Nestle S.a. · SIX:NESN

Nestle — FY2011 Earnings Presentation

71 slides from Nestle's earnings presentation, Feb 21, 2012

  1. Slide 1: 2011 Full Year Roadshow

    2011 Full Year Roadshow Paul Bulcke Chief Executive Officer Jim Singh Chief Financial Officer Wan Ling Martello Chief Financial Officer Designate February 21st, 2012 2011 Full Year Roadshow

  2. 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.

  3. Slide 3: 2011 Full Year Roadshow - Jim Singh, CFO

    2011 Full Year Roadshow Jim Singh Chief Financial Officer February 21st, 2012 2011 Full Year Roadshow

  4. Slide 4: Delivering progress sustainably in a New Reality

    Delivering progress sustainably in a New Reality 3 February 21st, 2012 2011 Full Year Results Roadshow

  5. Slide 5: 2011: Strong Full Year Performance

    2011: Strong Full Year Performance At constant As reported exchange rates Sales 83.6 bn Organic Growth +7.5% Real Internal Growth +3.9% Trading Operating Profit 12.5 bn Trading Operating Profit Margin 15.0% +60 bps +90 bps (vs. 2010 continuing operations) Net Profit 9.5 bn +8.1% (vs. 2010 continuing

  6. Slide 6: Delivering the Nestlé Model in 2011

    Delivering the Nestlé Model in 2011 Former Nestlé Model FY 2011 Enhanced Nestlé Model FY 2011 Organic growth 5-6% +7.5% Organic growth 5-6% +7.5% Increased EBIT margin +10 bps Increased trading operating +90 bps in constant currencies margin in constant currencies Increased underlying EPS +7.8% Impr

  7. Slide 7: 10 years of the Nestlé Model

    10 years of the Nestlé Model Driving Organic Growth & EBIT Margin Improvement 15.0% 14.3% 14.6% 14.0% 13.5% 14.4% 12.9% 12.5% 12.6% 12.3% 11.8% 10-year annual averages 9.7% Organic Growth 6.4% 8.3% 7.4% 7.5% Real Internal Growth 3.6% 6.2% 6.2% 6.2% 4.9% 5.1% 4.5% 4.1% Organic Growth EBIT margin * TO

  8. Slide 8: Enhancing performance – EPS and DPS evolution

    Enhancing performance – EPS and DPS evolution 3.32 3.09 3.08 2.80 2.82 2.41 2.13 2.02 1.89 1.93 1.95 Proposed 1.85 1.72 EPS* 1.60 DPS 1.40 1.22 1.04 0.90 0.80 0.70 0.72 0.64 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 * Underlying EPS, excl. 2001 which is Basic EPS All figures in CHF 7 Fe

  9. Slide 9: A winning strategy driving superior shareholder returns

    A winning strategy driving superior shareholder returns Nestlé SA Total Shareholder Returns 2002-2011 96.1% CHF, dividends reinvested 52.6% 43.2% 29.6% 17.7% 20.7% 14.4% 8.3% -18.1% -15.2% USA 7 USA 6 USA 5 USA 4 USA 3 USA 2 USA 1 EUR 3 EUR 2 Source: Bloomberg 8 February 21st, 2012 2011 Full Year Re

  10. Slide 10: Growth opportunities – Nutrition, Health and Wellness as per-capita income rises

    Growth opportunities – consumers increasingly focusing on Nutrition, Health and Wellness as per-capita income rises ‘Aggressive’localcompetitorswithgrowing anddominantposition(lowprice/lowmargin) ‘Premiumisation’ Battlegroundforgrowth intheemergingmarkets Consumption of food manufacturing value- add

  11. Slide 11: The transformational opportunity

    The transformational opportunity WHAT HOW Strategic Organisational Transformation Transformation Create an agile fleet of From traditional businesses/markets businesses into a Nutrition, Focus on demand generation Health and Wellness Leverage scale through an efficient company support structure Tack

  12. Slide 12: Significant acquisitions added new growth platforms and strengthened market leadership

    Significant acquisitions added new growth platforms and strengthened market leadership Acquisitions 2000 to 2011: Sales in CHF ~30 bn •Ruzanna RU •Garoto Brazil •Osem Israel •Fonterra milk Medical powder AMS •Powwow EUR Nutrition •BPW •Ice cream Partners NA •HOD Waters USA 2000 2001 2002 2003 2004 2

  13. Slide 13: Significant divestitures rationalized the portfolio

    Significant divestitures rationalized the portfolio and eliminated non strategic and loss-making businesses Divestitures 2000 to 2011: Sales in CHF ~ -17 bn 23% 25% 52% •San Sepolcro Italy •Eden Springs Water FR •Frozen Meat GER •Barnaul Conf RU •Family Frost •Canned & Liquid •Trinks GER Milk AOA •E

  14. Slide 14: Nestlé Innovation Territory: expanding to new dimensions

    Nestlé Innovation Territory: expanding to new dimensions Customized Customized Personalized Products Solutions Product-linked systems & services Standard Product Systems Services 13 February 21st, 2012 2011 Full Year Results Roadshow

  15. Slide 15: Capital expenditure driven by emerging markets, powdered beverages, nutrition

    Capital expenditure driven by emerging markets, powdered beverages, nutrition and investments in capacity and new products & technology Split by Region Split by Product Category Others PetCare Confectionery Developed 4% 10% Culinary 11% Emerging Nutrition Dairy / Ice cream 49% 52% Water 27% 22% 25%

  16. Slide 16: Trade Net Working Capital is an area of focus and improvement

    Trade Net Working Capital is an area of focus and improvement 2005 2006 2007 2008 2009 2010 2011 TNWC as % of sales Notes: Like for like estimate 2010 and 2011 figures exclude Alcon, Hsu Fu Chi and Yinlu 15 February 21st, 2012 2011 Full Year Results Roadshow

  17. Slide 17: Nestlé's Operational Efficiency

    Nestlé’s Operational Efficiency Delivering the highest quality, lowest cost & best customer service leveraging GLOBE Performance • Manufacturing • Manufacturing • Physical Logistics • Physical Logistics • Bad Goods • Bad Goods • MOGE • MOGE • PFME • Capital Charges • Manufacturing • Financing Costs

  18. Slide 18: The Nestlé Model

    The Nestlé Model „ Organic growth 5-6% „ Increased trading operating margin in constant currencies „ Increased underlying EPS in constant currencies „ Improvement in capital efficiency 17 February 21st, 2012 2011 Full Year Results Roadshow

  19. Slide 19: 2011 Full Year Roadshow - Paul Bulcke, CEO

    2011 Full Year Roadshow PaulBulcke Chief Executive Officer February 21st, 2012 2011 Full Year Roadshow

  20. Slide 20: The New Reality

    The New Reality 19 February 21st, 2012 2011 Full Year Results Roadshow

  21. Slide 21: Deliver shorter term

    Deliver shorter term Uncertainty and volatility Different dynamics in different markets To win: „ Fast moving „ Entrepreneurial „ Decentralised 20 February 21st, 2012 2011 Full Year Results Roadshow

  22. Slide 22: Deliver shorter term, manage for longer term

    Deliver shorter term Manage for longer term Uncertainty and volatility Growing populations, global affluence Different dynamics in different markets increasing, health awareness, etc To win: To win: „ Fast moving „ Build and innovate brands „ Entrepreneurial „ Enhance capacities and capabilities „ D

  23. Slide 23: Deliver shorter term, manage for longer term

    Deliver shorter term Manage for longer term Uncertainty and volatility Growing populations, global affluence Different dynamics in different markets increasing, health awareness, etc To win: To win: „ Fast moving „ Build and innovate brands „ Entrepreneurial „ Enhance capacities and capabilities „ D

  24. Slide 24: The Nestlé Roadmap

    Deliver shorter term Manage for longer term Uncertainty and volatility Growing populations, global affluence Different dynamics in different markets increasing, health awareness, etc To win: To win: „ Fast moving „ Build and innovate brands „ Entrepreneurial „ Enhance capacities and capabilities „ D

  25. Slide 25: The Nestlé Roadmap

    The Nestlé Roadmap Competitive Advantages Appropriate to the New Reality Driving Sustainable Performance Operational Growth Pillars Drivers 24 February 21st, 2012 2011 Full Year Results Roadshow

  26. Slide 26: The Nestlé Roadmap

    The Nestlé Roadmap Competitive Advantages Addressing changing consumer behaviour – perceived values, expectations and impulses Operational Growth Pillars Drivers 25 February 21st, 2012 2011 Full Year Results Roadshow

  27. Slide 27: It's all about Engaging with Consumers

    It’s all about Engaging with Consumers 26 February 21st, 2012 2011 Full Year Results Roadshow

  28. Slide 28: Driving Innovation Globally: NESCAFÉ

    Driving Innovation Globally: NESCAFÉ Countries Countries Year I&R NHW Premium PPP OOH Zones Î 2011 Î 2012 Dolce Gusto ‘06 9 3 56 3 Gold Blend ‘11 9 3 62 0 3-in-1 By Market every 2 yrs 9 3 70 3 Green Blend ‘09 9 9 2 29 5 RTD ’07** 9 2 24 1 Viaggi by Nescafé ’10 9 9 1 4 2 Milano ‘10 9 9 3 20 12 Alegri

  29. Slide 29: Driving Innovation Globally: NESCAFÉ

    Driving Innovation Globally: NESCAFÉ Countries Countries Year I&R NHW Premium PPP OOH Zones Î 2011 Î 2012 Dolce Gusto ‘06 9 3 56 3 Gold Blend ‘11 9 3 62 0 3-in-1 Byy Market very 2 yrs every 9 3 70 3 Green Blend ‘09 9 9 2 29 5 RTD ’07** 9 2 24 1 Viaggi by Nescafé ’10 9 9 1 4 2 Milano ‘10 9 9 3 20 12

  30. Slide 30: Driving Innovation Globally: NESCAFÉ

    Driving Innovation Globally: NESCAFÉ Countries Countries Year I&R NHW Premium PPP OOH Zones Î 2011 Î 2012 Dolce Gusto ‘06 9 3 56 3 Gold Blend ‘11 9 3 62 0 3-in-1 By Market every 2 yrs 9 3 70 3 Green Blend ‘09 9 9 2 29 5 RTD ’07** 9 2 24 1 Viaggi by Nescafé ’10 9 9 1 4 2 Milano ‘10 9 9 3 20 12 Alegri

  31. Slide 31: Driving Innovation Globally: NESCAFÉ

    Driving Innovation Globally: NESCAFÉ Countries Countries Year I&R NHW Premium PPP OOH Zones Î 2011 Î 2012 Dolce Gusto ‘06 9 3 56 3 Gold Blend ‘11 9 3 62 0 3-in-1 By Market every 2 yrs 9 3 70 3 Green Blend ‘09 9 9 2 29 5 RTD ’07** 9 2 24 1 Viaggi by Nescafé ’10 9 9 1 4 2 Milano ‘10 9 9 3 20 12 Alegri

  32. Slide 32: Driving Innovation Globally: NESCAFÉ

    Driving Innovation Globally: NESCAFÉ Countries C Countries Year I&R NHW Premium PPP PP OOH Zones Î 2011 Î 2012 Dolce Gusto ‘06 9 3 56 3 Gold Blend ‘11 9 3 62 0 3-in-1 By Market every 2 yrs 9 3 70 3 Green Blend ‘09 9 9 2 29 5 RTD ‘07** 9 2 24 1 Viaggi by Nescafé ‘10 9 9 1 4 2 Milano ‘10 9 9 3 20 12 A

  33. Slide 33: Innovation Aligned with Growth Drivers

    Innovation Aligned with Growth Drivers Countries Countries Category Year I&R NHW Premium PPP OOH Zones Î 2011 Î 2012 Ice Cream Peelable ‘10 9 9 3 12 25 Nespresso Lattissima + ‘11 9 9 3 30+ 20+ Nutrition L. reuteri ‘10 9 3 16 20 Food Crispy ‘11 9 3 10 14 Dairy Nido ’11 9 9 2 10 14 PetCare ONE Beyond

  34. Slide 34: Innovation Aligned with Growth Drivers

    Innovation Aligned with Growth Drivers Countries Countries Category Year I&R NHW Premium PPP OOH Zones Î 2011 Î 2012 Ice Cream Peelable ‘10 9 9 3 12 25 Nespresso Lattissima + ‘11 9 9 3 30+ 20+ Nutrition Lactogen ‘10 9 3 16 20 Food Crispy ‘11 9 3 10 14 Dairy Nido ’11 9 9 2 10 14 PetCare ONE Beyond ’1

  35. Slide 35: Innovation Aligned with Growth Drivers

    Innovation Aligned with Growth Drivers Countries Countries Category Year I&R NHW Premium PPP OOH Zones Î 2011 Î 2012 Ice Cream Peelable ‘10 9 9 3 12 25 Nespresso Lattissima + ‘11 9 9 3 30+ 20+ Nutrition Lactogen ‘10 9 3 16 20 Food Crispy ‘11 9 3 10 14 Dairy Nido ’11 9 9 2 10 14 PetCare ONE Beyond ’1

  36. Slide 36: Innovation Aligned with Growth Drivers

    Innovation Aligned with Growth Drivers Countries Countries Category Year I&R NHW Premium PPP OOH Zones Î 2011 Î 2012 Ice Cream Peelable ‘10 9 9 3 12 25 Nespresso Lattissima + ‘11 9 9 3 30+ 20+ Nutrition Lactogen ‘10 9 3 16 20 Food Crispy ‘11 9 3 10 14 Dairy Nido ’11 9 9 2 10 14 PetCare ONE Beyond ’1

  37. Slide 37: It's all about Engaging with Consumers

    It’s all about Engaging with Consumers 36 February 21st, 2012 2011 Full Year Results Roadshow

  38. Slide 38: Communication trends

    Communication trends „ Buy Space „ Earn Attention „ Deliver a Message „ Start a Conversation Spend gets brands visibility: Paid media Creativity gets people ‘liking’ them: Earned media 37 February 21st, 2012 2011 Full Year Results Roadshow

  39. Slide 39: From Brand Communication to Brand Conversation while increasing ROBBI

    From Brand Communication to Brand Conversation while increasing ROBBI* *Return On Brand Building Investment 38 February 21st, 2012 2011 Full Year Results Roadshow

  40. Slide 40: How Nestlé is Driving Profitable Brand Conversation

    How Nestlé is Driving Profitable Brand Conversation „ Digital opportunities are an integral part of Brand Campaigns „ Rapid increase in brand building investment in Digital and Social Media „ Build internal Digital competencies as competitive advantages „ Nestlé and Social Media – brand conversation

  41. Slide 41: Brand Building the Nestlé Way

    Brand Building the Nestlé Way Fundamentals of Brand Building „ Targeting Consumer „ Inspiring Brand „ Big Brand Idea „ Measurable Results 40 February 21st, 2012 2011 Full Year Results Roadshow

  42. Slide 42: Brand Building the Nestlé Way

    Brand Building the Nestlé Way 41 February 21st, 2012 2011 Full Year Results Roadshow

  43. Slide 43: Effectiveness of Nestlé's Messaging

    Effectiveness of Nestlé’s Messaging Effective recall and persuasiveness of message % in Upper 30 40 quartile 51 % in Upper middle quartile 34 31 21 2009 2010 2011 Base: All Nestle Aired adverts Quartiles are based on all ads on database. 42 February 21st, 2012 2011 Full Year Results Roadshow

  44. Slide 44: Creating Competitive Gaps for our Markets

    Creating Competitive Gaps for our Markets Brand Building g Digital & Social the Nestlé Way y Media Strategy Excellence Excellence in Brand Building in Listening, Engaging and Inspiring 43 February 21st, 2012 2011 Full Year Results Roadshow

  45. Slide 45: Winning in Digital & Social Media

    Winning in Digital & Social Media Inspiring & Transforming „ Social by Design Engaging „ Breakthrough Insights „ Nurturing Brand Advocacy & Innovation Listening „ Consumer Conversations „ 24/7 Sense & Respond „ Digital Measurements „ Content, Apps & Services „ Conversation Analysis „ Search Analysis

  46. Slide 46: How Nestlé is Driving Profitable Brand Conversation

    How Nestlé is Driving Profitable Brand Conversation „ Digital opportunities are an integral part of Brand Campaigns „ Rapid increase in brand building investment in Digital and Social Media „ Build internal Digital competencies as competitive advantages „ Nestlé and Social Media – brand conversation

  47. Slide 47: Trend in Digital Investment

    Trend in Digital Investment Over 50 Apps launched Over 250 Nestlé brand pages on Facebook Over 1000 brand websites 46 February 21st, 2012 2011 Full Year Results Roadshow

  48. Slide 48: How Nestlé is Driving Profitable Brand Conversation

    How Nestlé is Driving Profitable Brand Conversation „ Digital opportunities are an integral part of Brand Campaigns „ Rapid increase in brand building investment in Digital and Social Media „ Build internal Digital competencies as competitive advantages „ Nestlé and Social Media – brand conversation

  49. Slide 49: Sharing Internal Digital Best Practices

    Sharing Internal Digital Best Practices 48 February 21st, 2012 2011 Full Year Results Roadshow

  50. Slide 50: How Nestlé is Driving Profitable Brand Conversation

    How Nestlé is Driving Profitable Brand Conversation „ Digital opportunities are an integral part of Brand Campaigns „ Rapid increase in brand building investment in Digital and Social Media „ Build internal Digital competencies as competitive advantages „ Nestlé and Social Media – brand conversation

  51. Slide 51: Brand Conversation through Apps

    Brand Conversation through Apps Downloaded by 10% of smart-phone users in France 50 February 21st, 2012 2011 Full Year Results Roadshow

  52. Slide 52: Brand Conversation through Apps

    Brand Conversation through Apps France Germany HongKong Maggi Apps launched successfully across the globe 51 February 21st, 2012 2011 Full Year Results Roadshow

  53. Slide 53: Brand Conversation through Facebook

    Brand Conversation through Facebook 250+ Nestlé brand pages with 40+ million Facebook fans 7 brands have 1+ million fans each 52 February 21st, 2012 2011 Full Year Results Roadshow

  54. Slide 54: Brand Conversation through Earned Media

    Brand Conversation through Earned Media Over 10 million earned media viewings each 53 February 21st, 2012 2011 Full Year Results Roadshow

  55. Slide 55: It's all about Engaging with Consumers

    It’s all about Engaging with Consumers 54 February 21st, 2012 2011 Full Year Results Roadshow

  56. Slide 56: Reaching and Engaging with the Consumer

    Reaching and Engaging with the Consumer 55 February 21st, 2012 2011 Full Year Results Roadshow

  57. Slide 57: Reaching and Engaging with the Consumer

    Reaching and Engaging with the Consumer 56 February 21st, 2012 2011 Full Year Results Roadshow

  58. Slide 58: Reaching and Engaging with the Consumer

    Reaching and Engaging with the Consumer 57 February 21st, 2012 2011 Full Year Results Roadshow

  59. Slide 59: Reaching and Engaging with the Consumer

    Reaching and Engaging with the Consumer 58 February 21st, 2012 2011 Full Year Results Roadshow

  60. Slide 60: Reaching and Engaging with the Consumer

    Reaching and Engaging with the Consumer 59 February 21st, 2012 2011 Full Year Results Roadshow

  61. Slide 61: Reaching and Engaging with the Consumer

    Reaching and Engaging with the Consumer 60 February 21st, 2012 2011 Full Year Results Roadshow

  62. Slide 62: Reaching and Engaging with the Consumer

    Reaching and Engaging with the Consumer 61 February 21st, 2012 2011 Full Year Results Roadshow

  63. Slide 63: Reaching and Engaging with the Consumer B2B

    Reaching and Engaging with the Consumer B2B 62 February 21st, 2012 2011 Full Year Results Roadshow

  64. Slide 64: Reaching and Engaging with the Consumer

    Reaching and Engaging with the Consumer 63 February 21st, 2012 2011 Full Year Results Roadshow

  65. Slide 65: 1,000,000 new outlets in AOA between 2010 and 2012

    1,000,000 new outlets in AOA between 2010 and 2012 64 February 21st, 2012 2011 Full Year Results Roadshow

  66. Slide 66: It's all about Engaging with Consumers

    It’s all about Engaging with Consumers 65 February 21st, 2012 2011 Full Year Results Roadshow

  67. Slide 67: Roadmap Driving Performance in New Reality

    Roadmap Driving Performance in New Reality Competitive Advantages Operational Growth Pillars Drivers 66 February 21st, 2012 2011 Full Year Results Roadshow

  68. Slide 68: 2011 Full Year Roadshow - Wan Ling Martello, CFO Designate

    2011 Full Year Roadshow Wan Ling Martello Chief Financial Officer Designate February 21st, 2012 2011 Full Year Roadshow

  69. Slide 69: Driving Organic Growth & Margin Improvement

    Driving Organic Growth & Margin Improvement 15.0% 14.3% 14.6% 14.0% 13.5% 14.4% 12.9% 12.5% 12.6% 12.3% 11.8% 10-year annual averages 9.7% Organic Growth 6.4% 8.3% 7.4% 7.5% Real Internal Growth 3.6% 6.2% 6.2% 6.2% 4.9% 5.1% 4.5% 4.1% Organic Growth EBIT margin * TOP margin 2001 2002 2003 2004 2005

  70. Slide 70: The Nestlé Model

    The Nestlé Model „ Organic growth 5-6% „ Increased trading operating margin in constant currencies „ Increased underlying EPS in constant currencies „ Improvement in capital efficiency 69 February 21st, 2012 2011 Full Year Results Roadshow

  71. Slide 71: 2011 Full Year Roadshow Discussion

    2011 Full Year Roadshow Discussion February 21st, 2012 2011 Full Year Roadshow

Nestlé — FY2011 Earnings Presentation on 6ix