Nestle S.a. · SIX:NESN
Nestle — Autumn Press Conference 2008
80 slides from Nestle's conference presentation, Oct 23, 2008
Slide 1: Autumn Press Conference: Nestlé Full Year Results 2007
AUTUMN Nestlé FullPRESS CONFERENCE Year Results 2007 Paul Bulcke CEO 23 October 2008 Name of chairman
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: Nestlé S.A. Executive Board
Nestlé S.A. Executive Board 2 October 23, 2008 Press conference, CEO Presentation 2 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 4: Change in Executive Board
Change in Executive Board Joined Nestlé 1987 Nestlé France, Food and Nutrition Head of Nestlé Hungary Head of Nestlé Iberia Laurent Freixe Executive Vice President Zone Europe 3 October 23, 2008 Press conference, CEO Presentation 3 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 5: Key figures – 9 months 2008
Key figures – 9 months 2008 Record first-half EBIT margin USD 10.4 billion partial disposal of ALCON Accelerated share buy-back 8.9% organic growth for 9 months 4 October 23, 2008 Press conference, CEO Presentation 4 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 6: Turmoil in financial markets
Turmoil in financial markets 5 October 23, 2008 Press conference, CEO Presentation 5 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 7: Key facts
Key facts Global leader in nutrition, health and wellness 27 billionaire brands Market leader in out-of-home Excellent position in emerging economies World-class premium brands 6 October 23, 2008 Press conference, CEO Presentation 6 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 8: Jim Singh, Chief Financial Officer
Jim Singh Chief Financial Officer 7 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 9: Sales above target - organic growth of 8.9%
Sales above target - organic growth of 8.9% Total Group Food & Beverages CHF 81.4 bio CHF 75.8 bio +3.4% RIG + 8.9% +3.0% RIG + 8.9% organic organic growth growth PRICING & PRICING & +5.5% OTHERS +5.9% OTHERS + 3.5% + 3.4% total total evolution evolution +2.5% ACQU. / DIV. +2.5% ACQU. / DIV. -8.0% -
Slide 10: Primary reporting: Food and Beverages
Primary reporting: Food and Beverages A strong broad-based performance 22.8 % Organic growth % RIG 19.7 13.2 10.7 9.6 8.9 6.0 4.5 4.0 3.0 3.0 2.1 -1.0 -3.2 Zone Zone Zone Europe AMS AOA Nestlé Waters Nestlé Nutrition other F&B total F&B Sales CHF bio 21.0 23.8 12.7 7.6 7.8 2.9 75.8 9 AUTUMN PRESS CO
Slide 11: Organic growth by product group: Nestlé Waters
Jan. – Sept. 2008 : Organic growth by product group segment 16.0 Nestlé Waters Sales : 7.6 CHF bio 12.0 RIG : -3.2% OG : -1.0% Organic growth in % 8.0 4.0 Nestlé Waters 0.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 -4.0 Sales in bio CHF 10 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 12: Organic growth by product group: Nestlé Nutrition
Jan. – Sept. 2008 : Organic growth by product group segment 16.0 Nestlé Nutrition Sales : 7.8 CHF bio Nestlé 12.0 Nutrition RIG : +4.0% OG : +9.6% Organic growth in % 8.0 4.0 Nestlé Waters 0.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 -4.0 Sales in bio CHF 11 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 13: Organic growth by product group: Confectionery
Jan. – Sept. 2008 : Organic growth by product group segment 16.0 Confectionery Sales : 8.7 CHF bio 12.0 Nestlé RIG : +2.8% Nutrition OG : +9.1% Organic growth in % 8.0 Confectionery 4.0 Nestlé Waters 0.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 -4.0 Sales in bio CHF 12 AUTUMN PRESS CONFERENCE 2008 Name of ch
Slide 14: Organic growth by product group: PetCare
Jan. – Sept. 2008 : Organic growth by product group segment 16.0 PetCare PetCare Sales : 9.0 CHF bio Nestlé 12.0 Nutrition RIG : +5.0% OG : +11.4% Organic growth in % 8.0 Confectionery 4.0 Nestlé Waters 0.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 -4.0 Sales in bio CHF 13 AUTUMN PRESS CONFERENCE 2008 Name of
Slide 15: Organic growth by product group: Prepared Dishes
Jan. – Sept. 2008 : Organic growth by product group segment 16.0 Prepared Dishes PetCare & Cooking Aids Nestlé 12.0 Nutrition Sales : 13.1 CHF bio RIG : +1.4% Organic growth in % 8.0 OG : +6.3% Confectionery Prep. Dishes & Cooking Aids 4.0 Nestlé Waters 0.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 -4.0 Sales
Slide 16: Organic growth by product group: Beverages
Jan. – Sept. 2008 : Organic growth by product group segment 16.0 Powdered & Liquid Beverages Powdered & PetCare Liquid Beverages Nestlé 12.0 Nutrition Sales : 13.7 CHF bio RIG : +8.1% Organic growth in % 8.0 OG : +13.1% Confectionery Prep. Dishes & Cooking Aids 4.0 Nestlé Waters 0.0 4.0 6.0 8.0 10.0
Slide 17: Organic growth by product group: Milk Products & IC
Jan. – Sept. 2008 : Organic growth by product group segment 16.0 Powdered & Liquid Beverages Milk Products & IC PetCare Milk Products & IC Sales : 15.9 CHF bio Nestlé 12.0 Nutrition RIG : +1.7% OG : +10.8% Organic growth in % 8.0 Confectionery Prep. Dishes & Cooking Aids 4.0 Nestlé Waters 0.0 4.0 6.
Slide 18: Organic growth by product group: Pharma
Jan. – Sept. 2008 : Organic growth by product group segment 16.0 Powdered & Liquid Beverages Pharma PetCare Milk Products & Sales : 5.6 CHF bio Nestlé IC 12.0 Pharma Nutrition RIG : +8.9% OG : +9.5% Organic growth in % 8.0 Confectionery Prep. Dishes & Cooking Aids 4.0 Nestlé Waters 0.0 4.0 6.0 8.0 1
Slide 19: Nestlé Main Agricultural Commodities Index
Nestlé Main Agricultural Commodities Index Nestle Weighted Average Main Agricultural Commodities Index in CHF (Jan 1998=100) to end August 2008 170 Main Agricultural Commodities Index 150 Including Milk Powders 130 Price Index 110 90 70 50 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-
Slide 20: Financial position
Financial position • The industry "Gold Standard" credit rating – Exceptionally strong balance sheet; predictable cash flows • Short term strategy is cost efficient – Continued demand for Nestlé paper at sub-LIBOR rates • Reduced exposure to Commercial Paper – USD 10.4 billion proceeds from Alcon pa
Slide 21: Summary and improved guidance
Summary and improved guidance • 9-month sales continue early momentum, broad-based across all zones • Approximately 17% year-to-date September organic growth in emerging markets • Streamlining product portfolio of non-strategic, underperforming businesses with annualised sales up to CHF 1.0 bio • Fi
Slide 22: Paul Bulcke, CEO
Paul Bulcke CEO 21 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 23: Nestlé Model
Nestlé Model Annual organic growth 5 - 6% Sales Improvement of EBIT margin Improving capital efficiency / business ROIC / cash returns EBIT to shareholders 22 October 23, 2008 Press conference, CEO Presentation 22 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 24: Nestlé's four competitive advantages
Nestlé's four competitive advantages Products Comprehensive and brand portfolio geographic presence Industry-leading research and People, development culture and values 23 October 23, 2008 Press conference, CEO Presentation 23 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 25: Nestlé's four growth pillars
Nestlé's four growth pillars Nutrition Out-of-home Premium Emerging consumers and luxury 24 October 23, 2008 Press conference, CEO Presentation 24 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 26: NaturNes – new baby food generation
Nutrition NaturNes – new baby food generation All-natural Ingredients cooked separately Steam-cooled Premium-priced First-to-market advantage 25 October 23, 2008 Press conference, CEO Presentation 25 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 27: NaturNes – breakthrough product
Nutrition NaturNes – breakthrough product 26 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 28: Popularly Positioned Products
PPPs Popularly Positioned Products 1 billion new consumers in next 10 years Low-cost business model Double-digit growth 27 October 23, 2008 Press conference, CEO Presentation 27 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 29: PPPs in the Philippines
PPPs PPPs in the Philippines 28 October 23, 2008 Press conference, CEO Presentation 28 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 30: Sari-sari stores in Philippines
PPPs Sari-sari stores in Philippines 29 October 23, 2008 Press conference, CEO Presentation 29 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 31: Micro distributors in Philippines
PPPs Micro distributors in Philippines 30 October 23, 2008 Press conference, CEO Presentation 30 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 32: Maggi in France
PPPs Maggi in France 31 October 23, 2008 Press conference, CEO Presentation 31 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 33: Hispanic population in North America
PPPs Hispanic population in North America 32 October 23, 2008 Press conference, CEO Presentation 32 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 34: PPPs – vast and diverse markets
PPPs PPPs – vast and diverse markets 33 October 23, 2008 33 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 35: Nestlé Professional – out-of-home
Out-of-home Nestlé Professional – out-of-home Market for Nestlé USD 400 billion Nestlé already market leader Nestlé Professional to double business within 10 years 34 October 23, 2008 Press conference, CEO Presentation 34 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 36: Nestlé Professional – beverage solutions
Out-of-home Nestlé Professional – beverage solutions 35 October 23, 2008 Press conference, CEO Presentation 35 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 37: Nestlé Professional – food solutions
Out-of-home Nestlé Professional – food solutions Nestlé Professional Customer Innovation Center Solon, Ohio 36 October 23, 2008 Press conference, CEO Presentation 36 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 38: Nestlé Professional - Customer Innovation Campus
Out-of-home Nestlé Professional - Customer Innovation Campus Product application kitchen 37 October 23, 2008 Press conference, CEO Presentation 37 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 39: Nestlé Professional - Customers
Out-of-home Nestlé Professional - Customers 38 October 23, 2008 Press conference, CEO Presentation 38 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 40: Premium and luxury
Premiumisation Premium and luxury 39 October 23, 2008 39 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 41: Nespresso chocolates
Premiumisation Nespresso chocolates 40 October 23, 2008 Press conference, CEO Presentation 40 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 42: Four examples of rapid alignment
Four examples of rapid alignment 41 October 23, 2008 Press conference, CEO Presentation 41 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 43: GLOBE - overview
GLOBE - overview GLOBE – three main objectives: Leverage our size Unite and align Exploit e-technology 42 October 23, 2008 Press conference, CEO Presentation 42 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 44: GLOBE - efficiencies
GLOBE - efficiencies Nestlé India: USD multi-million efficiencies implementing best practices Nestlé Chile: Vendor managed inventory solutions Nestlé Philippines: Cost reductions & improved field sales coverage 43 October 23, 2008 Press conference, CEO Presentation 43 AUTUMN PRESS CONFERENCE 2008 Na
Slide 45: GLOBE – integrated at new acquisitions
GLOBE – integrated at new acquisitions 44 October 23, 2008 Press conference, CEO Presentation 44 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 46: Nestlé Continuous Excellence
Nestlé Continuous Excellence Nestlé Integrated Management System Quality, Safety, Environment, Standards Leadership Development Coaching and Empowerment Goal Alignment Operational Masterplanning, Performance Measures, Operations Review, Problem Solving Measure, Monitor, Organize TPM Audits, Self Ass
Slide 47: NCE - performance examples
NCE - performance examples Biscuit factory Brazil: Increased productivity by 27% Ice Cream factory U.S.: Quality defects reduced by 70% Nutrition factory U.S.: Reduced inventory by 13% 46 October 23, 2008 Press conference, CEO Presentation 46 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 48: Nestlé R&D network
Nestlé R&D network York Singen Osthofen Minneapolis Fremont Vittel Rzezsow Marysville Amiens Beijing Solon Lisieux St. Louis Beauvais Tours Queretaro Sderot Shanghai Casa Buitoni Singapore NRC Lausanne Konolfingen Orbe Bev. Center Orbe 47 October 23, 2008 Press conference, CEO Presentation 47 AUTUMN
Slide 49: R&D - open innovation partnerships
R&D - open innovation partnerships Research Development Implementation of on new ideas of new ideas products and services Universities, and Start-Ups Venture Capital Key Suppliers The " Wider Nestlé " 48 October 23, 2008 Press conference, CEO Presentation 48 AUTUMN PRESS CONFERENCE 2008 Name of chai
Slide 50: Nestlé in Greater China
Nestlé in Greater China 49 October 23, 2008 Press conference, CEO Presentation 49 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 51: Nestlé quality control in Greater China
Nestlé quality control in Greater China 50 October 23, 2008 Press conference, CEO Presentation 50 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 52: Product safety testing
Product safety testing 51 October 23, 2008 Press conference, CEO Presentation 51 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 53: Nestlé agronomists train milk farmers
Nestlé agronomists train milk farmers 52 October 23, 2008 Press conference, CEO Presentation 52 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 54: Public Notice 25 (PRC Government)
Public Notice 25 (PRC Government) 53 October 23, 2008 53 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 55: Nestlé operations in Greater China
Nestlé operations in Greater China 54 October 23, 2008 Press conference, CEO Presentation 54 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 56: Nestlé R&D Center, Beijing
Nestlé R&D Center, Beijing 55 October 23, 2008 Press conference, CEO Presentation 55 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 57: Nestlé Waters: Business Overview & Perspectives
Nestlé Waters: Business Overview & Perspectives John J. Harris CEO Name of chairman
Slide 58: Nestlé Waters #1 in value
Nestlé Waters #1 in value 25 Market Share 07 Value 20 19.2 15 10 9.4 8.0 4.8 5 0 NESTLE COCA-COLA DANONE PEPSI Source: Zenith Report 2007 – Plain Water 57 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 59: Brand portfolio is aligned to key consumer need states & targets
Brand portfolio is aligned to key consumer need states & targets STATUS BRANDS « Premium drinking » LOCAL BRANDS «Untouched purity» FAMILY HYDRATION « Nestlé Quality & Safety » 58 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 60: Nestlé Waters = global #1 of bottled water
Nestlé Waters = global # 1 of bottled water Value Market Share (100% plain water) 25 19,2% 20 15,7% 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 Source: Zenith Report 2007 59 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 61: Results Nestlé Waters / Sept YTD
Results Nestlé Waters / Sept YTD 08 vs 07 RIG OG YTD 07 YTD 08 YTD 07 YTD 08 5.4% - -3.2% 6.9% --1.0% 60 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 62: Unfavorable economic context
Unfavorable economic context Consumers are feeling trapped LOWER SPENDING POWER Falling Wealth, Income & Credit RISING COSTS Rising Living, Household Expenses 61 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 63: Increasing environmental sensitivity
Increasing environmental sensitivity In some countries bottled water has turned into a symbol of anti-sustainability 62 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 64: Water is essential to nutrition, health and wellness
Water is essential to nutrition, health and wellness % of water in human body 75% 65% 60% 50% 63 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 65: Opportunity for Nestlé Waters
Opportunity for Nestlé Waters A positive contribution to a global health issue 2005 Overweight = 1.6 billion adults incl. 400 million obese adults Projection by 2015 +40% Overweight = 2.3 billion adults incl. 700 million obese adults Source: WHO 64 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 66: Opportunity for Nestlé Waters: calorie intake
Opportunity for Nestlé Waters A positive contribution to a global health issue % of beverage in daily calorie intake 21% in USA Additional calorie intake (last 40 years) + 226 kcal / day in USA 67% from beverages Source: B.M Popkin – Ph.D Nutrition 65 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 67: Nutrition, health & wellness through healthy hydration
Nutrition, health & wellness through healthy hydration 66 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 68: Healthy hydration (Thailand)
Nutrition, health & wellness through healthy hydration (Thailand) 67 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 69: Healthy hydration (USA)
Nutrition, health & wellness through healthy hydration (USA) 68 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 70: Sustainability - recycling
Sustainability - recycling BW vs. municipal waste stream 0.3% in USA BW vs. total waste production 0.03% in France Source: IBWA / AEMF 69 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 71: Sustainability – use less packaging
Sustainability – use less packaging Packaging weight per L produced -22% 2002 2007 70 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 72: Sustainability – Nestlé Waters
Sustainability – Nestlé Waters "Eco-Shape" best in class bottle USA RESIN USED (grams) Continuous ContinuousImprovement: Improvement: Global Global Environmental EnvironmentalFootprint Footprint (GEF) (GEF) Packaging Packaging Recycling Recycling (sensitization (sensitization ++ education) education
Slide 73: Tell the full story to stakeholders & media
Tell the full story to stakeholders & media 72 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 74: Nestlé Pure Life nº1 bottled water brand in the world
Nestlé Pure Life nº1 bottled water brand in the world #1 in value in 2007, present in 25 countries Value in Mio$ in 2007 Nestlé Pure Life 3,259 Coca-Cola Dasani 3,007 Pepsi Aquafina 2,996 Poland Spring 2,104 Evian 1,801 Crystal Geyser 1,561 Arrowhead 1,413 Volvic 1,330 Vittel 1,133 Perrier 1,089 Sou
Slide 75: Nestlé Pure Life outstanding growth results since 1998
Nestlé Pure Life outstanding growth results since the launch in 1998 28 % CAGR in the last 4 years 4.4 BL 3.3 BL +33% 2.6 BL +27% 1.9 BL +37% 2004 2005 2006 2007 BL = billion litres 74 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 76: Nestlé Pure Life: growth +16% YTD Sept 08
Nestlé Pure Life: growth + 16% YTD Sept 08 75 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 77: The strengths of Nestlé Pure Life model
The strengths of Nestlé Pure Life model § Unique concept focused on NHW : healthy family hydration § The credentials of Nestlé: trust & quality § Customized taste to local needs § Local multi-sourcing to ensure lower total delivery cost & closeness to consumption areas § Simplicity & adaptability of
Slide 78: Back to the Nestlé Model
Back to the Nestlé Model § Communicate health benefits of Nestlé Waters § Continue focus on sustainability § Accelerate Nestlé Pure Life growth in emerging countries 77 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 79: The Healthy Hydration Company
The Healthy Hydration Company TM 78 AUTUMN PRESS CONFERENCE 2008 Name of chairman
Slide 80: Concluding remarks and questions
Concluding remarks and questions 79 October 23, 2008 Press conference, CEO Presentation 79 AUTUMN PRESS CONFERENCE 2008 Name of chairman