Nestle S.a. · SIX:NESN
Nestle — Merger or Acquisition (December 2006)
20 slides from Nestle's merger presentation, Dec 14, 2006
Slide 1: An exciting combination in a high growth, high margin Nutrition category
An exciting combination in a high growth, high margin Nutrition category 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 – Health, Nutrition and Wellness Vision
Nestlé – Health, Nutrition and Wellness Vision "We want to grow from the respected and trustworthy food company that we are known as now, into a respected and trustworthy food, nutrition and wellness company" Peter Brabeck-Letmathe October 2001 3 Vevey, December 14, 2006 Name of chairman
Slide 4: Nestlé – Health, Nutrition and Wellness Approach
Nestlé – Health, Nutrition and Wellness Approach Drive the Nutrition, Health & Strengthen our leadership Wellness orientation across position in the core nutrition the Company business Corporate Wellness Unit Nestlé Nutrition Company 4 Vevey, December 14, 2006 Name of chairman
Slide 5: Nutrition Today and Objectives
Nestlé Nutrition Today and Objectives Infant Weight Nutrition Management HealthCare Performance Nutrition Nutrition 2005 Objectives Sales CHF 5.2 Bio ( $4.2 Bio) Organic Growth 5.5% CAGR 2000 to 2005 10% EBIT margin 17.6% 20% 5 Vevey, December 14, 2006 Name of chairman
Slide 6: Nestlé Nutrition – Category Breakdown 2005
Nestlé Nutrition – Category Breakdown 2005 Sales by categories Acquired 2006 48% 8% Infant Formula Performance Nutrition HealthCare Nutrition 9% Baby Food 35% 6 Vevey, December 14, 2006 Name of chairman
Slide 7: HealthCare Nutrition
Nestlé HealthCare Nutrition • In developing our specialized Healthcare Nutrition portfolio, our aim is to help people with nutritional deficiencies or disease states to improve their overall health and well-being • Offering medically recognised solutions • to consumers, caregivers and healthcare pro
Slide 8: HealthCare Nutrition Category Characteristics
HealthCare Nutrition Category Characteristics • Complete nutritional solutions for people with specific illnesses, WHAT disease states, or the special challenges of different life phases • $10 bio total category size • Enteral (ECN) – Medical nutrition delivered orally or by tube feeding for digesti
Slide 9: Category Attractiveness
Category Attractiveness SIZE • Approximately $10 Bio global category, including ECN and TPN • Global ECN growth projected at 7%, driven by: • Aging populations and longer life spans • Recognition of the positive and cost effective role of nutrition in patient’s care in an environment of escalating h
Slide 10: Key Category Success Factors
Key Category Success Factors • Strong R&D - Continuous pipeline of scientifically developed products that target specific conditions - Clinical trial management - Regulatory capabilities • Specialised HealthCare Marketing Capabilities - Healthcare economic data - Superior consumer / patient understa
Slide 11: HealthCare Nutrition Players
HealthCare Nutrition Players Health Care Nutrition (Enteral only) Abbott Abbott Archduke 30% Novartis NovartisMN MN Nobleman 18% Nestl é Nestlé King SA 7% Numico Queen 16% 16% Fresenius Friar 8% Bristol Myers Bishop 3% Other Other 18% Other -5% 5% 15% 25% 35% Source: Nestlé 11 Vevey, December 14, 20
Slide 12: Nestlé HealthCare Nutrition (HCN) Today
Nestlé HealthCare Nutrition (HCN) Today Overview Financial Performance • Nestlé HCN launched in 1998 2005 • Still in investment phase Sales $415 Mio • Margins below Nutrition Division average Organic 3 yr CAGR 8% • To benefit from stand alone management within global Nestlé Nutrition structure Stren
Slide 13: Novartis Medical Nutrition (MN)
Novartis Medical Nutrition (MN) Overview Key Brands • Part of Novartis’ Consumer Health Division with sales of USD 951 million • Longstanding player, since 1972, built organically Boost ReSource Optifast and through acquisitions • Broad portfolio of recognized brands – Complete range of nutritional
Slide 14: A Winning Combination
A Winning Combination 1. Creates #2 global player in Healthcare Nutrition • Strengthens our position in the U.S. and Europe • Creates a stronger foothold in Rest of World • Larger organization, broader product range, faster speed to market • Strong and experienced management team 2. Increased R&D ca
Slide 15: Enhanced R&D Profile
Enhanced R&D Profile • Nutrition science • Pharma heritage • Food technology excellence • Health economics data (taste, texture, sensory) • Regulatory competences • Consumer-centric approach • Clinical trial design • Access to Key Opinion Leaders Pipeline Complementary competencies will result in be
Slide 16: Financial Objectives – Achieve growth and profitability characteristics of the segment
Financial Objectives – Achieve growth and profitability characteristics of the segment Profitability Opportunities Impact • Manufacturing and Supply Chain • Marketing and Sales • General and Administrative • Leverage Nestlé-in-the-market core Year three cost savings are capabilities / shared service
Slide 17: Transaction Highlights
Transaction Highlights RECENT NUTRITION & CONSUMER TRANSACTIONS REVENUE MULTIPLES Purchase Price $2.5 bn 4.3x 3.0x Average excl. MN 3.4x 2.6x 1.4x Key Valuation Metrics Numico / Asahi / J&J / PCH MN EAC Wakodo 2006E EBITDA MULTIPLES Sales Multiple 2.6x 25.0x (b) 23.0x 23.3x Average excl. MN 22.0x EB
Slide 18: Acquisition Strategy
Nestlé Acquisition Strategy • To be category No.1 or strong No.2 • Generate value for shareholders • Focused approach on value-added growth categories • Strong brands in leadership positions • RIG, cash flow and earnings enhancing • High degree of certainty of successful integration • Maintain stron
Slide 19: Conclusion
Conclusion A winning combination – Number 2 globally in an attractive category Good strategic fit and complementarity of businesses Well positioned to deliver a performance in line with category characteristics and contribute significantly to Nestlé Nutrition targets A compelling strategic and finan
Slide 20: An exciting combination in a high growth, high margin Nutrition category
An exciting combination in a high growth, high margin Nutrition category Name of chairman