Slide 1: Full-year results 2018
Full-year results 2018 Press Conference 1 | February 14, 2019 | Nestlé full-year results 2018
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 2018 – Mark Schneider, CEO
Full-year results 2018 Mark Schneider, CEO 3 | February 14, 2019 | Nestlé full-year results 2018
Slide 4: Key messages
Key messages • Continued progress with our accelerated value creation model • Solid organic growth of 3.0% led by stronger momentum in the U.S. and China, as well as in infant nutrition • Underlying trading operating profit margin expansion of 50 bps supported by operational efficiencies, structural
Slide 5: Strong 2018 financial results
Strong 2018 financial results Organic Underlying Underlying EPS Free cash flow Return on growth trading operating (% annual increase in (CHF bn) invested capital constant currency) profit margin 17.0% +13.9% 16.5% 12.1% 10.8 3.0% 9.4 9.1% 2.4% +4.7% 2.4% 2017 2018 2017 2018 2017 2018 2017 2018 2017
Slide 6: Delivering on our commitments
Delivering on our commitments Sharpen our • Focus on core food & beverage and nutritional health products strategic focus • Further portfolio evolution towards attractive high-growth categories Increase organic • Organic growth of 3.0%, with leading volume/mix and improving pricing growth • Improved
Slide 7: Clear path to achieving mid-single digit growth by 2020
Clear path to achieving mid-single digit growth by 2020 2018 Growth examples 2018-2019 • Nespresso Vertuo system: > 60% Acquisitions • Petcare in emerging 2018-2019 • Starbucks license markets: double-digit Mid-single • Nestlé Skin Health • Atrium Innovations • Infant nutrition organic digit Disposa
Slide 8: Fixing base business
Fixing base business Expansion of organic range Organic growth • Significant progress made in past two years 2017 2018 • Developed convincing Visual transformation with new growth strategies campaign “Anything for Baby” • Regained competitive cost structure 2016 • Exploring strategic options 8 | Feb
Slide 9: Developing our portfolio
Developing our portfolio Sold Under Acquired or invested Main criteria for divestiture strategic review Main criteria for acquisitions • Non-core to business • Fit with strategy and culture • Limited ability to win • Sound financial model; disciplined and thorough financial valuation Starbucks – Con
Slide 10: Exploring strategic options for Herta charcuterie
Exploring strategic options for Herta charcuterie (cold cuts and meat-based products) Charcuterie business under review • Sales: ~CHF 680 m in 2018 • Markets: France, Germany, Belgium, Luxemburg, UK, Ireland • More than 2’100 employees and 3 factories Focus on high-growth plant-based offerings • Gar
Slide 11: Supporting growth through innovation
Supporting growth through innovation NAN HMO Nespresso Vertuo System Coffee-mate natural bliss (Human Milk Oligosaccharides) Reached ~ CHF 600 m of sales Reached ~ CHF 400 m of sales Reached ~ CHF 150 m of sales across 40 markets in the with growth of > 60% in 2018 with growth > 30% in 2018 driven f
Slide 12: 2019 guidance
2019 guidance • Continued improvement in organic sales growth and underlying trading operating margin towards our 2020 target • Restructuring costs expected at around CHF 700 m • Increase in underlying earnings per share in constant currency and capital efficiency 12 | February 14, 2019 | Nestlé ful
Slide 13: Business as a force for good
Business as a force for good Living our purpose and values – 2019 priorities Contribute to Lead the way towards Foster diversity and healthier lives a waste-free future inclusion at Nestlé 13 | February 14, 2019 | Nestlé full-year results 2018
Slide 14: Full-year results 2018 – François-Xavier Roger, CFO
Full-year results 2018 François-Xavier Roger, CFO 14 | February 14, 2019 | Nestlé full-year results 2018
Slide 15: Balanced and diversified portfolio
Balanced and diversified portfolio 2018 Sales: CHF 91.4 billion 2018 Organic Growth EMENA 4.4% 29% 2.8% 2.1% AMS 45% AOA 26% AMS EMENA AOA 15 | February 14, 2019 | Nestlé full-year results 2018
Slide 16: Strong emerging market footprint delivering profitable growth
Strong emerging market footprint delivering profitable growth 2018 Sales: CHF 91.4 billion 2018 Organic Growth Developed Emerging 4.9% 58% 42% 1.6% Emerging Developed 16 | February 14, 2019 | Nestlé full-year results 2018
Slide 17: Growing in all product categories
Growing in all product categories 2018 Sales: CHF 91.4 billion 2018 Organic Growth Water 8% 4.6% 4.5% Confectionery Powdered & 9% liquid beverages 24% 3.3% Prepared dishes 2.7% 2.3% & cooking aids 1.8% 13% 1.2% Nutrition & Health Science PetCare 18 % Powdered Nutrition Milk PetCare Prepared Confecti
Slide 18: Revived growth in key markets
Revived growth in key markets USA Greater China Organic Growth Organic Growth 5.0% 2.6% 1.6% 0.2% 2017 2018 2017 2018 18 | February 14, 2019 | Nestlé full-year results 2018
Slide 19: Full-year sales growth
Full-year sales growth OG +3.0% +0.7% -1.6% +0.5% +2.5% 89.6 91.4 Reported sales growth +2.1% -30 FY 2017 sales RIG Pricing Net M&A Foreign FY 2018 sales CHF bn exchange CHF bn 19 | February 14, 2019 | Nestlé full-year results 2018
Slide 20: Underlying trading operating profit margin +50 bps mainly driven by cost reductions
Underlying trading operating profit margin +50 bps mainly driven by cost reductions -30 bps +30 bps +50 bps • Freight costs • Structural cost reduction in G&A • Marketing • Pricing efficiencies • Structural cost reduction in 16.5% manufacturing • Operational 17.0% efficiencies • Product mix -30 Unde
Slide 21: Strong free cash flow: CHF 10.8 bn
Strong free cash flow: CHF 10.8 bn Free cash flow in % of sales 13.5% 13.0% 12.5% 11.8% 12.0% 11.4% 11.3% 11.2% 11.5% 11.0% 10.9%* 11.0% 10.5% 10.4% 10.0% 9.5% 9.5%** 9.0% 2012 2013 2014 2015 2016 2017 2018 8.5% * 2014 adjusted for exceptional income due to L’Oréal transaction (CHF 4.1 bn impact on
Slide 22: Thank You!
UX Ne: tle Good Food, Good Life