Nestle India Ltd. · NSE:NESTLEIND
Nestle India — Investor Presentation (October 2023)
69 slides from Nestle India's investor presentation, Oct 25, 2023
Slide 1: Nestlé India Limited – Stock exchange filing letter
Nestlé India Limited (CIN : L15202DL1959PLC003786) Nestlé House Jacaranda Marg, ‘M’ Block, DLF City, Phase – II Gurugram – 122002, Haryana Phone 0124 - 3940000 E-mail: investor@in.nestle.com Website www.nestle.in PKR:SG: 72:23 25 th October 2023 BSE Limited National Stock Exchange of India Limited P
Slide 2: Growing Together Consistently Today and Tomorrow
Growing Together Consistently Today and Tomorrow Analyst and Institutional Investors Meet, October 25, 2023 Mr. Suresh Narayanan, Chairman and Managing Director, Nestlé India
Slide 3: Disclaimer
Disclaimer • Except for the historical financial information contained herein, this presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward-looking statements. You are cautioned not to place undue reliance on these forward-looking
Slide 4: Today we will discuss
Today we will discuss Looking back – 2018 – What we promised and what we delivered Emerging, exciting, aspiring India – Rise of the new consumer cohort Our heartbeat 5 P’s – Purpose, People, Planet, Partnerships and Performance Key takeaways Analyst and Institutional Investor Meet, October 2023
Slide 5: Looking back – 2018
Looking back – 2018 Innovation Manage for “market share"-Our Key efficiency People, passion, at the core – growth > enhancement through progress Improvise but act! category growth Nestlé Business Excellence our way of life Speed, sharpness, Growth dimension- Clusters, micro targeting, Action engagem
Slide 6: Emerging, exciting, aspiring India
Emerging, exciting, aspiring India Rise of the new consumer cohort Analyst and Institutional Investor Meet, October 2023
Slide 7: Unlocking India – from promise to potential
Unlocking India – from promise to potential 5th Largest global economy 1.4 Billion Consumers 487 Million Addressable consumers Analyst and Institutional Investor Meet, October 2023
Slide 8: Rising middle class and consumption driven growth
Rising middle class and consumption driven growth Analyst and Institutional Investor Meet, October 2023
Slide 9: Rise of new India
Rise of new India Digital rise Infrastructural rise Consumer rise Entrepreneurial rise 1.2 Bio 29 Kms Road 3rd Highest unicorns 470 Mio Gen Z Mobile users built per day (Nos- 108) population 20 GB Per capita data 100 % Rural electrification 10 Bio Monthly 85 Bio Annual FDI consumption per month UPI
Slide 10: The “and” truth about India
The “and” truth about India Urban Rural Penetration Consumption 35% population 65% population Monthly category Per capita packaged food penetration ~ 10-50% China 4.2x, Philippines 3.3x Connected Premium Affordable Traditional 1.2 billion mobile users 30% Premium segment in nutrition 72% Macro snack
Slide 11: Lifestyle trends – brands, millennials and GenZ
Lifestyle trends – brands, millennials and GenZ Reelization Experiences, Natural, Experimentation Identity, fresh, sustainable 22% more personalization 43% 90 Mio engagement Urban households Instagram reels gets more 70% are open to experiment Health-conscious Seeking personalized individuals engage
Slide 12: Lifestyle trends – brands, millennials and GenZ
Lifestyle trends – brands, millennials and GenZ Trust Mindful Snacking Health and importance indulgence and variety wellness, hygiene 59% 68% 7/10 78% Trust on brand is an Consider themselves Taste – the most Snack more than important factor as more conscious important driver pre-covid eaters now So
Slide 13: Our Purpose
Our Purpose Unlocking the power of food to enhance quality of life for everyone, today and for generations to come Analyst and Institutional Investor Meet, October 2023 x
Slide 14: Our heartbeat - the 5 Ps
Our heartbeat -the 5 Ps Purpose, People, Planet, Partnerships, Performance Analyst and Institutional Investor Meet, October 2023
Slide 15: Our roadmap – focus and growth
Our roadmap– focus and growth Growth Model Analyst and Institutional Investor Meet, October 2023 Images used as reference
Slide 16: Nestlé’s India story
Nestlé’s India story Legacy of 110+ years India one of the fastest 8,000+ 194,000+ of safe, quality nutrition growing markets for Nestlé Employees Shareholders 10th Factory 10,000 + 5.2 + million outlets 108% 10 million+ beneficiaries to be set up in Odisha Distributors & redistributors Total reach
Slide 17: Our brand footprint in India
Our brand footprint in India 12 Billion cups 5 Billion serves 3,300 Million fingers 29 Million tins 700+ One Nestlé Kiosks 12+ Million footfalls 2,200 Million units 12 Billion packs reaching homes. Serving families. Touching lives. Analyst and Institutional Investor Meet, October 2023
Slide 18: Bringing purpose to life through powerful brands
Bringing purpose to life through powerful brands ~ 125 new products launched World class safety and in last 7 years, contributing to 10 new projects in the quality guaranteed pipeline 6% of sales Analyst and Institutional Investor Meet, October 2023
Slide 19: Bringing purpose to life by recalibrating innovations
Bringing purpose to life by recalibrating innovations Integrating millets into our products to enhance quality of life Good for you Good for environment Good for farmers High in fiber Requires less water Climate-smart crop Lower in calories Lesser carbon footprint More resistant to pests High on nut
Slide 20: Bringing purpose to life through social impact
Bringing purpose to life through social impact • Nutrition awareness • Water, sanitation and hygiene 25 states and union Education Touching 10 Mio lives • territories in India • Environment • Rural development Analyst and Institutional Investor Meet, October 2023
Slide 21: People – The soul of our business
People The soul of our business Analyst and Institutional Investor Meet, October 2023 Analyst and Institutional Investor Meet, October 2023
Slide 22: Diversity as a force for good
Diversity as a force for good Diverse workforce Empowered women - charting Nestlé’s future New parental leave policy • 50% of the Board of Directors are • Women are key part of the management, salesforce and factories • 26 weeks leave for primary women • Empowerment with safer and hygienic choices f
Slide 23: Sanand – the bedrock of diversity
Sanand – the bedrock of diversity 95% of the workforce are less More than 60% of the 12 people with disabilities than 40 years of age workforce are women work on the production line Analyst and Institutional Investor Meet, October 2023
Slide 24: Sanand – a glimpse of our diversity
Sanand – a glimpse of our diversity VIDEO Analyst and Institutional Investor Meet, October 2023
Slide 25: Planet – Committed to a sustainable future
Planet Committed to a sustainable future Analyst Analyst and Institutional and Institutional Investor Investor Meet,Meet, October October 20232023 x
Slide 26: 4 facets of our sustainability journey
4 facets of our sustainability journey Packaging Climate Responsible sourcing Water Analyst and Institutional Investor Meet, October 2023
Slide 27: Committed to a sustainable future
Committed to a sustainable future 6x investments in ~60 people engaged on Working with 10 direct Sustainability (2023 vs 2020) sustainability and indirect partners Analyst and Institutional Investor Meet, October 2023
Slide 28: Our ambition - Making sustainable choices
Our ambition - Making sustainable choices Stubble briquettes to be used in Coal free manufacturing Fossil fuel free manufacturing locations by mid Moga factory to reduce locations by mid 2024 2025 stubble burning Analyst and Institutional Investor Meet, October 2023
Slide 29: Committed to managing plastic responsibly
Committed to managing plastic responsibly EPR of 23,300 tonnes All our brands are plastic Brand-led initiatives to address in 2022 neutral for past 3 years plastic waste Analyst and Institutional Investor Meet, October 2023
Slide 30: Committed to sustainable agriculture – dairy
Committed to sustainable agriculture – dairy Multiple interventions to ~100,000 dairy farmers ~340 Mio kilograms of milk reduce GHGE in dairy value engaged collected last year chain Analyst and Institutional Investor Meet, October 2023
Slide 31: Committed to sustainable agriculture
Committed to sustainable agriculture Analyst and Institutional Investor Meet, October 2023
Slide 32: Committed to sustainable agriculture – coffee
Committed to sustainable agriculture – coffee Nescafé Plan celebrates 10+ ~5,000 coffee farmers ~55% coffee procured years engaged sustainably Analyst and Institutional Investor Meet, October 2023
Slide 33: Committed to sustainable agriculture
Committed to sustainable agriculture VIDEO Analyst and Institutional Investor Meet, October 2023
Slide 34: Committed to sustainable agriculture – spices
Committed to sustainable agriculture – spices ~1,250 spice farmers Focus on 3Ps – People, ~100% traceability of cumin, coriander, chilly and engaged across 8 states Planet, Profitability turmeric Analyst and Institutional Investor Meet, October 2023
Slide 35: Committed to sustainable manufacturing
Committed to sustainable manufacturing GHG emissions 52% Water usage 51% Wastewater generation 38% Energy usage 36% *For the period 2007-2022 Analyst and Institutional Investor Meet, October 2023
Slide 36: Committed to sustainable logistics
Committed to sustainable logistics Better payload utilization from Increased use of railways from Introduction of LNG fleet Higher usage of CNG and 0.2% to 6% in last 3 years 90.3% to 94% in last 3 reducing CO2 emissions electric vehicles years Analyst and Institutional Investor Meet, October 2023
Slide 37: Partnerships – Growing together to go far
Partnerships Growing together to go far Analyst and Institutional Investor Meet, October 2023 Analyst and Institutional Investor Meet, October 2023 x
Slide 38: Growing together our distributor network
Growing together our distributor network ~470 Distributors with more than 10 ~360 Distributors with more than More than 2,000 distributors years of association 20 years of association Analyst and Institutional Investor Meet, October 2023
Slide 39: Trustworthy partnerships with our distributors
Trustworthy partnerships with our distributors V.G.Rajamani Agencies Turnover growth from INR 3.6 Caters to more than 600 retail Coimbatore partnership of over 60 years Lakhs to INR 40 Crore per annum outlets Analyst and Institutional Investor Meet, October 2023
Slide 40: Nurturing relationships - our Swabhimaan network
Nurturing relationships - our Swabhimaan network More than 1,600 women Generate business worth INR Across 14 states entrepreneurs 80 Mio* * Till 30th Sept 2023 Analyst and Institutional Investor Meet, October 2023
Slide 41: Nurturing relationships – RURBAN story
Nurturing relationships – RURBAN story More than 18,000 haat More than 16,000 Coverage across 7,405 activities Distribution touchpoints towns Analyst and Institutional Investor Meet, October 2023
Slide 42: Strong long-term relationships – our supplier network
Strong long-term relationships – our supplier network More than 3,000 suppliers with more More than 4,500 suppliers than 10 years of association Analyst and Institutional Investor Meet, October 2023
Slide 43: Strong long-term relationships – our supplier network
Strong long-term relationships – our supplier network Paras Spices Pvt. Ltd. – A Turnover of INR 650 Exporting to USA, UK, Middle East , Sri Lanka and partnership of over 40 years crore per annum Bangladesh Analyst and Institutional Investor Meet, October 2023
Slide 44: Integrating technology to strengthen partnerships
Integrating technology to strengthen partnerships Simplification and Marketing and Nesmitra - Retailer self consolidation Consumer Insights order application Analyst and Institutional Investor Meet, October 2023
Slide 45: Performance – Consistent Collaborative Committed
PERFORMANCE Consistent Collaborative Committed Analyst and Institutional Investor Meet, October 2023 x Analyst and Institutional Investor Meet, October 2023
Slide 46: 10 years of strong domestic sales growth
10 years of strong domestic sales growth 20.0 14.8 162 13.5 15.1% 162 15.0 10.9 10.9 10.7 142 15.0% 8.6 8.2 8.5 7.1 142 10.0 122 122 5.0 102 102 - (18.3) 82 82 (5.0) 62 62 (10.0) 42 42 (15.0) 22 22 (20.0) 84 92 75 88 95 105 117 126 140 161 120 139 2 (25.0) 2 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 47: Strong volume growth
Strong volume growth 700 600 502 500 402 400 CAGR 2018-22 302 300 6.7% 202 200 102 100 424 457 468 522 550 423 430 0 2 2018 2019 2020 2021 2022 9M 2022 9M 2023 Domestic Sales ('000 tonnes) Domestic Sales ('000 tonnes) Analyst and Institutional Investor Meet, October 2023
Slide 48: Leading to sustained value growth
Leading to sustained value growth 20.0 14.8 162 15.1% 162 15.0 10.9 10.9 10.7 142 15.0% 142 8.5 10.0 122 122 5.0 102 - CAGR 102 82 2018-22 82 (5.0) 62 11.3% 62 (10.0) 42 42 (15.0) 22 22 (20.0) 105 117 126 140 161 120 139 2 2 (25.0) 2018 2019 2020 2021 2022 9M 2022 9M 2023 Domestic Sales (INR bio) Re
Slide 49: Changing fortunes of Nestlé India
Changing fortunes of Nestlé India 162 Mega City 162 Metro 142 142 122 122 102 102 82 82 62 62 42 42 22 22 100 104 104 122 112 130 120 130 100 118 109 118 121 153 143 155 2 2 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 202
Slide 50: Changing fortunes of Nestlé India
Changing fortunes of Nestlé India 162 TC 1 162 TC 2-6 Villages 202 142 142 122 122 152 102 102 82 82 102 62 62 42 52 42 22 22 100 116 111 121 119 123 117 122 100 109 109 121 105 128 122 127 100 119 133 126 126 168 166 177 2 2 2 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'21 Q1'22 Q2'22 Q3'22
Slide 51: Acceleration of our route to market – strengthening our distribution
Acceleration of our route to market – strengthening our distribution Total Reach (Nielsen) Indirect Nestle Direct Reach 5.2 9M 2023 3.6 1.6 5.1 2022 3.6 1.5 5.1 2021 3.7 1.4 4.7 2020 3.3 1.4 4.6 2019 3.3 1.3 4.5 2018 3.2 1.3 4.2 2017 # 2.9 1.3 4 2016 2.7 1.3 Analyst and Institutional Investor Meet,
Slide 52: Deepening Rural reach
Deepening Rural reach 200,000 120,000 100,000 Ambition 150,000 120,000 80,000 Villages by 2024 100,000 60,000 40,000 (Population over 2,000) 50,000 68,578 110,200 165,367 191,395 20,000 40,739 61,427 91,683 107,844 - 2020 2021 2022 9M 2023 - 2020 2021 2022 9M 2023 Total Village Coverage Villages > 2
Slide 53: Increased presence in RURBAN
Increased presence in RURBAN 1. Strengthened distribution infrastructure Distribution Touch Points 20,000 18,000 16,000 835 14,000 743 12,000 735 8,218 10,000 685 7,946 7,543 8,000 6,000 6,901 4,000 2,000 3,301 3,980 6,123 8,013 - 2020 2021 2022 9M 2023 Wholesale hubs Re-distributors Cash Distributo
Slide 54: Increased feet on the street in RURBAN
Increased feet on the street in RURBAN 2. Increased feet on the street Feet on the street 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 2,211 2,419 3,020 3,141 - 2020 2021 2022 9M 2023 Feet on the street Analyst and Institutional Investor Meet, October 2023
Slide 55: Increased visibility in RURBAN
Increased visibility in RURBAN 3. Increased in-shop visibility RURBAN Smart Stores 20,000 15,000 10,000 5,000 3,486 9,728 16,000 19,300 - 2020 2021 2022 9M 2023 RURBAN Smart Stores Analyst and Institutional Investor Meet, October 2023
Slide 56: Increased activation in RURBAN
Increased activation in RURBAN 4. Increased HAAT activation HAAT Activity as Consumer Engagement 20,000 15,000 10,000 5,000 2,502 20,605 18,331 - 2021 2022 9M 2023 HAAT activation Analyst and Institutional Investor Meet, October 2023
Slide 57: Consistent media support
Consistent media support Improved Strong investment behind efficiencies in the growth-pillars buying media Targeted communication leveraging consumer clusters 1.0x 1.4x 1.5x 1.5x 1.5x 1.4x 1.3x Investing in building 2017 2018 2019 2020 2021 2022 9M 2023 brand equity Accelerated digital spend vs A&SP
Slide 58: Domestic sales: strong, double digit across all product groups
Domestic sales: strong, double digit across all product groups Milk Products Prepared Dishes And Out of Home Powdered And Liquid And Confectionery Cooking Aids Beverages Nutrition 40.5% 31.6% 16.8% 11.1% Contribution Contribution 30% Contribution Contribution Growth 15.3% 10.7% 21.4% 18.6% Growth Gr
Slide 59: Rapidly accelerating our footprint on e-commerce
Rapidly accelerating our footprint on e-commerce 10 9 8 7 6.5 6.6 6 5.3 E-Commerce grew by 20% 5 4 3.7 3 9M 2023 vs 9M 2022 1.9 1.3 2 0.9 1 1 - 2016 2017 2018 2019 2020 2021 2022 9M 2023 E-commerce contribution % Analyst and Institutional Investor Meet, October 2023
Slide 60: Innovations now contribute over 6% of sales
Innovations now contribute over 6% of sales 10.0 10,002 9.0 8.0 8,002 6.1 7.0 5.4 Over 125 new 6.0 6,002 4.9 4.4 4.3 5.0 3.4 4.0 products in last 7 2.7 years 4,002 3.0 2,002 1.5 2.0 1.0 2 - 2016 2017 2018 2019 2020 2021 2022 9M 2023 NPDI Sales (INR mio) % contribution to domestic sales 10 new projec
Slide 61: Sustained profit from operations
Sustained profit from operations 25.0 25.0 42 21.7 22.0 42.0 21.4 21.0 21.1 37 20.0 37.0 19.7 20.0 20.0 32 32.0 27 15.0 CAGR 27.0 15.0 22 2018-22 22.0 10.0 10.0 17 17.0 12 5.0 9.4% 12.0 5.0 7 7.0 24 26 29 32 34 24.7 31.0 2 - 2.0 - 2018 2019 2020 2021 2022 9M 2022 9M 2023 Profit from Operations (INR
Slide 62: Leading to sustained net profit
Leading to sustained net profit 25.0 25.0 42 42.0 37 37.0 20.0 20.0 32 16.0 15.7 32.0 16.2 14.3 14.4 14.2 14.0 CAGR 15.0 15.0 27 27.0 22 2018-22 22.0 10.0 10.0 17 17.0 12 5.0 10.4% 12.0 5.0 7 7.0 16 20 21 21 24 17.6 23.4 2 - 2.0 - 2018 2019 2020 2021 2022 9M 2022 9M 2023 Net Profit (INR bio) Net Pro
Slide 63: Thereby, creating significant value for investors
Thereby, creating significant value for investors Total Shareholders Return (2001-2023) 4,292% Market Capitalization INR 2,170 Bio Annualized Return (2001-2023) INR 50 Up 43.6 times vs. FMCG Benchmark Index 20.0 times 19.0% Bio 2023* USD 26.1 Bio 2001 (1 USD= INR 83.0) USD 1.1 Bio (1 USD= INR 47.2)
Slide 64: Looming challenges
Looming challenges Milk SMP Edible Oils 168 172 +72% 159 +89% 160 +60% 143 134 135 202 189 126 127 142 117 100 104 100 100 100 Milk SMP Edible oils 20% 7% 12% Wheat Green Coffee Packaging 131 147 +31% 123 +47% +25% 132 136 109 109 125 104 119 100 100 102 100 100 101 100 98 Wheat Coffee Packaging 11%
Slide 65: Lessons learnt from navigating challenges
Lessons learnt from navigating challenges Accelerated ~10,000 projects since 2011 on cost Alignment, courage and economies of scale and sharp reduction, enhanced efficiency and speed exceptional teamwork procurement strategies of making decision SHARK saving programme Calibrated consumer insight-bas
Slide 66: 10 Mantras to define our future
10 Mantras to define our future Expanding Consistent balance Strong investments in the opportunities between growth manufacturing and with new consumer and profitability supply chain cohort Analyst and Institutional Investor Meet, October 2023
Slide 67: 10 Mantras to define our future
10 Mantras to define our future Embracing Expanding and Invest in long term the power of accelerating RURBAN partnerships analytics and thrust digitization Analyst and Institutional Investor Meet, October 2023
Slide 68: 10 Mantras to define our future
10 Mantras to define our future Accelerating our Focus on people - Nutrition as Enable strong sustainability diversity, talent, a platform impact on journey generational shift for innovation communities Analyst and Institutional Investor Meet, October 2023
Slide 69: Consistency Collaboration Commitment
Consistency Collaboration Commitment …Our Promise. Analyst and Institutional Investor Meet, October 2023 x