Nestle India Ltd. · NSE:NESTLEIND
Nestle India — Investor Presentation (March 2019)
31 slides from Nestle India's investor presentation, Mar 12, 2019
Slide 1: Nestlé India: Investor Update
Nestlé India: Investor Update ‘Enhancing quality of life and contributing to a healthier future’ March 12, 2019
Slide 2: Disclaimer
Disclaimer This presentation may contain statements which reflect management’s current views and estimates and could be construed as forward looking statements. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those cont
Slide 3: Key highlights
Key highlights Nestlé is world’s largest food and Strong support from Nestlé Group beverage company pursuing Nutrition, Health and Wellness strategy Recalibrating for future Nestlé has been present in India for 100+ years Well recognized FMCG Iconic brands are winning company in India with local con
Slide 4: Nestlé Group: World’s largest food and beverage company
Nestlé Group: World’s largest food and beverage company AMS EMENA AOA Nestlé (2018) Where we sell (2018 Sales: CHF 91.4 Billion)1: 45% 29% 26% Providing Safe, Quality Nutrition 2,000+ Around for more than 150 Years Brands Worldwide 308,000 Employees Presence in 190 countries, CHF 1.7 Billion CHF 91.
Slide 5: Nestlé Group: Largest food & beverages science and innovation network
Nestlé Group: Largest food & beverages science and innovation network Lausanne-Switzerland York-UK 31 ~2,400 R&D Centres across Patent Families 5 Continents R&D drives innovation and Nutrition, Dongguan-China Manesar- India Health & Wellness journey Investment of ~5,000 CHF 1.7 Billion Strong Team p
Slide 6: Nestlé India: Largest listed pure-play F&B company in India
Nestlé India: Largest listed pure-play F&B company in India Nestlé India (2018) Providing Safe, Quality Nutrition for More than 106 Years in India ~8,000 Employees 90,000+ Shareholders INR 992 Billion INR 112 Billion INR 24 Billion Market cap1 Sales Operating Profit INR 21 Billion INR 31 Billion Ope
Slide 7: Favorable market dynamics for processed food sector in India
Favorable market dynamics for processed food sector in India Market Composition1 Growth Drivers and Market Size (2018) (US$bn) $ • Fast growth in urban population • Increase in disposable income and propensity to spend Will lead to strong growth in the processed food sector in India with an increasi
Slide 8: Manufacturing citadels of Nestlé India
Manufacturing citadels of Nestlé India Moga (1961) Choladi (1967) Nanjangud (1989) Samalkha (1992) Instant Tea largely for exports Ponda (1995) Bicholim (1997) Pantnagar (2006) Tahliwal (2012) 7
Slide 9: Nestlé’s iconic brands winning with local consumers
Nestlé’s iconic brands winning with local consumers Category Brand Market Share (Value)¹ Nestlé Position Infant Cereals 96.3 1 Infant Formula2 67.5 1 Tea Creamer 44.9 1 Instant Noodles 59.1 1 Ketchups & Sauces 21.3 2 Instant Pasta 68.9 1 White & Wafers 61.9 1 Instant Coffee 50.5 1 Note: 1) A.C. Niel
Slide 10: Science and consumer driven innovation & renovation
Science and consumer driven innovation & renovation Health Comfort In Nutrition Between Meals Cooking Indulgence Aid Variety Taste Brought to market faster 9
Slide 11: Our Purpose and Values framework
Our Purpose and Values framework our purpose aligned actions and Enhancing quality of life and contributing to a healthier future communications as ONE Nestlé our values Values rooted in respect where we make impact FOR INDIVIDUALS & FAMILIES FOR OUR COMMUNITIES FOR THE PLANET Enabling healthier and
Slide 12: Living our Purpose
Living our Purpose Clean drinking Nestlé Global water facilities: Healthy Kids: Over 136,500 Over 280,000 beneficiaries beneficiaries Healthier Healthier Society People Engaging 100,000 milk, Enduring Healthier 2,500 coffee Partnerships and 1,250 Healthier Future spice Healthier farmers Businesses C
Slide 13: Living the Purpose through CSR
Living the Purpose through CSR For Individuals and Families For Our Communities For the Planet Enabling Healthier Helping Develop Thriving, Stewarding Resources for and Happier Lives Resilient Communities Future Generations Project Jagriti Encouraging Good Nutrition Creating Access to Reducing Water
Slide 14: Consistent growth with healthy margins to create economic value
Consistent growth with healthy margins to create economic value Sales of Products (INR Billion) Profit from Operations1 (INR Billion) CAGR on Comparable Basis XX % Profit from Operations % Profit from Operations on XX Comparable Basis 20.4 21.0 18.3 112 98 14.5 24 18 18 3 2001 2014 2018 2001 2014 20
Slide 15: Created significant value for investors
Created significant value for investors Market Capitalization Total Shareholders Return 1,869% Annualized Return 18.8% INR 1,071 Bn INR 50 Bn 2001 2018 INR Billion is INR 100 crore. Source: Bombay Stock Exchange. 14
Slide 16: Humbled by the recognition
Humbled by the recognition Forbes India Leadership Award for Best CEO – MNC Best Supplier Award ‘The Best CFO of a MNC – Large’ by YES BANK and Business World Leadership Unmatched ET Brand Equity Survey Rankings1 Quality 2016 2017 CSR Leadership Product The Brands Award 21 13 Brands India LOVES and
Slide 17: 2018 key highlights
2018 key highlights Reported Sales Full Year Profitability growth at 10.7%1 remained strong (Comparable 13.8%) Market Strong cash generation leadership in from operations. 85% of Portfolio2 Highest Ever Increased Dividend Domestic Sales growth Payout and Sustained is Volume Led and Value Creation fo
Slide 18: Domestic volume led growth
Domestic volume led growth Domestic Sales in INR Billion Milk Products and Nutrition Prepared Dishes and Cooking Aids Broad based growth in key brands; 4.7 7.7 Strong performance across MAGGI Good response to recent launches like 16.6 14.3 range; Robust growth in renovated CEREGROW, NAN Excella Pro,
Slide 19: Margins and cash flows
Margins and cash flows Profit from operations1 Operating Cash Flows Invested Capital2 EPS (INR bn) (INR bn) (INR bn) (INR) Margin (%) Margin (%) Return on Invested Capital2 (%) DPS (INR) Margin on Comparable Basis (%) Margin on Comparable Basis (%) 18.1 21.0 17.9 18.3 43.2 63.9 86 115 17.5 20.4 17.4
Slide 20: Harnessing opportunities through focused consumer clusters
Harnessing opportunities through focused consumer clusters Branch and State lens Consumer targeting influenced by past precedence and performance Zone East North NPD planning and launches based on legacy and West past performance South Current Construct The Action Planning Problem Performance Ahead
Slide 21: Recalibrating for future
Recalibrating for future Our approach: Standardize. Simplify. Share. Our goals: Support Demand Focused Organizations Leveraging Skills and Scale to Drive Agility Center of Center of Scale Competence (CoS) (CoC) Provide World Class Global Shareable Business Services Expertise Judgmental or and World-
Slide 22: Iconic brands, R&D and know-how: Our strong suits from Nestlé Group
Iconic brands, R&D and know-how: Our strong suits from Nestlé Group Unmatched bundle of IPR and Assistance compensated at arms-length Trademarks Know How: Know How: Assistance Technical Non-Technical Zone Management and Group Functions Strategic Business Units Research and Development 21
Slide 23: Over 90% of sales in India come from billionaire brands of Nestlé
Over 90% of sales in India come from 9 billionaire brands of Nestlé 22
Slide 24: Access to industry leading R&D…
Access to industry leading R&D… Nestlé Group has sustained R&D investment of CHF 1.7 Billion p.a. over time DISCOVER DEVELOP Nestlé Research: Nestlé Product Technology Centres Drives science and technology, from (NPTCs): basic nutrition and health research Scientific discoveries are translated into
Slide 25: …State-of-the-art research, patents and technology…
…State-of-the-art research, patents and technology… Nestlé Institute of Health Sciences Nestlé Institute of Medical Sciences Nestlé Institute of Food Safety Improving health through nutrition Making healthier the preferred and the tastier choice & Analytical Sciences Driving trust and innovation Sug
Slide 26: …Extensive library of technical know-how documents…
…Extensive library of technical know-how documents… Laboratory Instructions Quality Testing Methods Manufacturing Environment Sustainability Packaging Manufacturing Excellence Safety and Health Quality Management Operations instructions catalogue Recipe and Product Development Regulatory Affairs Raw
Slide 27: …Enabling best-in-class products and processes
…Enabling best-in-class products and processes Product Innovation and Renovation Manufacturing Technologies and Processes Salt, sugar, fat reduction Nutritious milk drink containing high quality whey proteins, DHA1, probiotics and Sodium immunonutrients, to support the overall growth and developme
Slide 28: Ongoing access to best practices across the value chain
Ongoing access to best practices across the value chain Comprehensive Repository of Best Practices, Tools, Standards Commercial Operations Support Functions Finance, HR, IT... Demand and Supply Planning HR Competency Framework Simplified Container Routine Early Code of Unbundlor Forecasting Shipment
Slide 29: Assistance from experts
Assistance from experts Coffee Extraction Cell Project Team Offsite Support (PTC-Orbe) Implementation especially Complex Projects Consistent Capability Building Learning Management System International Training and Conference Centre, Switzerland 28
Slide 30: Key takeaways: Nestlé India’s success
Key takeaways 1 Strong heritage built over 100 years in India 2 Powerful brands winning with local consumers A proven track record of sustained value creation for investors and 3 communities 4 Market with significant opportunity and potential Iconic brands, R&D, know-how & expertise provided by Nest
Slide 31: Q&A
Nestl@ Good Food, Good Life South Veg Masala, 62%: & Nestle S22, f€SOUCe’ B) high protein ox) Nestle. oe Maite nourish PS oe Af March 12, 2019