Nestle S.a. · SIX:NESN
Nestle — FY2010 Earnings Presentation
51 slides from Nestle's earnings presentation, Feb 17, 2011
Slide 1: Welcome to the Full Year Results Press Conference
Welcome to the Full Year Results Press Conference Paul Bulcke Nestlé CEO
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: New Conference Centre
New Conference Centre February 17, 2011 Nestlé Press Conference
Slide 4: Executive Board
Executive Board Paul Bulcke Werner Bauer Frits van Dijk José Lopez John J. Harris Jim Singh Laurent Freixe Petraea Heynike Chris Johnson Marc Caira Jean-Marc Duvoisin Nandu Nandkishore David Frick Luis Cantarell 3 February 17, 2011 Nestlé Press Conference
Slide 5: Nestlé Group Highlights 2010
6.2 % Organic growth Nestlé Group Increased EBIT margin Highlights 2010 Growth in all regions and categories Continued momentum for 2011 4 February 17, 2011 Nestlé Press Conference
Slide 6: Full Year Results
Full Year Results Jim Singh Chief Financial Officer
Slide 7: 2010 Performance
Actuals Sales (Group) 109.7 bn 6.2% organic growth, net divestments -0.6%, FX of -3.6% Net Profit 34.2 bn Includes 2010 profit on sale of Alcon Underlying EPS 3.32 +7.4%. +10.3% constant currency Strong Full Year Operating Cash flow 13.6 bn Improved operating performance Normalisation of working cap
Slide 8: Sales Development
Total Group Continuing CHF 109.7 bn CHF 104.6 bn +6.2% +4.6% RIG +4.4% Sales OG +6.0% OG Development +1.6% Group and +2.0% total +1.6% Pricing +4.0% total Continuing -0.6% Acq./Div. +1.8% -3.6% Exchange Rates -3.8% OG = Organic Growth RIG = Real Internal Growth 7 February 17, 2011 Nestlé Press Confe
Slide 9: Strong RIG momentum maintained
2009 2010 6.4 5.4 6.2 6.0 Strong RIG 5.5 momentum 4.2 4.5 4.4 4.6 maintained 3.6 3.3 3.5 3.9 1.6 OG 0.5 RIG Continuing operations -0.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 8 February 17, 2011 Nestlé Press Conference
Slide 10: Total Food & Beverages: growth
• Market leadership • Growth is broad-based 10.2% • All markets, emerging & developed, 8.3% Total Food offer opportunities for growth & Beverages: 5.7% growth everywhere OG % 3.7% 3.0% 3.5% RIG % Sales* Europe Americas AOA (CHF bn) 34.7 46.8 22.2 *each region includes the Zones, Nestlé Waters, Nestl
Slide 11: Organic growth: broad-based performance
13.1 11.5 9.5 Organic growth: 6.9 broad-based 6.0 performance 4.4 3.1 3.3 OG RIG Continuing Operations Developed Markets Emerging Markets BRIC 10 February 17, 2011 Nestlé Press Conference
Slide 12: Zone Americas: 5.9% organic growth
• Fourth quarter acceleration • North America growth driven by PetCare, Confectionery and Beverages Share gain in PetCare & Ice cream among bigger categories Zone Americas: 5.9% organic 5.9% growth • Broad-based growth in Latin America: double-digit for Region & Ambient 3.0% dairy, Chocolate, Coffee
Slide 13: Zone Europe: 2.5% organic growth
• Strong growth with market share gains driven by innovation and brand investments • All large Western European (WE) markets grew: winning the big battles for share • Strongest WE categories: PetCare, Soluble Coffee, Frozen Pizzas and Chocolate Zone Europe: 2.5% organic 2.5% growth • Eastern Europe:
Slide 14: Zone Europe: Key drivers of growth
• Successful innovation: multi-year regional roll-outs • Appropriate level of brand support Zone Europe: • Ability to drive both category growth and category value Key drivers • Market share gains of growth • Highly efficient operating structure • High scoring customer service levels Virtuous circle
Slide 15: Zone AOA: 8.7% organic growth
• Strong despite tough Q4’09 RIG comps • Developed markets contribute growth • Double-digit performance across emerging markets Zone AOA: 8.7% organic growth 8.7% 7.0% • Best categories: Ambient Dairy, Ambient Culinary and Beverages; good share performances • PPPs double-digit growth • EBIT% OG Driv
Slide 16: Nestlé Nutrition: 6.7% organic growth
• Continued good organic growth driven by brand investments and new product launches in Infant Nutrition (IN) • Double-digit growth in emerging markets Good performance in North America Nestlé Nutrition: 6.7% organic growth 6.7% • Good market share performance 5.5% in our key markets, including Jenn
Slide 17: Nestlé Waters: 4.4% organic growth
• Positive organic growth in all regions; double- digit in emerging markets • Share gains in North America; good performances by regional brands & Nestlé Pure Life Nestlé Waters: 4.4% organic growth • Share gains in Europe: Good performances by local brands and Perrier & S.Pellegrino 4.8% 4.4% • EBI
Slide 18: Other Food & Beverages: 9.8% organic growth
•Nestlé Professional Growth in all Zones driven by Beverages, Ambient dairy & emerging markets Successful launches of new super-premium Nescafé systems solutions Vitality acquisition going well Other Food & Beverages: 9.8% organic growth • Nespresso 9.8% CHF 3bn+, OG 20%+; share up to 19.7% 8.5% Dou
Slide 19: Billionaire Brands: 7.1% organic growth
Over 20% Billionaire Brands: 10.1 to 20% 7.1% organic 7.6 to 10% growth 5.1 to 7.5% 3.1 to 5% 0.0 to 3% Below 0% 18 February 17, 2011 Nestlé Press Conference
Slide 20: EBIT performance: Continuing Operations
+20 +0 13.4% 13.1% +40 -100 +30 +70 EBIT FY09 EBIT COGS Distribution Marketing Admin. R&D FY10 EBIT performance: Continuing • Cost of goods down 40 bps; distribution down 20 bps Operations • Marketing up 100 bps, with consumer-facing marketing spend up 13.2% in constant currencies • Admin costs down
Slide 21: Trade Net Working Capital continues to improve
TNWC in % of NPS (Continuing operations) Trade Net Working Capital 9.6% 9.1% continues to 7.9% 7.5% improve 2007 2008 2009 2010 TNWC determined using the average of the previous 5 quarters • Trade Net Working Capital -40 bps as a percent of sales 20 February 17, 2011 Nestlé Press Conference
Slide 22: Trend of net debt in 2010
Key Items CHF billions Cash Out: Share buy-back (incl. Treasury shares) 11.9 Trend of net Dividend 5.4 debt in 2010 18.1 Cash In: Net M&A 24.9 Free Cash Flow, FX & Others 9.2 1.3* Net Debt Net Debt 01/01/10 31/12/10 *Adjusted Net Debt including investment of Alcon cash proceeds of CHF 2.6 bn 21 Febr
Slide 23: Increasing dividend and payout ratio
55.7% 51.8% Underlying EPS/Dividend Payout Ratio 49.6% 43.6% 3.32 41.9% 43.2% 3.09 2.80 2.82 Increasing 2.41 dividend and 2.15 1.85 payout ratio 1.60 1.40 1.22 Underlying EPS 1.04 0.90 Dividend (CHF) 2005 2006 2007 2008 2009 2010* *Proposed dividend 22 February 17, 2011 Nestlé Press Conference
Slide 24: Total cash returned to shareholders
• 2007-2011: CHF 60 bn cash returned to shareholders 10.1 8.7 Total cash 7.0 returned to 4.8 shareholders 4.4 6.1 5.0 5.4 Share Buy-Back 4.6 4.0 Dividend (CHF) bn 2007 2008 2009 2010 2011* *Announced & proposed 23 February 17, 2011 Nestlé Press Conference
Slide 25: Summary: Total Performance Framework
Summary: Total Performance Framework Achieving Investment Scale Driving Simplicity for Growth Benefits Performance THE NESTLÉ MODEL 24 February 17, 2011 Nestlé Press Conference
Slide 26: Paul Bulcke, Nestlé CEO
Paul Bulcke Nestlé CEO
Slide 27: Challenges
Challenges 26 February 17, 2011 Nestlé Press Conference
Slide 28: Opportunities
Opportunities 27 February 17, 2011 Nestlé Press Conference
Slide 29: Outperform in every category and region
Outperform in every... category region 28 February 17, 2011 Nestlé Press Conference
Slide 30: Nestlé is an and company
Nestlé is an company • Long short term • Developed emerging markets • Popularly positioned premium products • Modern traditional trade • ... 29 February 17, 2011 Nestlé Press Conference
Slide 31: Nestlé in developed markets
Nestlé in developed markets... 30 February 17, 2011 Nestlé Press Conference
Slide 32: Nestlé in developed markets: Europe
Nestlé in developed markets... Europe 31 February 17, 2011 Nestlé Press Conference
Slide 33: Nestlé in developed markets: North America, Japan
Nestlé in developed markets... North America Japan 32 February 17, 2011 Nestlé Press Conference
Slide 34: ... in emerging markets
Images Consumer developing market ... in emerging markets 33 February 17, 2011 Nestlé Press Conference
Slide 35: ... in emerging markets
... in emerging markets 34 February 17, 2011 Nestlé Press Conference
Slide 36: ... in emerging markets
... in emerging markets CHF 39 billion and growing double-digit 35 February 17, 2011 Nestlé Press Conference
Slide 37: Nestlé with Popularly Positioned Products
Nestlé with Popularly Positioned Products... 36 February 17, 2011 Nestlé Press Conference
Slide 38: Nestlé with Popularly Positioned Products
Europe Nestlé with Popularly Positioned Products... Pakistan India 37 February 17, 2011 Nestlé Press Conference
Slide 39: ... with premium products
... with premium products 38 February 17, 2011 Nestlé Press Conference
Slide 40: ... with premium products
... with premium products 39 February 17, 2011 Nestlé Press Conference
Slide 41: Nestlé in modern traditional trades
Nestlé in modern traditional trades in other channels 40 February 17, 2011 Nestlé Press Conference
Slide 42: Nutrition, Health and Wellness
We enhance the quality of life Nutrition, Health with good food and Wellness and beverages everywhere 41 February 17, 2011 Nestlé Press Conference
Slide 43: Nestlé Health Science
We enhance the quality of life Nestlé Health with good food with personalised Science and beverages everywhere nutrition for medical conditions 42 February 17, 2011 Nestlé Press Conference
Slide 44: Nestlé Health Science vision and ambition
Pioneering science-based nutritional solutions to deliver improved personalised health care for medical conditions Nestlé Health Science vision and ambition 43 February 17, 2011 Nestlé Press Conference
Slide 45: Facing the challenges: volatility of raw material prices
Facing the challenges: Images cornfi volatility of raw 829984_42385051.jpg material prices 44 February 17, 2011 Nestlé Press Conference
Slide 46: A multiple approach to manage volatility of raw material prices
A multiple approach to manage volatility of raw material prices 45 February 17, 2011 Nestlé Press Conference
Slide 47: Nestlé Continuous Excellence
Nestlé Continuous Excellence 46 February 17, 2011 Nestlé Press Conference
Slide 48: Responsible use of resources
From 2000 to 2010 per tonne of manufactured product Water consumption – 61% Responsible Waste water generation – 66% use of resources Energy consumption – 44% Greenhouse gases – 51% From 1991 to 2010 Packaging material – 517’700 tonnes 47 February 17, 2011 Nestlé Press Conference
Slide 49: Creating Shared Value
Nutrition Creating Shared Water Value Rural development 48 February 17, 2011 Nestlé Press Conference
Slide 50: Nestlé Roadmap
Competitive advantages Nestlé Roadmap Operational Growth pillars drivers 49 February 17, 2011 Nestlé Press Conference
Slide 51: Questions & Answers
Full Year Results Press Conference Questions & Answers 50 February 17, 2011 Nestlé Press Conference