Nestle S.a. · SIX:NESN
Nestle — H1 2013 Earnings Presentation
23 slides from Nestle's earnings presentation, Aug 8, 2013
Slide 1: 2013 Half Year Results
2013 Half Year Results Wan Ling Martello Chief Financial Officer Roddy Child-Villiers Head of Investor Relations 0 August 8th, 2013 Half Year Results
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: 2013 Half Year Highlights
2013 Half Year Highlights RIG acceleration to 2.7%, all regions contributed Trading operating profit margin +20 bps to 15.1% Operating cash flow of CHF 5 billion Input cost environment: reduced pricing but benefit to margin EPS up 3.4% reported; underlying +7.2% in constant currencies 2 Au
Slide 4: 2013 Half Year Highlights
2013 Half Year Highlights Developed markets continued to grow Emerging markets up over 8% Double digit in Latin America, Russia, parts of AOA Outlook: We expect the growth momentum seen in the first half to continue in the second half, allowing us for the full year to deliver, in line with o
Slide 5: Operating Segments Growth
Operating Segments Growth % RIG % OG 6.5 5.0 5.0 5.0 2.2 4.0 4.3 3.9 1.8 0.5 1.5 1.8 Zone Zone Zone Nestlé Nestlé Other Europe Americas Asia, Oceania Waters Nutrition & Africa Sales 7.5 13.6 9.4 3.7 5.0 6.0 CHF bn rounded 4 August 8th, 2013 Half Year Results
Slide 6: Operating Segments Margin Evolution
Operating Segments Margin Evolution H1 2012 TOP% H1 2013 TOP% -60bps +20 bps +60 bps +30 bps -10 bps 19.1 20.0 19.2 17.8 No change 14.9 10.0 Zone Zone Zone Nestlé Nestlé Other Europe Americas Asia, Oceania Waters Nutrition & Africa TOP = Trading Operating Profit 5 August 8th, 2013 Half Year Results
Slide 7: Product Groups Growth
Product Groups Growth 7.1 % RIG % OG 4.7 4.5 4.7 4.6 3.6 2.4 2.4 -0.6 -0.2 Powdered & Milk Products Prepared Dishes Confectionery PetCare Liquid Beverages & Ice Cream & Cooking Aids Sales 10.1 8.6 6.9 4.6 5.5 CHF bn rounded 6 August 8th, 2013 Half Year Results
Slide 8: Product Groups Margin Evolution
Product Groups Margin Evolution H1 2012 TOP% H1 2013 TOP% +100 bps -120 bps +80 bps 24.0 +30 bps -110 bps 19.0 15.9 13.5 12.7 Powdered Milk Products Prepared Dishes Confectionery PetCare & Liquid… & Ice Cream & Cooking Aids TOP = Trading Operating Profit 7 August 8th, 2013 Half Year Results
Slide 9: Sales by Region: Americas, Europe, Asia, Oceania & Africa
Asia, Americas Europe Oceania & Africa Sales (CHF) 19.4 bn 12.4 bn 13.4 bn OG +5.0% +0.6% +6.3% RIG +2.1% +1.5% +5.0% Each region includes Zones, Nestlé Waters, Nestlé Nutrition, Nestlé Professional, Nespresso and NHSc; OG = Organic Growth, RIG = Real Internal growth 8 August 8th, 2013 Half Year Res
Slide 10: Americas
Americas Positives: Challenges: PetCare Growth & Cats, Ice Cream Treats & Litter PetCare Speciality & Dog Stouffer’s & DiGiorno Frozen versus Fresh Water market growth Frozen “nutritionals” Infant Nutrition Water competitive Coffee, Chocolate, environment Coffee-Mate In Latin Ame
Slide 11: Europe
Europe Positives: Challenges: Growth & reinvestment The Macro situation Customer service levels, Southern Europe innovation Water & Ice Cream Premiumisation, value Nestlé Professional focused offers Russia, Germany & Great Britain PetCare & Coffee Infant Nutrition 10 August 8th,
Slide 12: Asia, Oceania & Africa
Asia, Oceania & Africa Positives: Challenges: Growth slower, The Macro situation but dynamic Competitive environment in China, South Asia, some categories Indonesia, Malaysia Nestlé Professional in China & Singapore Powdered Beverages & Dairy Key developed market categories Nestlé &
Slide 13: Trading Operating Profit Margin
Trading Operating Profit Margin +10 -60 Trading Operating Profit +110 +70 margin improves 20 bps to 15.1% -10 0 -30 TOP +100 15.1% Marketing investment +60 bps +20 bps TOP 14.9%* 0 Constant currency consumer facing spend +15% HY 2012 Other COGS Distribution Marketing Admin. R&D Net Other HY 20
Slide 14: Income Statement
Income Statement As % of sales Difference in June 30 June 30 basis points/% 2012* 2013 (rounded) Trading operating profit 14.9 15.1 +20 Net other operating income/expense (0.1) (0.2) -10 Operating profit 14.8 14.9 +10 Net financial income/expense (0.8) (0.7) +10 Profit before taxes, associates and J
Slide 15: Operating Cash Flow
Operating Cash Flow - 0.5 + 0.6 5.2 - 0.3 5.0 - 0.2 Operating Operating Variation Others Operating Cash Flow improvement of working Cash Flow 30 June 2012 capital 30 June 2013 in CHF bn (rounded) 14 August 8th, 2013 Half Year Results
Slide 16: 1. Group – High Quality Performance
1. Group – High Quality Performance RIG acceleration Margin improvement & increased marketing spend Strong cash flow performance & positive trend in working capital 15 August 8th, 2013 Half Year Results
Slide 17: 2. Broad Based Operational Performance
2. Broad Based Operational Performance Americas: Progress on top & bottom line; investment for growth Europe: continued growth & investment for growth AOA: Driving RIG & improving margin Infant Nutrition: good growth globally; Wyeth on track Water: progress in tough season Nespresso: dou
Slide 18: 3. 2013 Outlook
3. 2013 Outlook We expect the growth momentum seen in the first half to continue in the second half, allowing us for the full year to deliver, in line with our commitments, around 5% organic growth with an improvement in margins and underlying earnings per share in constant currencies 17 August 8th,
Slide 19: 2013 Half Year Results Discussion
2013 Half Year Results Discussion 18 August 8th, 2013 Half Year Results
Slide 20: Appendix
Appendix 19 August 8th, 2013 Half Year Results
Slide 21: Net Debt
Net Debt -0.5 CHF bn + 3.1 - 6.6 - 0.2 + 0.1 - 22.2 - 18.1 ∆4.1bn Net debt Treasury shares Acquisition Dividends Exchange rates & Free Cash Flow Net Debt January 1st* (net) net other June 30th disposals (incl. Minority) * Net Debt excluding JVs since 1 January 2013 following adoption of IFRS 11 new
Slide 22: Translational Impact of Swiss Franc
Translational Impact of Swiss Franc Weighted Average Exchange Rates CHF per 1H 2012 1H 2013 (%) US Dollar (1) 0.93 0.94 +0.9 Euro (1) 1.20 1.23 +2.1 £ Sterling (1) 1.46 1.44 -1.4 Real (100) 49.90 46.22 -7.4 Mex. Peso (100) 7.01 7.46 +6.4 Yen (100) 1.16 0.98 -15.8 21 August 8th, 2013 Half Year Result
Slide 23: FX Impact on All Businesses
FX Impact on All Businesses (%) 1Q 2013 1H 2013 Zone Americas -2.6 -2.4 Zone Europe +1.2 +1.3 Zone AOA -1.0 -1.4 Nestlé Waters +0.9 +0.8 Nestlé Nutrition -1.9 -1.8 Other +0.2 +0.3 Total -0.9 -0.9 22 August 8th, 2013 Half Year Results