Slide 1: CAGNY 2019
CAGNY 2019 François-Xavier Roger: EVP, Chief Financial Officer
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: Our strengths
Our strengths • Presence in 190 countries Global reach • Unparalleled channel and point of sale reach Attractive • Active in 7 of the top 10 fastest growing food & beverage categories product portfolio • 85% of sales in categories with #1 or strong #2 market positions • Iconic global and local brand
Slide 4: Our long-term value creation model
Our long-term value creation model Balanced pursuit of top-line and bottom-line growth with capital efficiency Increase Growth Improve Margins Allocate Capital Maximize Reach mid-single digit Reach underlying Prudently Long-Term organic growth by trading operating profit 2020 margin of 17.5% to Shar
Slide 5: Strong 2018 financial results
Strong 2018 financial results Organic growth Underlying trading Underlying EPS operating profit margin (% annual increase in constant currency) 17.0% 16.5% 3.0% 13.9% 2.4% 4.7% 2017 2018 2017 2018 2017 2018 Return on Free cash flow Cash returned to invested capital (CHF bn) shareholders (CHF bn) 13.
Slide 6: Balanced and diversified portfolio
Balanced and diversified portfolio 2018 Sales: CHF 91.4 bn 2018 Organic Growth EMENA 4.4% 29% 2.8% 2.1% AMS 45% AOA 26% AMS EMENA AOA 6 | February 22, 2019 | CAGNY
Slide 7: Strong emerging market footprint delivering profitable growth
Strong emerging market footprint delivering profitable growth 2018 Sales: CHF 91.4 bn 2018 Organic Growth Developed Emerging 4.9% 58% 42% 1.6% Emerging Developed 7 | February 22, 2019 | CAGNY
Slide 8: Growing in all product categories
Growing in all product categories 2018 Sales: CHF 91.4 bn 2018 Organic Growth Water 8% 4.6% 4.5% Confectionery Powdered & 9% liquid beverages 24% 3.3% 2.7% 2.3% Prepared dishes & cooking aids 1.8% 13% 1.2% Nutrition & Health Science PetCare 18 % Powdered Nutrition Milk PetCare Prepared Confectionery
Slide 9: Revived growth in key markets
Revived growth in key markets Geographies USA Greater China region Organic Growth Organic Growth 5.0% 2.6% 1.6% 0.2% 2017 2018 2017 2018 9 | February 22, 2019 | CAGNY
Slide 10: Strong growth in key categories and channels
Strong growth in key categories and channels Categories Channels Infant Nutrition E-Commerce Organic Growth Intensity (as % of sales) 18% OG 7.4% 6.2% 3.7% 0.9% 2017 2018 2017 2018 10 | February 22, 2019 | CAGNY
Slide 11: Investing selectively in high-growth categories
Investing selectively in high-growth categories High growth categories account for: 57% of sales 61% of underlying trading Already deliver growth operating profit around mid single-digit 4.0 % Other Other Coffee categories Coffee categories Petcare 39% Petcare 43% Infant Nutrition Infant Nutrition 1
Slide 12: Growth supported by meaningful innovations
Growth supported by meaningful innovations NAN HMO Nespresso Vertuo System Coffee-mate natural bliss (Human Milk Oligosaccharides) Reached > CHF 600 m of sales Reached > CHF 400 m of sales Reached ~ CHF 150 m of sales across 40 markets in the first year with growth of > 60% in 2018 with growth > 30%
Slide 13: Developing our portfolio
Developing our portfolio Sold Under Acquired or invested Main criteria for divestiture strategic review Main criteria for acquisitions • Non-core to business • Fit with strategy and culture • Limited ability to win • Sound financial model; disciplined and thorough financial valuation U.S. Confection
Slide 14: Savings programs on track
Savings programs on track Expected savings Savings delivered Savings Delivered (2020 over 2016) (2016-2018) (2016-2018) (in CHF bn) (in CHF bn) (in %) Manufacturing 0.6 – 0.8 0.2 ~30% Initiatives Procurement 0.5 – 0.6 0.5 ~90% General & Administrative 0.9 – 1.1 0.5 ~50% Total savings (CHF bn) 2.0 –
Slide 15: Key structural savings projects are delivering results
Key structural savings projects are delivering results • Review of our manufacturing footprint completed Manufacturing • 24 factories closed or sold 2017-2018 • Fixed factory overheads reduced by ~2% in 2018 • Global buying increased to 55%, from 40% in 2015 Procurement • Reduced suppliers by >10% s
Slide 16: Restructuring investment needed to support efficiency programs
Restructuring investment needed to support efficiency programs ~ 700 673 651 CHF mn 300 165 2015 2016 2017 2018 2019 guidance 16 | February 22, 2019 | CAGNY
Slide 17: On track to achieve our 2020 targets
On track to achieve our 2020 targets Organic growth (%) Underlying trading operating profit (% of NNS) Mid 17.5 single- to digit 18.5 3.2 3.0 17.0 2.4 16.5 16.0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Restated 17 | February 22, 2019 | CAGNY
Slide 18: A long-term approach delivers strong total shareholder returns
A long-term approach delivers strong total shareholder returns Consistent TSR* Performance CHF 118 bn returned to shareholders since 2008 2008-2018 10 year 5 year 3 year 1 year Nestlé 250% 55% 13% 2% CHF 49 bn CHF 69 bn Share buybacks Dividend payments STOXX F&B 216% 49% 5% -4% • *Total Shareholder
Slide 19: Key takeaways
Key takeaways • In key geographies, categories and channels Improving growth • Driven by faster innovation • Savings program on track Increasing margins • Further savings to come in manufacturing, procurement, G&A • ~ CHF 14 bn of transactions completed in 2018 Managing portfolio • Skin Health and H
Slide 20: Thank you!
BENG Nestlé Good Food, Good Life Thank you! ~ faa EE