
Continued improvement in working capital Working capital as a % of sales, calculated on a 5-quarter average 5.3% 4.7% 2.8% 2.2% IFRS restatement 1.6% 1.4% 0.6% 0.0% 2014 2015 2016 2017 2018 2019 2020 Note: 2017 restated, reflecting implementation of IFRS 15 and IFRS 16 28 February 18, 2021 Nestlé fu
Slide 29: Steady progress in ROIC, led by disciplined capital allocation
Steady progress in ROIC, led by disciplined capital allocation 14.7% ** 13.1% 12.1% * 11.4% 11.2% 10.8% 10.9% 2014 2015 2016 2017 2018 2019 2020 * Excludes impairment of Nestlé Skin Health and restated to reflect implementation of IFRS 15 and IFRS 16 ** Excludes impairment of Yinlu 29 February 18, 2
Slide 30: Strong free cash flow
Strong free cash flow Free cash flow in % of sales 13.5% 12.9% 13.0% 12.1% 12.5% 11.8% 12.0% 11.5% * 11.0% 10.4% 10.5% 10.0% 9.5% 9.0% 2017 2018 2019 2020 8.5% * Restated, reflecting implementation of IFRS 15 and IFRS 16 30 February 18, 2021 Nestlé full-year results 2020
Slide 31: Net debt
Net debt CHF 14.5 bn returned In CHF bn to shareholders +0.6 -0.7 +7.7 -10.2 +6.8 31.3 27.1 -30 Net debt increased by CHF 4.2 bn Net debt Share Dividends M&A Other Free cash Net debt Jan 1, 2020 buyback (net) flow Dec 31, 2020 Net debt/ Net debt/ Adjusted EBITDA: 1.4x Adjusted EBITDA: 1.7x 31 Februa
Slide 32: Full-year results 2020
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Slide 33: Full-year results 2020 - Supporting slides
Full-year results 2020 Supporting slides
Slide 34: FY-2020 Operating segments – quarterly summary
FY-2020 Operating segments – quarterly summary Q4-2020 sales Sales RIG Pricing OG (CHF m) % % % Zone AMS 9 019 2.6 1.6 4.2 Zone EMENA 5 274 3.3 -0.2 3.1 Zone AOA 5 479 0.7 0.9 1.6 Other Businesses 2 659 8.7 0.5 9.2 Total Group 22 431 3.0 0.9 3.9 34 February 18, 2021 Nestlé full-year results 2020
Slide 35: FY-2020 Operating segments – topline summary
FY-2020 Operating segments – topline summary FY-2020 sales Reported Sales RIG Pricing OG Net M&A F/X sales growth (CHF m) % % % % % % Zone AMS 34 010 4.1 0.7 4.8 -5.0 -9.9 -10.1 Zone EMENA 20 226 3.3 -0.4 2.9 -2.1 -6.6 -5.8 Zone AOA 20 730 0.0 0.5 0.5 -0.1 -6.7 -6.3 Other Businesses 9 377 7.3 0.6 7.
Slide 36: FY-2020 Products – topline summary
FY-2020 Products – topline summary FY-2020 sales Sales RIG Pricing OG (CHF m) % % % Powdered and liquid beverages 22 256 2.8 0.4 3.2 Water 6 421 -5.5 -1.5 -7.0 Milk products and ice cream 11 007 5.6 2.3 7.9 Nutrition and Health Science 12 160 1.2 0.5 1.7 Prepared dishes and cooking aids 11 523 4.7 0
Slide 37: FY-2020 historical eight quarters
FY-2020 historical eight quarters Period RIG Pricing OG % % % Q1-2019 2.2 1.2 3.4 Q2-2019 3.0 0.9 3.9 Q3-2019 3.9 -0.2 3.7 Q4-2019 2.5 0.5 3.0 Q1-2020 4.7 -0.4 4.3 Q2-2020 0.5 0.8 1.3 Q3-2020 4.8 0.1 4.9 Q4-2020 3.0 0.9 3.9 37 February 18, 2021 Nestlé full-year results 2020
Slide 38: FY-2020 Operating segments – revenue and results
FY-2020 Operating segments – revenue and results In CHF m Of which Underlying Net other impairment trading Trading trading of property, Of which Depreciation operating operating income/ plant and restructuring and Sales profit profit (expense) equipment costs amortization Zone AMS 34 010 6 975 6 724
Slide 39: FY-2020 Products – revenue and results
FY-2020 Products – revenue and results In CHF m Underlying Of which trading Trading Net other impairment of Of which operating operating trading income/ property, plant restructuring Sales profit profit (expense) and equipment costs Powdered and Liquid Beverages 22 256 5 008 4 824 (184) (93) (38) Wa
Slide 40: FY-2020 currency overview
FY-2020 currency overview Weighted average rate FY-2019 FY-2020 Variation in % US Dollar 1 USD 0.993 0.937 -5.6% Euro 1 EUR 1.112 1.070 -3.8% Chinese Yuan Renminbi 100 CNY 14.366 13.596 -5.4% UK Pound Sterling 1 GBP 1.269 1.202 -5.3% Brazilian Reais 100 BRL 25.118 18.175 -27.6% Philippine Peso 100 P
Slide 41: FY-2020 underlying EPS reconciliation (1 of 2)
FY-2020 underlying EPS reconciliation (1 of 2) From net profit to underlying net profit In CHF m FY-2019 FY-2020 Net profit 12 609 12 232 Restructuring costs 553 220 Impairments of property, plant & equipment, goodwill and int. assets 2 336 711 Net result on disposal of businesses (3 416) (1 678) Ot
Slide 42: FY-2020 underlying EPS reconciliation (2 of 2)
FY-2020 underlying EPS reconciliation (2 of 2) From underlying trading operating profit to In CHF m underlying net profit FY-2019 FY-2020 Underlying trading operating profit 16 260 14 903 Net financial income / (expense) (1 016) (874) Adjusted taxes (3 294) (2 965) Adjusted income from associates an
Slide 43: Abbreviations
Abbreviations • OG Organic growth • RIG Real internal growth • AMS Zone Americas • EMENA Zone Europe, Middle East, and North Africa • AOA Zone Asia, Oceania, and sub-Saharan Africa • EPS Earnings per share • COGS Cost of goods sold • FCF Free cash flow • TOP Trading operating profit • UTOP Underlyin