Slide 1: CAGNY 2021: Creating value through sustainability leadership
CAGNY 2021 Creating value through sustainability leadership François-Xavier Roger EVP, Chief Financial Officer
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: Our business is global, balanced and diversified
Our business is global, balanced and diversified 2020 sales: CHF 84.3 bn Where we sell What we sell EMENA Beverages PetCare Nutrition & Prepared dishes 29% (incl. coffee) Health Science & cooking aids 26% 17% 14% 14% Milk products Confectionery Water & ice cream AMS AOA 45% 26% 13% 8% 8% 8% 8% Resou
Slide 4: Another year of strong financial results in 2020
Another year of strong financial results in 2020 Organic sales growth Underlying TOP margin Underlying EPS (in CHF) +20 bps in constant currency +3.5% in constant currency 17.7% 17.6% 4.41 3.6% 4.21 3.5% 2019 2020 2019 2020 2019 2020 Return on Free cash flow Cash returned to shareholders invested ca
Slide 5: Third consecutive year of improved growth and margins
Third consecutive year of improved growth and margins Organic growth Underlying trading operating profit (%) (in % of sales) 3.6 17.7 16.5 2.4 2017 2020 2017 2020 restated 5 February 19, 2021 CAGNY
Slide 6: Mid-term outlook
Mid-term outlook • Sustained mid single-digit organic sales growth • Continued moderate underlying trading operating profit margin improvements • Continued prudent capital allocation and capital efficiency improvements • Value creation for both society and our shareholders 6 February 19, 2021 CAGNY
Slide 7: Sustainability: business as a force for good
Sustainability: business as a force for good • Creating Shared Value is how we do business at Nestlé • Supporting growth and enhancing relevance with consumers • Strengthening the resilience of our supply chain • Retaining and attracting diverse talent • Anticipating regulation 7 February 19, 2021 C
Slide 8: Nestlé's Net Zero Roadmap
Nestlé’s Net Zero Roadmap Our path to regeneration for future generations Moving faster Scaling up Delivering our promise 92m tonnes of GHG emissions 20% reduction by 2025 50% reduction by 2030 Net Zero by 2050 8 February 19, 2021 CAGNY
Slide 9: Investing in sustainability
Investing in sustainability Climate Sustainable packaging ~ CHF 3.2 bn investment ~ CHF 1.5 bn investment 2020-2025 2020-2025 • Supporting regenerative agriculture • Create a market for food-grade recycled plastic • Rethinking our operations • Develop packaging for the future • Transforming our prod
Slide 10: Sustainability core to consumer expectations
Sustainability core to consumer expectations Sustainability is key to purchase decisions Consumers are increasingly ready to pay a premium % of consumers by eco-segment % of Eco Actives consumers 20% 41% 59% (vs. 51% 20% 39% in 2019) 16% Eco Actives Eco Considerers Eco Dismissers 2019 2020 Source: W
Slide 11: Sustainability integral to our growth strategy
Sustainability integral to our growth strategy Accelerating the shift to Increasing focus in Embracing carbon plant-based products Research & Development neutrality for our brands • Building strong portfolio of • 10% of R&D employees • By 2022: Nespresso, plant-based brands dedicated to plant-based
Slide 12: Sustainability investments expected to be earnings-neutral
Sustainability investments expected to be earnings-neutral… …using a similar resource generation model as we have over the last 4 years 12 February 19, 2021 CAGNY
Slide 13: Delivering profitable growth and investing in sustainability
Delivering profitable growth and investing in sustainability 2016-2020 2021-2025 Organic growth leverage and structural cost* control ~ 70 bps resources freed up Similar resources freed up Growth & sustainability Growth & sustainability investments investments ~ 50 bps underlying TOP Moderate underl
Slide 14: Strong delivery on cost reduction over the last 4 years
Strong delivery on cost reduction over the last 4 years Savings of CHF 2.8 bn Examples, 2016-2020 (2020 over 2016) • 27 factories closed Manufacturing • Fixed factory overheads reduced by ~6% per annum in CHF CHF 1.0 bn • Production line efficiencies* increased by 10 percentage points • Global buyin
Slide 15: Further cost savings going forward
Further cost savings going forward Savings Examples, 2021-2025 • Strict control of fixed factory overheads Manufacturing • Further improve production line efficiencies* • Higher share of manufacturing managed by category rather by market • Further standardization of raw materials specifications Proc
Slide 16: Key takeaways
Key takeaways • Sustainability is integral to our growth strategy • Proven track record of margin improvement through cost reduction and growth leverage over the last 4 years • Going forward, a similar resource generation model is expected to deliver profitable growth and will enable us to invest fu
Slide 17: Thank you!
Thank you!