Slide 1: Nestlé Full Year Results Roadshow 2007
Full Nestlé FullYear Results Year Results Roadshow 2007 2007 full year results roadshow – February 2008 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: 2007 Highlights – all metrics improve
2007 Highlights – all metrics improve Delivering the Nestlé Model Improvements FY 07 v 06 FY 07 Total Sales – total + 9.2 % + CHF 9.1 bn CHF 107.6 bn Organic growth + 7.4 % EBIT + 12.9 % + CHF 1.7 bn CHF 15.0 bn EBIT margin + 50 bps 14.0 % Net profit + 15.8 % + CHF 1.4 bn CHF 10.6 bn Net profit marg
Slide 4: Food and Beverages: All metrics improve
Food and Beverages All metrics improve CHF 100.3 bn 7.1 % CHF 12.6 bn 12.6 % 4.0 % 2007 Strong + 9.2% on-going + 12.7 % + 40 bps growth CHF 91.8 bn 5.9 % CHF 11.2 bn 12.2 % 4.2 % 2006 Sales RIG OG EBIT EBIT margin 4 2007 full year results roadshow – February 2008
Slide 5: Total Performance Management
Total Performance Management Growth & Value of Growth Channel Development Scale Benefits Region Development Operational Efficiencies Skills & Competences Delivering long term sustainable performance improvement 5 2007 full year results roadshow – February 2008
Slide 6: The Nestlé Model
The Nestlé Model 7.4% 6.9% 6.4% 6.2% 6.2% 5.4% 5.1% 5.2% 4.9% 5.1% 14.0% 4.5% 13.5% 12.9% 3.8% 12.5% 12.6% 12.3% 11.8% 11.8% 11.1% 10.2% 10.3% 10.3% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 % Organic Growth EBIT margin EBIT margins correspond to published figures – not restated fo
Slide 7: Growth in emerging & developed markets
Growth in emerging & developed markets Emerging markets are ~30% of Nestlé F&B sales % OG 14.0 12.0 10.0 Total Food & Bev 8.0 Developed 6.0 Emerging 4.0 Total 2.0 0.0 2006 2007 7 2007 full year results roadshow – February 2008
Slide 8: Transforming product portfolio towards healthier nutrition is also driving growth
Transforming product portfolio towards healthier nutrition is also driving growth Sales CAGR Optimising Nutrition: 2004-2007 • Adding/enhancing BAB – 2005 – 2007: Whole Grains: 700 million additional servings in Europe +23.7% Nutrition – Health benefits: BABs BAB enhanced F&B – Micronutrients: vitam
Slide 9: The Nestlé Investment Proposition
The Nestlé Investment Proposition “The Nestlé Model” 1. Long-Term Organic Growth Target 5 - 6% Sales 2. Continued year after year improvement of EBIT margin EBIT 3. Improving Capital efficiency / Business ROIC / Cash returns to shareholders Resulting in an industry outperforming, long-term total sha
Slide 10: Focus areas
Focus areas • Discipline driving performance • Operational control • Leveraging scale and skills • Strategy and performance 10 2007 full year results roadshow – February 2008
Slide 11: Discipline driving performance
Discipline driving performance • Discipline, increased transparency and excellence in execution are material influences on the 2007 results • Underperformers improved overall, especially Ice Cream, European PetCare: 10 bps contribution to Group EBIT margin • Working capital improved by 10bps despite
Slide 12: Discipline driving performance
Discipline driving performance • 10% reduction in SKUs in 2007 • 10% improvement in bad goods • Simplifying structures (200 fewer legal entities) • CHF700mn excess real estate disposed over 3 years Focus areas for 2008 include • Leverage scale & skills - overheads • Reduced working capital as % of s
Slide 13: Leveraging scale
Leveraging scale Strategic Business Units Global Media Buying Strategic Generating Demand Unit Supply Chain Optimisation Team European Purchasing Industrial Performance Team Innovation Acceleration Team Regional Treasury Centres Global Nestlé Business Services Global Business Excellence Team Enabled
Slide 14: GNBS contributing to profitable growth
GNBS contributing to profitable growth Stage Get-in Standardize & Streamline Expand § Transition "as-is" § One global best- activities to NBS in-class end-to- Focus end solution § New Markets § Full accountability § New Services for service delivery § Optimized retained with NBS organizations Outcom
Slide 15: Update on GLOBE
Update on GLOBE • GLOBE Objectives changed from: To: • Implementation of harmonized Nestlé Business Excellence • Move from "Best in Nestlé" to Best Practice "Best in Class" best practices confirmed with external benchmarking • Implementation of Data Standards and Data Management – "Managing Data as
Slide 16: Operational control
Operational control • Balance sheet optimisation within "Gold Standard" parameters – minimise cost of capital • Controls - oversight of Nestlé markets Devolved responsibility balanced by controls • Guardian of shareholders' interests – Use of funds, returns hurdles, risk policies, etc • GLOBE brings
Slide 17: The role of Finance
The role of Finance • Finance is central to value creation by identifying opportunities for performance improvement • Finance is central to value protection through controls, systems, governance • Focus on maximising long term total shareholder return 17 2007 full year results roadshow – February 20
Slide 18: Differentiating strategies
Differentiating strategies Differentiating Strategies Responsibility, Leadership Benchmark & Fix Performance to get Results objectives Management Cycle Measure & Track Focus & Implement 18 2007 full year results roadshow – February 2008
Slide 19: Nestlé Full Year Results Roadshow 2007
Full Nestlé FullYear Results Year Results Roadshow 2007 2007 full year results roadshow – February 2008 Name of chairman