Slide 1: Spring Press Conference February 23, 2006
Spring Press Conference February 23, 2006 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: Key Figures
Key Figures % Change 2004/2005 % of Sales • Sales CHF 91 075 m + 7.5% • EBITA CHF 11 720 m + 8.9% 12.9% • Net Profit CHF 7 995 m + 20.7% 8.8% 3 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 4: Total Sales and Real Internal Growth from 1995 to 2005
Total Sales and Real Internal Growth from 1995 to 2005 CHF mio RIG 100'000 5.0% 90'000 4.5% 80'000 4.0% 70'000 3.5% 60'000 3.0% 50'000 2.5% 40'000 2.0% 30'000 1.5% 20'000 1.0% 10'000 0.5% 0 0.0% Not restated 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 4 SPRING PRESS CONFERENCE 2006 Name of cha
Slide 5: Group EBITA Margin over last years
Group EBITA Margin over last 10 years Nestlé Group EBITA and EBITA Margin from 1996 to 2005 EBITA (mio CHF) % of Sales 14'000 13.5% 13'000 12.9% 12.6% 13.0% 12'000 12.5% 12.3% 11'000 12.5% 11.8% 11.8% 10'000 12.0% 9'000 11.1% mio CHF 8'000 11.5% 7'000 6'000 11.0% 5'000 10.3% 10.3% 10.2% 10.5% 4'000
Slide 6: The Four Factors of Group Sales 1996-2005
The Four Factors of Group Sales 1996-2005 % Growth 10 years average 15% 10% 1.0% 5% 2.3% OG 3.4% 5.7% 0% -1.4% -5% OG: Organic Growth -10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 RIG Pricing & Other Acquisitions/Divestitures FX Impact Not restated; in 2001: including TTS effect 6 SPRING PR
Slide 7: The Nestlé Model
The Nestlé Model 1. Long-Term Organic Growth Target 5 - 6 %, EBITA Margin 2. Continued year after year improvement of EBITA margin, 3. Capital efficiency / Business ROIC 1998 2000 2002 2004 2006 2008 2010 = Resulting in an industry outperforming, long-term total shareholders return. 7 SPRING PRESS C
Slide 8: Food Market Growth and Nestlé Sales
Food Market Growth and Nestlé Sales Manufacturing value-added Indices in food consumption actual US$, per capita Nestlé per capita sales Convenience Nutrition WellBeing Pleasure and Sustenance diversity Health and Wellness Per-capita income (PPP) US$ 4,000 US$ 13,000 US$ 22,000 US$ 28,000 Sources: U
Slide 9: World Population by Income Groups
World Population by Income Groups 1995 – 2005 - 2015 7'000 > 28'000 People, mn + 369 863 + 199 494 277 6'000 235 438 22'000-28'000 295 522 175 + 133 PPP$ 5'000 389 940 + 885 1825 710 + 230 13'000-22'000 4'000 PPP$ 3'000 2153 + 448 5'000-13'000 2601 2354 PPP$ 2'000 1500-5000 PPP$ 1'000 1970 1653 1429
Slide 10: GLOBE Program Status
GLOBE Program Status More than 1 3 of Nestlé’s food and beverage sales: • over 75,000 users of the system • over 300 factories • over 300 distribution centers • over 200 sales offices 10 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 11: Spring Press Conference
Spring Press Conference Paul Polman Name of chairman
Slide 12: Restatement of 2004 Results
Restatement of 2004 Results 2004 results have been restated following the first application of IFRS 2 share-based payment and the discontinued operation resulting from the announcement in December 2005 for the chilled dairy activities in Europe, where applicable. 2005 Full Year RIG & Organic Growth
Slide 13: 2005: Delivering the Nestlé Model: Improvement in Key Performance Measures
2005: Delivering the Nestlé Model: Improvement in Key Performance Measures Strong organic growth both F&B and Pharma: 6.2% EBITA margin up 20bps to 12.9%; up 1 Billion CHF Improvement in Return on invested capital: +50bps Underlying EPS up 12.9%; dividend 9 CHF up 12.5% Strong cash flow -
Slide 14: Zones: Organic Growth – Broad Based Improvement
Zones: Organic Growth – Broad Based Improvement 12% 11.6 10.4 10 8.6 8 7.7 7.8 6.9 6.6 6.2 6 4.5 4 2 2.0 0.6 0 -0.4 -2 04 05 04 05 04 05 04 05 04 05 04 05 2005 sales America Europe AOA Water Other activities Group CHFbn 30.8 27.6 15.7 8.8 8.2 91.1 14 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 15: Product Groups: Organic Growth Above 5-6% Target
Product Groups: Organic Growth Above 5-6% Target 12% 10.4 10.2 10 8.2 8 6.7 6.2 6.2 6 5.4 5.2 4.4 4.5 4 3.5 3.2 2.5 2.6 2 0 04 05 04 05 04 05 04 05 04 05 04 05 04 05 Beverages Milk products, Prepared Chocolate, PetCare Pharma Group Nutrition and dishes and confectionery 2005 Ice cream cooking aids a
Slide 16: P&L to EBITA: Savings Compensate Cost Pressures
P&L to EBITA: Savings Compensate Cost Pressures FY 2004 FY 2005 Diff. basis points As % of sales Restated (rounded) Sales (CHF million) 84'690 91'075 100 100 Cost of goods sold (41.7) (41.7) - Distribution (8.1) (8.1) - Marketing & Admin (35.8) (35.7) 10 R&D (1.7) (1.6) 10 EBITA 12.7 12.9 20 2004 re
Slide 17: P&L: EBITDA to Net Profit
P&L: EBITDA to Net Profit FY 2004 FY 2005 Diff. basis points As % of sales Restated (rounded) EBITDA 16.0 15.9 EBITA 12.7 12.9 20 Net other income/expenses (0.8) (1.0) (20) Amortisation of goodwill (1.9) 0 190 Net financing cost (0.8) (0.6) 20 Taxes (2.8) (2.9) (10) Discontinued operations 0.0 0.0 0
Slide 18: Cash Flow and Financial Position Remain Strong
Cash Flow and Financial Position Remain Strong Operating and free cash flow decline slightly due to CHF600 million cash injection to pension funds Cash conversion cycle unchanged at 47 days Capital expenditure down 10bps as % of sales Net debt declines from CHF10.2 bn to CHF9.6 bn Proposed
Slide 19: Actively Managed Capital Structure Benefits Shareholders: Cash Returns
Actively Managed Capital Structure Benefits Shareholders: Cash Returns CHF 7.0 Share buy back bn 10.2 Net d 6.2 ebt 6.0 Dividend 9.6 5.0 2.6 4.5 +39% 4.0 +59% 1.4 3.0 2.8 2.0 3.1 3.6 1.0 0 2004 2005 2006* * 2006 assumes completion of 2nd buy-back programme and payment of proposed CHF 9 dividend 19 S
Slide 20: Spring Press Conference
Spring Press Conference Paul Polman Name of chairman
Slide 21: Dividend Evolution 1995 – 2005
Dividend Evolution 1995 – 2005 9.00 9.00 8.00 8.00 7.00 7.20 7.00 in CHF 6.00 6.40 5.00 5.50 4.00 4.30 3.80 3.00 3.50 3.00 2.00 2.65 1.00 0.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Figures adjusted to number of shares 21 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 22: Dividend Payments 1995 - 2005
Dividend Payments 1995 - 2005 3500 in millions of CHF 3000 3114 2500 2705 2800 2484 2000 2127 CHF 1500 1657 1469 1376 1000 1180 1040 1043 500 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 22 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 23: Nestlé Corporate Social Responsibility
Nestlé Corporate Social Responsibility 23 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 24: Latin America
Latin America 24 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 25: Nestlé Corporate Governance
Nestlé Corporate Governance 25 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 26: Share Capital by Investor Type 1994 - 2005
Share Capital by Investor Type 1994 - 2005 100% 33 34.7 32.6 31.1 80% 44 56.2 56.8 54.7 53.3 54.3 52.7 48.4 60% 40% 67 65.3 67.4 68.9 51.6 56 43.8 43.2 45.3 46.7 45.7 47.3 20% 0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Institutionals Private Shareholders 26 SPRING PRESS CONFERENC
Slide 27: Distribution of Share Capital by Nationality since 1992
Distribution of Share Capital by Nationality since 1992 60 50 40 30 20 10 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Switzerland USA France UK Germany 27 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 28: Spring Press Conference
Spring Press Conference Name of chairman
Slide 29: Chilled Dairy Brands
Chilled Dairy Brands 29 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 30: How the Food Service Industry Operates
How the Food Service Industry Operates 30 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 31: Why Food Service is Attractive
Why Food Service is Attractive Estimated global Sales • Big and growing business opportunity (CHF bio. 2004) 6.5 • Relevant manufacturer market CHF 600 billion 4.0 3.7 3.7 • Consumer trends drive growth 1.9 Total = 19.8 • Customer consolidation 31 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 32: CPW Volume Growth Since 1991
CPW Volume Growth Since 1991 +4% 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 32 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 33: Record Cereal Share
Record Cereal Share* 22.4% 20% 15% 10% 5% 0% 92 93 94 95 96 97 98 99 00 01 02 03 04 05 Excluding Sweden, Australia and New Zealand * 33 SPRING PRESS CONFERENCE 2006 Name of chairman
Slide 34: Next Media Events
Next Media Events 6 April 2006 – Annual General Meeting 25 April 2006 – First Quarter Sales 19 October 2006 – Autumn Press Conference Name of chairman