Nestle S.a. · SIX:NESN
Nestle — FY2009 Earnings Presentation
60 slides from Nestle's earnings presentation, Feb 19, 2010
Slide 1: Nestlé Press conference, February 19, 2010
Nestlé Press conference, February 19, 2010
Slide 2: 19 February 2010 | Nestlé Press conference
2 | 19 February 2010 | Nestlé Press conference
Slide 3: Nestlé Press conference, Paul Bulcke, CEO
Nestlé Press conference, February 19, 2010 Paul Bulcke Chief Executive Officer Nestlé S.A.
Slide 4: Executive Board members
Richard Laube John Harris Laurent Freixe Luis Cantarell Frits van Dijk Jim Singh 4 | 19 February 2010 | Nestlé Press conference
Slide 5: Executive Board members
Robin Tickle Werner Bauer José Lopez Petraea Heynike Marc Caira Jean-Marc Duvoisin 5 | 19 February 2010 | Nestlé Press conference
Slide 6: 2009 turbulent and challenging environment
2009 turbulent and challenging environment ies alit re ew o n g t stin dju s a ay : alw stlé Ne | 19 February 2010 | Nestlé Press conference
Slide 7: Doing what we always do
Doing what we always do Managing Taking advantage the downsides of the upsides Market Limited Sales volume Gaining Leverage market uncertainty access to capital and prices under pressure market share opportunities Scenario Capital Operational Product R&D Excellence Portfolio planning discipline Exce
Slide 8: Nestlé 2009
Nestlé 2009 • Faster growth than industry • Top and bottom line performance • Investing for future in capacity, R&D and brands 8 | 19 February 2010 | Nestlé Press conference
Slide 9: 2009 Performance
2009 Performance Organic growth 4.1% EBIT CHF 15.7 billion EBIT margin + 30 bps 14.6% EBIT margin in constant currencies + 40 bps 9 | 19 February 2010 | Nestlé Press conference
Slide 10: Nestlé Press conference, James Singh, CFO
Nestlé Press conference James Singh Chief financial officer 19 February 2010 | Nestlé Press Conference
Slide 11: 2009 Full Year Highlights
2009 Full Year Highlights • 4.1% Organic Growth outperformed industry: again an excellent broad-based performance building on momentum throughout the year • EBIT margin increased 40 basis points (CC) whilst increasing investment in growth • Nestlé Continuous Excellence: over CHF 1.5 billion efficien
Slide 12: 10 years of the Nestlé Model
10 years of the Nestlé Model Driving Organic Growth & EBIT Margin Improvement 14.3% 14.6% 14.0% 13.5% 12.9% 12.5% 12.6% 12.3% 11.8% 11.8% 11.1% 9.7% 10-year annual averages 8.3% Organic Growth 6.2% 7.4% Real Internal Growth 3.5% 6.2% 6.2% Price 2.7% 5.4% 4.9% 5.1% EBIT margin +30bps 4.5% 4.7% 4.1% 4
Slide 13: 2010 Food & Beverages guidance
2010 Food & Beverages guidance • Improve Organic Growth over 2009 level • Increase EBIT margin in constant currencies • Total cash returns to shareholders in 2010: About CHF 15.6 billion (dividends & share buy-backs) 14 19 February 2010 2009 full year results
Slide 14: Strong Full Year 2009 Performance
Strong Full Year 2009 Performance Improvements in EBIT, EPS; record Free Cash Flow Actuals Sales (Group) 107.6 bio Organic Growth 4.1%, net divestments -0.7%, FX of -5.5% EBIT (Group) 14.6% Up 30 bps reported and up 40 bps at CCY EBIT (F&B after Center costs) 13.1% Up 30 bps reported and up 40 bps a
Slide 15: Strong growth acceleration in the last quarter of 2009
Strong growth acceleration in the last quarter of 2009 Food & Beverages figures % Organic Growth % RIG 5.3 4.2 3.6 3.6 3.2 1.6 0.4 -0.1 Jan-Mar Apr-Jun Jul-Sep Oct-Dec 16 19 February 2010 2009 full year results
Slide 16: Operating Segments: Zones
Operating Segments: Zones 6.7 6.5 % Organic Growth % RIG 4.6 2.8 0.3 -0.9 Zone Zone Zone Europe Americas AOA Sales (CHF bn) 22.5 32.2 15.9 EBIT (CHF bn) 2.8 5.4 2.7 EBIT (% / bp) 12.4 16.8 16.7 EBIT margin (+/- bps) +0 +20 +20 17 19 February 2010 2009 full year results
Slide 17: Operating Segments: Globally Managed Businesses and Other F&B
Operating Segments: Globally Managed Businesses and Other Food & Beverages 6.8 % Organic Growth % RIG 3.6 2.8 0.0 -1.4 -1.5 Nestlé Other Nestlé Waters Nutrition F&B Sales (CHF bn) 9.1 10.0 10.2 EBIT (CHF bn) 0.6 1.7 1.6 EBIT (%) 7.0 17.4 15.7 EBIT margin (+/-bps) +100 +10 +80 18 19 February 2010 200
Slide 18: Products: F&B
Products: F&B % Organic Growth % RIG 9.5 7.9 5.6 4.3 3.1 2.0 1.3 0.8 0.8 -1.0 Powdered & Milk Products Prep. Dishes Confectionery Petcare Liquid Bev. & Ice Cream & Cooking Aids Sales (CHF bn) 19.3 19.6 17.2 11.8 12.9 EBIT (CHF bn) 4.2 2.3 2.2 1.6 2.1 EBIT (%) 21.7 12.0 12.9 13.6 16.3 EBIT margin (+/
Slide 19: Performance of Billionaire Brands
Performance of Billionaire Brands Organic Growth Over 20% 10.1 to 20% 7.6 to 10% 5.1 to 7.5% 3.1 to 5% 0.0 to 3% Below 0% 20 19 February 2010 2009 full year results
Slide 20: EBIT performance: Continuous year after year sustainable improvement
EBIT performance: Continuous year after year sustainable improvement +40 +110 -80 -30 14.6% 14.3% -10 +30 FY08 EBIT COGS Distribution Marketing Admin. R&D FY09 EBIT • Nestlé Continuous Excellence exceeds CHF1.5bn of efficiencies • Gross margin up 110 bps; distribution cost fall 40 bps • Marketing up
Slide 21: Very strong Cash Flow performance
Very strong Cash Flow performance • Operating cash flow up 67% or CHF 7.2 billion to CHF 17.9 billion. Mainly driven by: Cash in from operations Decrease of Net Trade Working Capital • Free Cash Flow up 146% or CHF 7.4 billion to CHF 12.4 billion. Mainly driven by : 17.9 Improvement of Operating Cas
Slide 22: Total Cash Returned to Shareholders
Total Cash Returned to Shareholders CHF bn 15 10 5 Share Buy-Back 1.3 2.7 4.4 8.7 7.0 10.0* Dividend 3.1 3.5 4.0 4.6 5.0 5.6* 2005 2006 2007 2008 2009 2010 *estimates 2005-2009: CHF 44.3bn cash returned to shareholders 2010: an additional CHF 15.6bn likely to be returned 23 19 February 2010 2009 ful
Slide 23: Total Performance Framework
Total Performance Framework DRIVING PERFORMANCE ACHIEVING SIMPLICITY Organic Growth 4.1%; F&B 3.9% Divested businesses, annualised sales > CHF 0.8 bio PPP: CHF 8.8 bio (OG + 12.7%) SKU Rationalisation: reduced by -16 % Growth with Top Ten Customers Factories: -7 from 456 to 449 Net Trade Working Cap
Slide 24: Nestlé Press conference, Paul Bulcke, CEO
Nestlé Press conference Paul Bulcke Chief Executive Officer Nestlé S.A. 19 February 2010 | Nestlé Press Conference
Slide 25: Nestlé roadmap
Nestlé roadmap Competitive Unmatched Unmatched advantages research & geographic development presence capability Unmatched People, product culture, and brand values and portfolio attitude Innovation Nutrition & renovation Health and Wellness Our objective is to be the recognised leader in Nutrition,
Slide 26: Nestlé's ambition
Nestlé’s ambition Competitive Unmatched Unmatched advantages research & geographic development presence capability Unmatched People, product culture, and brand values and portfolio attitude Innovation Nutrition & renovation Health and Wellness Our objective is to be the recognised leader in Nutritio
Slide 27: Competitive advantages
Competitive advantages Unmatched Unmatched research & geographic development presence capability Unmatched People, product culture, and brand values and portfolio attitude 27 | 19 February 2010 | Nestlé Press conference
Slide 28: Growth drivers
Growth drivers Emerging markets and Out-of-home Popularly consumption Positioned Products Nutrition Health and Premiumisation Wellness 28 | 19 February 2010 | Nestlé Press conference
Slide 29: Operational pillars
Operational pillars Operational Whenever, efficiency wherever, however Innovation Consumer & renovation communication 29 | 19 February 2010 | Nestlé Press conference
Slide 30: Creating Shared Value
Creating Shared Value 30 | 19 February 2010 | Nestlé Press conference
Slide 31: Nestlé roadmap
Nestlé roadmap Competitive Unmatched Unmatched advantages research & geographic development presence capability Unmatched People, product culture, and brand values and portfolio attitude Innovation Nutrition & renovation Health and Wellness Our objective is to be the recognised leader in Nutrition,
Slide 32: Zone Americas 2009
Zone Americas 2009 Higher RIG than 2008 Zone EBIT margin increase Brazil double-digit OG 32 | 19 February 2010 | Nestlé Press conference
Slide 33: Zone Americas 2009
Zone Americas 2009 Anderson RTD factory, USA 33 | 19 February 2010 | Nestlé Press conference
Slide 34: Zone Americas 2009
Zone Americas 2009 Toluca Nescafé factory, Mexico 34 | 19 February 2010 | Nestlé Press conference
Slide 35: Zone Americas 2009
Zone Americas 2009 Skinny Cow ice cream products | 19 February 2010 | Nestlé Press 35 conference
Slide 36: Zone Americas 2009
Zone Americas 2009 Kraft Frozen Pizza business 36 | 19 February 2010 | Nestlé Press conference
Slide 37: Zone Americas 2009
Zone Americas 2009 Gerber Graduates 37 | 19 February 2010 | Nestlé Press conference
Slide 38: Zone Americas 2009
Zone Americas 2009 Vitality acquisition 38 | 19 February 2010 | Nestlé Press conference
Slide 39: Zone Americas 2009
Zone Americas 2009 Nestlé Pure Life 39 | 19 February 2010 | Nestlé Press conference
Slide 40: Zone Europe 2009
Zone Europe 2009 Market positions defended Growth accelerated over year Brand support and innovation 40 | 19 February 2010 | Nestlé Press conference
Slide 41: Zone Europe 2009
Zone Europe 2009 Nescafé Dolce Gusto • 24 markets • Sales: CHF 300 million • 2010: 10 more markets 41 | 19 February 2010 | Nestlé Press conference
Slide 42: Zone Europe 2009
Zone Europe 2009 Maggi juicy chicken bag and spices 42 | 19 February 2010 | Nestlé Press conference
Slide 43: Zone Europe 2009
Zone Europe 2009 KitKat 43 | 19 February 2010 | Nestlé Press conference
Slide 44: Zone AOA 2009
Zone AOA 2009 Importance of emerging consumers Nestlé sales share projection: 45% by 2020 1 billion new consumers by 2020 Local market expertise 44 | 19 February 2010 | Nestlé Press conference
Slide 45: Zone AOA 2009
Zone AOA 2009 Totole bouillon factory in Shangai, China 45 | 19 February 2010 | Nestlé Press conference
Slide 46: Zone AOA 2009
Zone AOA 2009 Nutritional milk for seniors in China 46 | 19 February 2010 | Nestlé Press conference
Slide 47: Zone AOA 2009
Zone AOA 2009 Nesvita CalciPlus, Malaysia 47 | 19 February 2010 | Nestlé Press conference
Slide 48: Zone AOA 2009
Zone AOA 2009 Fortified affordable milks Caribbean Reg Algeria Q4-08 Q2-09 NME Bangladesh NEAR Philippines Q1-08 Q1-09 Q3-08 New Recipe: Morocco Q2-08 Q3-09 Mexico Central Am Cambodia Colombia Q3-07 Q2-08 Myanmar Q3 09 Q1-09 Pakistan Q2-09 Q3 09 Vietnam & Thailand Srilanka Pacific Islands CWAR Q4-08
Slide 49: The world of Nestlé
The world of Nestlé 49 | 19 February 2010 | Nestlé Press conference
Slide 50: Nestlé Continuous Excellence
Nestlé Continuous Excellence • Driving effectiveness and efficiency • Aligning action • CHF 1.5 billion savings 50 | 19 February 2010 | Nestlé Press conference
Slide 51: Investing for the future
Investing for the future ... in manufacturing capacity and R&D network and capabilities 51 | 19 February 2010 | Nestlé Press conference
Slide 52: Investing for the future
Investing for the future ... in consumer facing marketing 52 | 19 February 2010 | Nestlé Press conference
Slide 53: Captures the very essence of Nestlé
... captures the very essence of Nestlé and the promise we commit ourselves to everyday, everywhere as the leading Nutrition, Health and Wellness Company 53 | 19 February 2010 | Nestlé Press conference
Slide 54: Food is about pleasure
Food is about pleasure 54 | 19 February 2010 | Nestlé Press conference
Slide 55: Food is about balance
Food is about balance 55 | 19 February 2010 | Nestlé Press conference
Slide 56: Food is about understanding
Food is about understanding 56 | 19 February 2010 | Nestlé Press conference
Slide 57: Three dimensions
Three dimensions Pleasure Balance Understanding 57 | 19 February 2010 | Nestlé Press conference
Slide 58: Nestlé 2009
Nestlé 2009 • Faster growth than industry • Strong top and bottom line performance • Investment in capacity, R&D and brands 58 | 19 February 2010 | Nestlé Press conference
Slide 59: Nestlé 2010 outlook
Nestlé 2010 outlook In constant currencies: • higher organic growth in Food and Beverages than 2009 • EBIT margin increase Our confidence is reflected by: • increased dividend proposal • share buyback plans for 2010 59 | 19 February 2010 | Nestlé Press conference
Slide 60: Questions and answers
Questions and answers 60 | 19 February 2010 | Nestlé Press conference