Nestle S.a. · SIX:NESN
Nestle — FY2019 Earnings Presentation
20 slides from Nestle's earnings presentation, Feb 13, 2020
Slide 1: Full-year results 2019 Press Conference
Full-year results 2019 Press Conference
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: Full-year results 2019 - Mark Schneider, CEO
Full-year results 2019 Mark Schneider, CEO
Slide 4: Key messages 2019
Key messages 2019 • Continued progress with our value creation model • Organic growth of 3.5% led by strong momentum in the U.S. and Purina PetCare globally • Underlying trading operating profit margin increase of 60 bps to 17.6%, reaching our 2020 profitability target range one year ahead of plan •
Slide 5: Strong 2019 financial results
Strong 2019 financial results Organic Underlying Underlying EPS Free cash flow Return on growth trading operating (CHF) (CHF bn) invested capital profit margin 17.6% 4.41 11.9 12.3% 17.0% 4.02 10.8 3.5% 12.1% 3.0% 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 5 February 13, 2020 Nestlé full-year
Slide 6: Continued progress towards mid single-digit organic growth
Continued progress towards mid single-digit organic growth 2019 Growth examples 2019 • Starbucks brand with > CHF 300 m incremental sales Acquisitions 2019 • Persona TM • PetCare: +7% OG 3.5% • Vegetarian / plant-based Disposals • Waters reorganization food: strong double-digit • Nestlé Skin Health
Slide 7: Market attractiveness
Developing our portfolio > 50 transactions Divesting / reviewing under-performing closed or announced or non-core businesses since 2017, equivalent to ~ 12% of Group sales Market attractiveness US Confectionery OG contribution in 2019 Acquiring / investing in high-growth +35 bps and core segments Ab
Slide 8: Supporting growth through faster innovation
Supporting growth through faster innovation Coffee PetCare Plant-based food Starbucks-branded products Premium brands Garden Gourmet > CHF 300 m incremental 2019 sales strong double-digit organic growth double-digit organic growth Vertuo Veterinary products and supplements Sweet Earth > 60% organic
Slide 9: Business as a force for good
Business as a force for good Creating a market for food-grade Boosting packaging innovation recycled plastics • Allocating more than CHF 1.5 bn to incentivize supply • Institute of Packaging Sciences • Sourcing up to 2 m metric tons (2020-25) • CHF 250 m venture fund focusing on start-up companies •
Slide 10: 2020 guidance
2020 guidance • Continued increase in organic sales growth, expecting further acceleration in 2021 / 2022 towards sustainable mid single-digit growth. • Underlying trading operating profit margin with continued improvement. • 2020 restructuring costs* are expected at around CHF 500 million. • Underl
Slide 11: Full-year results 2019 - François Roger, CFO
Full-year results 2019 François Roger, CFO F e b r u a
Slide 12: Full-year sales growth
Full-year sales growth OG +3.5% +0.6% +2.9% -0.8% -1.5% 92.6 91.4 Reported sales growth +1.2% -30 FY 2018 sales RIG Pricing Net M&A Foreign FY 2019 sales CHF bn exchange CHF bn 12 February 13, 2020 Nestlé full-year results 2019
Slide 13: Broad-based growth with stronger momentum in the Americas
Broad-based growth with stronger momentum in the Americas 2019 Sales: CHF 92.6 billion 2019 Organic growth EMENA 28% 4.0% 3.8% 2.3% AMS AOA 46% 26% AMS EMENA AOA Each geography includes zones, Nestlé Waters, Nespresso, Nestlé Health Science and Nestlé Skin Health 13 February 13, 2020 Nestlé full-yea
Slide 14: Growth acceleration driven by developed markets
Growth acceleration driven by developed markets 2019 Sales: CHF 92.6 billion 2019 Organic growth Emerging 4.7% Developed 58% 42% 2.6% Developed Emerging 14 February 13, 2020 Nestlé full-year results 2019
Slide 15: Positive organic growth in all categories
Positive organic growth in all categories 2019 Sales: CHF 92.6 billion 2019 Organic growth Water 8% 7.0% Confectionery Powdered & liquid 9% beverages 25% 4.9% Prepared dishes 3.3% 2.8% 2.5% & cooking aids 13% 1.9% 0.7% Nutrition & Health Science Milk products 16 % Powdered Nutrition PetCare Milk Pre
Slide 16: Key growth platforms
Key growth platforms United States PetCare E-commerce Premium products 18.0% 18.5% 7.4% 7.0% 6.5% 4.1% 4.5% 2.6% 2018 2019 2018 2019 2018 2019 2018 2019 All figures relate to organic growth 16 February 13, 2020 Nestlé full-year results 2019
Slide 17: Margin expansion supported by structural cost reductions
Margin expansion supported by structural cost reductions +50 bps +10 bps • Reduced structural costs • Increased 17.0% marketing investments 17.6% -30 Underlying TOP Gross Distribution Administration, Underlying TOP FY 2018 margin Marketing, R&D FY 2019 17 February 13, 2020 Nestlé full-year results 2
Slide 18: Strong free cash flow of CHF 11.9 bn
Strong free cash flow of CHF 11.9 bn Free cash flow in % of sales 13.5% 12.9% 13.0% 12.5% 11.8% 12.0% 11.5% 11.0% 10.4%* 10.5% 10.0% 9.5% 9.0% 2017 2018 2019 8.5% * Restated, reflecting implementation of IFRS 15 and IFRS 16 18 February 13, 2020 Nestlé full-year results 2019
Slide 19: SIR ANE
SIR ANE Bis Se Nestlé Good food, Good life
Slide 20: Abbreviations
Abbreviations • OG Organic growth • RIG Real internal growth • AMS Zone Americas • EMENA Zone Europe, Middle East, and North Africa • AOA Zone Asia, Oceania, and sub-Saharan Africa • EPS Earnings per share • COGS Cost of goods sold • FCF Free cash flow • TOP Trading operating profit • UTOP Underlyin