Slide 1: Full-year results 2017 Conference
Full-year results 2017 Conference 1 | February 15, 2018 | Nestlé full-year results 2017
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 2017 – Mark Schneider, CEO
Full-year results 2017 Mark Schneider, CEO 3 | February 15, 2018 | Nestlé full-year results 2017
Slide 4: Key messages
Key messages • Organic growth at the higher end of industry, at lower end of our guidance • Solid improvement of underlying trading operating margin puts us on track for our 2020 margin target • Continued focus on organic sales growth and operating efficiencies • Encouraging progress with our portfo
Slide 5: 2017 performance highlights
2017 performance highlights Sales Organic growth Real internal Underlying TOP growth margin* CHF 89.8 bn +2.4% +1.6% +50 bps * In constant currency 5 | February 15, 2018 | Nestlé full-year results 2017
Slide 6: Delivering on our commitments
Delivering on our commitments Commitments 2017 Achievements • Deliver balanced growth with margin • Industry-leading volume growth; all categories improvement with positive sales growth; UTOP +50 bps* • Optimize portfolio • U.S. Confectionery, Atrium, Blue Bottle Coffee… • Drive speed and simplicity
Slide 7: Clear path to achieving mid-single digit growth by 2020
Clear path to achieving mid-single digit growth by 2020 2017 examples: • E-commerce sales: +32%* OG 2017 examples: • Nespresso U.S.: mid-teens OG Acquisitions: • Petcare in emerging markets: 2017 examples: Atrium, Blue Bottle +17% OG Coffee, Sweet Earth, • Yinlu stabilized Mid-single Chameleon • Per
Slide 8: Operating efficiencies driving margin improvement
Operating efficiencies driving margin improvement FY structural costs* as a % of sales (Manufacturing, Procurement, G&A) 19.6% 19.2% 19.2% 18.7% 2014 2015 2016 2017 * On comparable basis, excluding Froneri 8 | February 15, 2018 | Nestlé full-year results 2017
Slide 9: Active portfolio management
Active portfolio management U.S. Confectionery/Atrium example Disposed: USD 2.8 billion Acquired: USD 2.3 billion • Sales: ~USD 900 million • Sales: ~USD 700 million • 2015-2017 CAGR: negative sales growth • 2015-2017 CAGR: double-digit sales growth 9 | February 15, 2018 | Nestlé full-year results 2
Slide 10: 2018 outlook
2018 outlook • Organic sales growth of 2% to 4% • Underlying trading operating margin improvement in line with 2020 target • Restructuring costs* of around CHF 700 million • Increase in underlying EPS** and capital efficiency * Not including impairment of fixed assets, litigation and onerous contrac
Slide 11: Full-year results 2017 – François-Xavier Roger, CFO
Full-year results 2017 François-Xavier Roger, CFO 11 | February 15, 2018 | Nestlé full-year results 2017
Slide 12: 2017 performance highlights
2017 performance highlights Growth Underlying TOP Free cash flow Underlying EPS* margin* OG +2.4% CHF RIG +1.6% +50 bps 8.5 bn +4.7% +40 bps on a reported basis 9.5% of sales +4.6% on a reported basis * in constant currency 12 | February 15, 2018 | Nestlé full-year results 2017
Slide 13: Broad-based growth across geographies
Broad-based growth across geographies AMS EMENA AOA Sales 40.7 bn 26.1 bn 23.0 bn (in CHF) RIG 0.6% 1.8% 3.3% OG 1.3% 2.5% 4.3% Each geography includes zones, Nestlé Waters, Nestlé Nutrition, Nestlé Professional, Nespresso, Nestlé Health Science and Nestlé Skin Health 13 | February 15, 2018 | Nestlé
Slide 14: Accelerated RIG in emerging markets
Accelerated RIG in emerging markets Developed Emerging Sales (in CHF) 51.3 bn 38.5 bn % of group sales 57% 43% RIG 0.7% 3.0% OG 0.7% 4.8% 14 | February 15, 2018 | Nestlé full-year results 2017
Slide 15: Driving growth through innovation
Driving growth through innovation I&R product launches increased by 8% in 2017 Nutrition Coffee Petcare Culinary Confectionery Dairy 15 | February 15, 2018 | Nestlé full-year results 2017
Slide 16: Driving value through premiumization
Driving value through premiumization Premium products grew twice as fast as group average in 2017 Premium as % of group sales 21% 16% 11% 2012 2014 2017 16 | February 15, 2018 | Nestlé full-year results 2017
Slide 17: Channel innovation by going direct to consumer
Channel innovation by going direct to consumer DTC channel contributing an increasing share of sales DTC as a % of Group sales 7.9% 6.6% 2015 2017 17 | February 15, 2018 | Nestlé full-year results 2017
Slide 18: Underlying TOP +50 bps driven by structural cost reduction
Underlying TOP +50 bps* driven by structural cost reduction 40 bps structural cost savings +10 bps -70 bps +110 bps 16.0% • Commodity 16.5% • Structural cost costs reduction • Structural cost • Marketing reduction efficiencies -30 Underlying TOP COGS & Marketing & Currency impact Underlying TOP FY 2
Slide 19: Further progress on working capital
Further progress on working capital Working capital as a % of sales, calculated on a 5-quarter average 6.5% 5.3% 4.7% 2.8% 2.2% 2013 2014 2015 2016 2017 19 | February 15, 2018 | Nestlé full-year results 2017
Slide 20: 2018 focus
2018 focus 2018 priorities 2018 outlook • Maintain volume growth • Organic sales growth of 2% to 4% • Margin improvement, in line with our • Underlying trading operating margin 2020 target improvement • Continued focus on structural savings • Restructuring costs* of around CHF 700m program • Capital
Slide 21: Full-year results 2017 – Discussion
Full-year results 2017 Discussion 21 | February 15, 2018 | Nestlé full-year results 2017
Slide 22: 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 Underlying TOP/ Trading operating