Slide 1: Welcome to the Full-Year 2016 Conference
Welcome to the Full-Year 2016 Conference 1 | February 16, 2017 | Nestlé Full-Year Results 2016
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 2016 Results – Mark Schneider, Nestlé CEO
Full-Year 2016 Results Mark Schneider, Nestlé CEO 3 | February 16, 2017 | Nestlé Full-Year Results 2016
Slide 4: Key messages
Key messages ˙ 2016 – Organic Growth at higher end of industry, at lower end of our expectations – Solid operating margin improvement ˙ 2017 and mid-term – Continuity and change – Organic Growth remains key to long-term value creation – Continued focus on operating efficiency 4 | February 16, 2017 |
Slide 5: 2016 performance highlights
2016 performance highlights Sales Organic Real Internal TOP Growth Growth Margin CHF 89.5 bn +3.2% +2.4% +30 bps in constant currency 5 | February 16, 2017 | Nestlé Full-Year Results 2016
Slide 6: Continuity and change
Continuity and change – Nutrition, Health and Wellness strategy – Committment to long-term value creation – Prudent approach to M&A – Focus on people and leadership – Transparency with all stakeholders – Making choices, fast execution 6 | February 16, 2017 | Nestlé Full-Year Results 2016
Slide 7: Organic Growth key to long-term value creation
Organic Growth key to long-term value creation Expect mid-single digit Organic Growth by 2020 – Invest selectively to support fast-growing categories and regions – Address low-growth businesses – Product and business model innovation – Embrace digital opportunities – Portfolio management 7 | Februar
Slide 8: Continued focus on operating efficiency
Continued focus on operating efficiency – Leverage existing efficiency culture – Expect increasing restructuring cost – At least 200 basis points structural cost savings* target by 2020 - partial reinvestment to drive Organic Growth – Focus areas: • Non-customer facing structural costs • Capacity ut
Slide 9: Outlook 2017
Outlook 2017 – Organic Growth of 2 to 4% – Increased restructuring cost of CHF ~500 mio to drive future profitability – As a result, stable Trading Operating Profit margin* in 2017 – Underlying EPS* growth and improved capital efficiency *In constant currency 9 | February 16, 2017 | Nestlé Full-Year
Slide 10: Full-Year 2016 Results – François-Xavier Roger, Nestlé CFO
Full-Year 2016 Results François-Xavier Roger, Nestlé CFO 10 | February 16, 2017 | Nestlé Full-Year Results 2016
Slide 11: Increasing RIG, margin expansion, strong cash flow
Increasing RIG, margin expansion, strong cash flow Growth TOP Margin* Free Cash Underlying Flow EPS* OG +3.2% +30 bps CHF +3.4% 10.1 bn RIG +2.4% +20 bps reported 11.3% of sales +2.7% reported *In constant currency 11 | February 16, 2017 | Nestlé Full-Year Results 2016
Slide 12: Quality growth: Organic Growth driven by Real Internal Growth
Quality growth Organic Growth driven by Real Internal Growth 5% % OG 4% 3% % Pricing 2% 1% % RIG 0% Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q16-16 Q2-16 Q3-16 Q4-16 12 | February 16, 2017 | Nestlé Full-Year Results 2016
Slide 13: Quality growth: Broad-based RIG and OG across geographies
Quality growth Broad-based RIG and OG across geographies AMS EMENA AOA Sales 40.2 bn 26.8 bn 22.5 bn (in CHF) RIG +2.0% +2.4% +3.0% OG +4.5% +1.9% +2.8% Each geography includes Zones, Nestlé Waters, Nestlé Nutrition, Nestlé Professional, Nespresso, Nestlé Health Science and Nestlé Skin Health 13 | F
Slide 14: Quality growth: Growth in Developed and Emerging markets
Quality growth Growth in Developed and Emerging markets Developed Emerging Sales (in CHF) 52.1 bn 37.4 bn % of group sales 58% 42% RIG 2.3% 2.4% FY15 2.2% 2.2% OG 1.7% 5.3% FY15 1.9% 7.0% 14 | February 16, 2017 | Nestlé Full-Year Results 2016
Slide 15: Quality growth: 30% of sales from innovated or renovated products
Quality growth 30% of sales come from products innovated or renovated in the last 3 years Premiumisation Nutrition and Added-value Science Les Recettes de l’Atelier Nescafé Gold Barista Nido FortiGrow ProNourish Nespresso Vertuoline Coffee-mate Natural Bliss Milo ready-to-drink Wyeth Illuma 15 | Feb
Slide 16: Quality growth: Leading in eCommerce
Quality growth Leading in eCommerce eCommerce as a % of Group Sales 4.9% eCommerce Sales (FY15 vs FY16) 2.9% Group +18% Group (Excluding Nespresso) +34% 2012 2016 16 | February 16, 2017 | Nestlé Full-Year Results 2016
Slide 17: Trading Operating Profit +30 bps in constant currency
Trading Operating Profit +30 bps in constant currency +80 bps -60 bps +10 bps 13.7% Investments: Savings: - Marketing - NCE - Restructuring - Commodities 15.1% - Portfolio Management 15.4% +130 -30 +20 (+x) (+x) (+x) (+x) (+x) (+x) TOP COGS & Marketing & Currency TOP FY 2015 Distribution Administrat
Slide 18: Continued focus on working capital
Continued focus on working capital Working capital as a % of sales, calculated on a 5-quarter average 8.5% 6.5% 5.3% 4.7% 2.8% 2012* 2013 2014 2015 2016 *Re-stated 18 | February 16, 2017 | Nestlé Full-Year Results 2016
Slide 19: Consistent industry-leading free cash flow generation
Consistent industry-leading free cash flow generation Free cash flow as a % of sales 11.3% 11.2% 11.0% 10.9% 10.2% 2012* 2013** 2014*** 2015 2016 *Re-stated ** Adjusted for exceptional income due to Givaudan disposal (CHF 1.1 bn) 19 | February 16, 2017 | Nestlé Full-Year Results 2016 ***Adjusted for
Slide 20: 2017 focus
2017 focus 2017 Priorities 2017 Guidance – Maintain volume growth – Organic Growth of 2 to 4% – Secure pricing – Increased restructuring costs to drive future profitability – Cost discipline – As a result, stable Trading – Capital efficiency Operating Profit margin* in 2017 – Underlying EPS growth*,
Slide 21: Full-Year 2016 Results: Discussion
Full-Year 2016 Results Discussion 21 | February 16, 2017 | Nestlé Full-Year Results 2016