Niq Global Intelligence Plc · NYSE:NIQ

Niq Global Intelligence — NielsenIQ — Conference Presentation (April 2021)

31 slides from Niq Global Intelligence's conference presentation, April 2021

Slide 1: Busting myths about price & promotions during the pandemic
Busting myths about price & promotions during the pandemic Peter Shapiro April 2021 Intelligent Analytics US Patricia Momesso Intelligent Analytics LatAm January 2021 Bennett Cox Intelligent Analytics Global Markets Mark Hogan (Moderator) Global Product and Delivery Leader, Price & Promotion © 2021
Slide 2: Agenda
Agenda Global & consumer landscape Myth #1: Price elasticities have generally increased Myth #2: Consumers are comparing products’ prices more Myth #3: Discounts matter more Whats next? 2 © 2021 Nielsen Consumer LLC. All Rights Reserved.
Slide 4: There are fewer trips but larger baskets (LatAm)
There are fewer trips but larger baskets (LatAm) To compensate for a lower frequency of trips, LatAm shoppers increased their basket size % Change vs same period YA of avg visits and avg $ ticket Source: Nielsen CPS Julio: México, Colombia, Brasil, Chile 4 © 2021 Nielsen Consumer LLC. All Rights Res
Slide 5: After lockdown, % of sales sold via promotion dropped dramatically (Canada)
After lockdown, % of sales sold via promotion dropped dramatically (Canada) Canada - total tracked sales - % of dollars sold on any promo 3/11: WHO declares pandemic 3/13: Stay-at-home order, non essential travel ban, schools close 3/16: Canada’s borders close, stock market crashes Source: Nielsen M
Slide 6: Large size products are more frequently purchased (LatAm)
Large size products are more frequently purchased (LatAm) Consumers are buying more of large sized items to avoid frequent trips to stores December - February April - May July - August Small sizes 42% 39% 37% IMP VAL PROM LatAm Large sizes 25% 27% 29% Source Nielsen RMS muestra de categorías más rel
Slide 7: Online purchases have skyrocketed (U.S.)
Online purchases have skyrocketed (U.S.) Satisfying a trifecta of motives — safe, economical, convenient Online penetration in CPG +47% Everyday items purchased online increased Source: Nielsen Omnichannel Shopping Fundamentals online survey ﬁelded in nationally representative Nielsen Homescan Panel
Slide 8: Way back in the Great Recession, elasticities didn't change (U.S.)
Way back in the Great Recession, elasticities didn’t change (U.S.) Economic disruption certainly affects consumers, but perhaps not in the ways we presumed Macro elasticities unchanged for both branded and private label items 8 © 2021 Nielsen Consumer LLC. All Rights Reserved.
Slide 9: Promotion multipliers also didn't change (U.S.)
Promotion multipliers also didn’t change (U.S.) TPRs, ads, and displays were not more effective in the Great Recession 9 © 2021 Nielsen Consumer LLC. All Rights Reserved.
Slide 10: In economic distress, consumers make strategic & broad shifts
In economic distress, consumers make strategic & broad shifts Price elasticities are not higher in economic Some consumers shift to private label hardship (Great Recession, covid) — consumers’ price sensitivity is manifested in different ways 19.34% 19.52% PL share data ending Q3 2019. PL share data
Slide 11: Anchoring ourselves in the consumer
Anchoring ourselves in the consumer Many more eating, drinking, and usage occasions Consumers changing shopping behavior (product type / price tier / size and store mission) to adapt Channel mix changing: Bigger stores and e-commerce growth But is response to price change increasing? 11 © 2021 Niels
Slide 12: Myth #1: Price elasticities are increasing
Myth #1: Myth #1: Price Consumers areelasticities are increasing, becoming moreas many are struggling price sensitive, as economically many are struggling economically 12 © 2021 Nielsen Consumer LLC. All Rights Reserved.
Slide 13: Average/macro elasticities are comparable (or lower) in pre-covid and new stable periods
Average/macro elasticities are comparable (or lower) in pre-covid and “new stable” periods This pattern is consistent across ~20 countries in six continents Regular price elasticity However, at the PPG level, there is a fair amount of variation (with countries showing ~30% of items changing apprecia
Slide 14: Significant elasticity differences from pre-COVID make sense
Signiﬁcant elasticity differences from pre-COVID “make sense”--leverage corresponding needs Difference Implication/Reason Hardship increases sensitivity Lower discounting lowers sensitivity Cleaning quality critical (safety) Yogurt: versatility/health are important Food staples (“must haves”) Pet fo
Slide 15: It's a myth: Covid has generally increased price elasticities
It’s a myth: Covid has generally increased price elasticities Reasons everyday Price elasticities Price elasticity not equal elasticities could be lower metrics sensible to price sensitivity ■ Other attributes more important Consumers make strategic & lifestyle Different reactions based on issues of
Slide 16: Myth #2: Price comparisons are more important now
Myth #1: Myth #2: Price Consumers are comparisons becoming more are more important now,as price sensitive, in the new manystable are period struggling economically 16 © 2021 Nielsen Consumer LLC. All Rights Reserved.
Slide 17: Consumers are largely driven by the own price of the product (Western Europe)
Consumers are largely driven by the own price of the product (Western Europe) “Own” used if all products change together; gaps used if competition changes price and you don’t Own & gap elasticities in pre-covid period Own & gap elasticities in new stable period Source: Nielsen Pricing Models. France
Slide 18: No evidence that price comparisons are more prevalent (LatAm)
No evidence that price comparisons are more prevalent (LatAm) Own & gap elasticities in pre-covid period Own & gap elasticities in new stable period P.P. var composition vs pre-covid % of own +6pp +4pp +2pp -3pp -2pp elasticity Source: Scanning information from Every Day Analytics 2019 & 2020 in Mex
Slide 19: No evidence that gap contributions are higher now in US
No evidence that gap contributions are higher now in US “Own” used if all products change together; gaps used if competition changes price and you don’t % Elasticity from: Note; Pre-COVID is 2 years ending 2/15/20 and Post Stable is 5/15/20-12/1/20. 200+ categories © 2021 Nielsen Consumer LLC. All R
Slide 20: There is economic polarization of shoppers
There is economic “polarization” of shoppers Existing constrained Newly constrained Cautious insulated Unrestricted insulated ▲ private label should provide ▲ shop across multiple off- and ▲ willing to pay more for ▲ willing to pay more for as good / better value than online retailers to get the bes
Slide 21: It's a myth: Covid has driven consumers to make more price comparisons
It’s a myth: Covid has driven consumers to make more price comparisons Convenience is a Consumer Examine the ubiquitous need differences matter fundamentals Convenience overarching need Constrained new consumers are a What trade-offs do consumers (consumers “satisﬁce” not “optimize”) wild card make?
Slide 22: Myth #3: Discounts will drive a higher promotion response
Myth #1: Myth #3: Discounts Consumers are will drive a higher becoming promotion more response, as consumers price sensitive, as seek manyto save more are struggling economically 22 © 2021 Nielsen Consumer LLC. All Rights Reserved.
Slide 23: No evidence that promoted elasticities increased in the US
No evidence that promoted elasticities increased in the US Promoted elasticity is 5% lower in new stable period © 2021 Nielsen Consumer LLC. All Rights Reserved.
Slide 24: Promotional elasticities are essentially unchanged (Western Europe)
Promotional elasticities are essentially unchanged (Western Europe) Comparing promotional elasticities in pre-covid vs. new stable Price elasticities “pre-covid” versus Promoted price “new stable” remain high - - - Source: Nielsen Pricing Models. France: Enseignes HMSMUK: Total Coverage/Grocery Mult
Slide 25: Promotional elasticities are essentially unchanged (Asia Pacific, Eastern Europe)
Promotional elasticities are essentially unchanged (Asia Paciﬁc, Eastern Europe) Comparing promotional elasticities in pre-covid vs. new stable Price elasticities “pre-covid” versus “new stable” remain high - - - Source: Nielsen Pricing Models. France: Enseignes HMSMUK: Total Coverage/Grocery Multip
Slide 26: Promoted price elasticities decreased for all examined categories (Canada)
Promoted price elasticities decreased for all examined categories (Canada) Cross category comparison of pre-covid and new stable elasticities Higher new stable elasticities Lower regular, higher Higher regular & promo Promoted price elasticity index promo price sensitivity price sensitivity Each dat
Slide 27: It's a myth to believe covid has increased promotion lifts
It’s a myth to believe covid has increased promotion lifts Reasons why lower promo elasticities Resetting the pick Leverage new need States ■ Discount level Lower promotion effectiveness. . . but ■ Stock-up: Trips are more plentiful; lower cost and possibly more brand retailers need to win these now
Slide 28: What's next: How should the marketplace evolve?
Myth #1: Consumers What’s next:are How should becoming the more evolve? marketplace price sensitive, as many are struggling economically 28 © 2021 Nielsen Consumer LLC. All Rights Reserved.
Slide 29: Some elasticities are down... but do you have pricing power?
Some elasticities are down. . . but do you have pricing power? What to do going forward: Quantify risk & Mitigate Manage the opportunity Justify increase Examine context vulnerabilities message First quantify risk and “Justify” price increase Does the context Mitigate Any indications of opportunity
Slide 30: Where are the opportunities ahead?
Where are the opportunities ahead? Understand other drivers of Measure consumer ﬁt with Reset promotion strategies margin enhancement your products Increase volume from “upstream” Higher pricing power for products Leverage current attributes categories and protect against over-index among insulated

NielsenIQ — Conference Presentation (April 2021) on 6ix

Niq Global Intelligence — NielsenIQ — Conference Presentation (April 2021)

Slide 1: Busting myths about price & promotions during the pandemic

Slide 2: Agenda

Slide 3: Global landscape: Changing consumer and market dynamics

Slide 4: There are fewer trips but larger baskets (LatAm)

Slide 5: After lockdown, % of sales sold via promotion dropped dramatically (Canada)

Slide 6: Large size products are more frequently purchased (LatAm)

Slide 7: Online purchases have skyrocketed (U.S.)

Slide 8: Way back in the Great Recession, elasticities didn't change (U.S.)

Slide 9: Promotion multipliers also didn't change (U.S.)

Slide 10: In economic distress, consumers make strategic & broad shifts

Slide 11: Anchoring ourselves in the consumer

Slide 12: Myth #1: Price elasticities are increasing

Slide 13: Average/macro elasticities are comparable (or lower) in pre-covid and new stable periods

Slide 14: Significant elasticity differences from pre-COVID make sense

Slide 15: It's a myth: Covid has generally increased price elasticities

Slide 16: Myth #2: Price comparisons are more important now

Slide 17: Consumers are largely driven by the own price of the product (Western Europe)

Slide 18: No evidence that price comparisons are more prevalent (LatAm)

Slide 19: No evidence that gap contributions are higher now in US

Slide 20: There is economic polarization of shoppers

Slide 21: It's a myth: Covid has driven consumers to make more price comparisons

Slide 22: Myth #3: Discounts will drive a higher promotion response

Slide 23: No evidence that promoted elasticities increased in the US

Slide 24: Promotional elasticities are essentially unchanged (Western Europe)

Slide 25: Promotional elasticities are essentially unchanged (Asia Pacific, Eastern Europe)

Slide 26: Promoted price elasticities decreased for all examined categories (Canada)

Slide 27: It's a myth to believe covid has increased promotion lifts

Slide 28: What's next: How should the marketplace evolve?

Slide 29: Some elasticities are down... but do you have pricing power?

Slide 30: Where are the opportunities ahead?

Slide 31: Thank you.