autumn press conference - nestlé...| 22 october 2009 | autumn press conference micronutrient...

22 October 2009 | Autumn Press Conference

Autumn PressConference

Paul Bulcke

Chief Executive Officer

Nestlé S.A.

| 22 October 2009 | Autumn Press Conference

Richard Laube

2

John Harris Laurent Freixe Luis Cantarell Frits van Dijk Jim Singh


Francisco Castañer

3

Werner Bauer José Lopez Petraea HeynikeRobin Tickle Marc Caira

22 October 2009

James Singh

Chief Financial Officer

22 October 2009 2009 nine month sales5

+1.0%

RIG

+2.6%

Pricing &

Others

Acq &

Divest.

Foreign

Exchange

Total Group

•Sales : CHF 79.5 bio

•Organic Growth : +3.6%

•Evolution in Constant Currency : +3.0%

•Total Evolution : -2.2%

-0.6%

September Year To Date 2009 Results

-5.2%


+0.7%

+2.8%

Food & Beverages

•Sales : CHF 73.7 bio

•Organic Growth : +3.5%

•Evolution in Constant Currency : +2.8%

•Total Evolution : -2.7%

September Year To Date 2009 Results

RIG Pricing &

Others

Acq &

Divest.

Foreign

Exchange

-0.7%

-5.5%


% RIG Total Group

-0.1

0.1

0.7

Accelerating trend to continue in final quarter

Dynamics of Growth: RIG driving momentum

Jan-Mar 09 Jan-Jun 09 Jan-Sep 09

% RIG F&B

1.0

0.5

0.3


-14.0

-11.8

-9.6

-7.4

-5.2

-3.0

-0.8

1.4

3.6

5.8

8.0

10.2

12.4

14.6

16.8

19.0

21.2

23.4

25.6

27.8

30.0

Billionaire BrandsOG % YTD Sep 2009

Represents over 75% of Total F&B Sales

72% growing faster than Group average.Virtually all brands showing improving performance during the course of the year.

http://webappps2.hq.nestle.com/appl_Bcom/Search/shFamilyPreview.asp?CORP=189&BRD=432&GotoPage=1&SO=2&FAM=5821

http://webappps2.hq.nestle.com/appl_Bcom/Search/shFamilyPreview.asp?CORP=189&BRD=432&GotoPage=1&SO=2&FAM=5821

http://webappps2.hq.nestle.com/appl_Bcom/Search/shFamilyPreview.asp?BRDSelect=-1&TXTCat=Beverages&CatId=75&OTSelect=-1&TXTKey=&TXTKey2=&TXTRef=&TXTName=&TXTDesc=&Action.x=7&Action.y=9&GotoPage=1&SO=1&FAM=278

http://webappps2.hq.nestle.com/appl_Bcom/Search/shFamilyPreview.asp?BRDSelect=-1&TXTCat=Beverages&CatId=75&OTSelect=-1&TXTKey=&TXTKey2=&TXTRef=&TXTName=&TXTDesc=&Action.x=7&Action.y=9&GotoPage=1&SO=1&FAM=278


Branded Active Benefits

RB TM

B TM

B TM

PROTECTUS TM

PROTECTUS TM

PROTECTUS TM

A range of 8 Benefit Platforms, growing above Group F&B average

2009 YTD Organic Growth 4 %

2009 Sales will once again exceed CHF 4 billion


2009 YTD Organic Growth

Popularly Positioned Products

12 %

2009 Sales of monitored activities approaching CHF 7 billion


Nespresso Present in over 50 countries

CHF 3 billion Sales milestone achievement in sight!!

2009 YTD Organic Growth 28 %


2009 YTD Organic Growth

Dolce Gusto 3 million machines sold in 20 marketsof which 6 new markets in 2009

2009 Sales approaching CHF 300 million

> 50%


Emerging Markets

Emerging Markets (incl. BRIC)

33 % of our total F&B sales

2009 YTD Organic Growth 7.5%

BRIC Markets

10 % of our total F&B sales

2009 YTD Organic Growth 9.9%


0.0

Other F&B

7.47.2

ZoneEurope

16.5

ZoneAmericas

23.4

ZoneAOA

11.7

NestléNutrition

7.5

Total F&B

73.7

NestléWaters

% RIG

% Organic Growth

2.8

6.2

-1.5

2.3

3.0

-1.5

0.7

6.4

5.8

-1.8

2.0

3.5

-2.3

Operating Segments: F&B

Sales

(CHF bn)

Operating Segments: RIG Acceleration in Q3


Other F&B

ZoneEurope

ZoneAmericas

ZoneAOA

NestléNutrition

Total F&BNestléWaters

% RIG Jan-Sept 2009

% RIG Jan-June 2009

-1.5

1.92.2

-3.7

-2.4

2.4

0.1

-1.5

2.3

3.0

-2.3

-1.5

2.8

0.70 bps

+40 bps

+80 bps

+140 bps +90 bps

+40 bps

+60 bps

Improvement over HY


Other Product Segments

-1.6

Sales

(CHF bn)

Prep. Dishes

& Cooking Aids

12.4

Powdered &Liquid Bev.

14.0 14.9

Milk products& Ice Cream

Confectionery

8.2

PetCare

9.6

Pharma

5.8

-0.5

0.7

5.3

-0.2

3.2

5.5

9.8

0.0

4.0

8.8

5.9

% RIG

% Organic Growth


Other initiatives

SKU Rationalization

Working Capital Reduction

Savings in excess of CHF 1.0 bn

On target for 10% reduction

On target


• Advertising and Promotion: Increasing consumer facing marketing spend as we progress

• Input Cost for 2009: about +2%

• Capital expenditure: Total Group about 4.5% of sales

• Net Financing Cost: equal or below CHF 1 billion

• Underlying tax rate: Total Group around 27%

Outlook


Capital efficiency

• Share Buy-back acceleration in 2009

• Additional CHF 3 bio to reach CHF 7 bio

• Cash returned to Shareholders

• About CHF 40 bio in 4 years

• Strong Credit Quality

• Moody's : Aa1

• S&P : AA

• Fitch : AA+

3.5 bio 4.0 bio 4.6 bio 5.0 bio

Dividends Share Buy-back

8.7 bio

4.4 bio2.7 bio

7.0 bio6.2 bio8.4 bio

13.3 bio 12.0 bio

2006 2007 2008 2009E


• 2009 9 months In line with guidance: RIG acceleration as promised

• Full year 2009 guidance unchanged: Volume-driven organic growth to accelerate in H2Full year EBIT margin improvement in constant currencies

• Capital structureShare buyback increased from CHF 4 billion to CHF 7 billion

Summary of Key Points



Paul Bulcke


Nestlé S.A.


Total performance over 3 years

22

Sales*

+ 27%

EBIT*

+ 43%

EBIT margin reported

+ 130 bps

*constant currencies



23

Capital expenditure

CHF 14 billion

Acquisitions

CHF 15 billion

Total investment

CHF 29 billion



24

Share buy-back

CHF 16 billion

Total cash returned to shareholders

CHF 28 billion

Dividend payments

CHF 12 billion


Total performance

•Top and bottom lines

•Capital efficiency

•Operational discipline

• Investing for growth

•Responsible and sustainable business

25

Nestlé Roadmap

| 22 October 2009 | Autumn Press Conference26

Competitive advantages

Growth driversOperational pillars

Unmatchedproduct

and brand portfolio

Nutrition, health and wellness

Innovation & renovation

Unmatchedgeographic presence

Out-of-home leadership

Whenever,wherever,

however

Unmatched R&D capability

Emergingmarkets and

popularly positioned products

Operationalefficiency

People,culture, values and attitude

PremiumisationConsumercommunication

Our ambitionBe the recognized

leading NHW companyBe a reference for

financial performanceTrusted by

all stakeholders

Unmatchedproduct

and brand portfolio





Whenever,wherever,

however


Emergingmarkets and








all stakeholders

Nestlé Roadmap





all stakeholders



Unmatched

product and brand portfolio


Unmatched

presencegeographic

People,

culture, values and attitude


Nestlé Roadmap



Nestlé Roadmap

Growth drivers


Emergingmarkets and



Premiumisation


Nestlé Roadmap

Operational pillars

Innovation

& renovation


Whenever,wherever, however

Consumercommunication

Nestlé Roadmap




Unmatchedproduct

and brand portfolio





Whenever,wherever,

however


Emergingmarkets and








all stakeholders


Building for growth

•Production capacity

•New technologies

•R&D capabilities

• Innovation and renovation

•Consumer-facing brand support

32


Investment in manufacturingReady-to-drink factory in Anderson, USA

33


Investment in manufacturingNespresso Production and Distribution Centre, Avenches, Switzerland

34


Investment in manufacturingTotole bouillon factory in Shangai, China

35


Investment in Research and DevelopmentR&D Centre in Abidjan, Côte d’Ivoire


Investment in Research and DevelopmentResearch Centre in Tokyo, Japan

en attente


Investment in Research and DevelopmentChocolate Centre of Excellence, Broc, Switzerland


Investment in Research and DevelopmentCereal Innovation Centre in Orbe, Switzerland


Investment in Research and Development28 centres, 5000 people


Investment in brandsNescafé

41


Investment in brandsNestlé Purina

42


Investment in brandsNescafé Dolce Gusto


Investment in PPP initiatives

44


Nestlé affordable, nutritious foods in 19th Century


Micronutrient deficiencies

46

Malnutrition35% of deaths in children under 5 years

Micronutrient DeficienciesThe " Big 4 " affecting over 1/3rd of the world’s population

Iron 1.6 bio people

– 293 mio preschool-age children

– 524 mio women

Cognitive development

Physical performance

Immunity

Vitamin A 190 mio preschool-age children

19 mio pregnant women

Vision

Immunity

Iodine 35% of world population has inadequate

iodine intake

– 285 mio school children

Cognitive development

Zinc Widespread Immunity

Growth

Sources: World Health Organization: http//:www.who.int/en Food and Nutrition Bulletin, 2004, The United Nations University

http://www.who.int/en

http://www.who.int/en


Fortification mapping: Data collection

47

Major fortified categories

– Ambient Dairy (CHN, AHN, AFC)

– CPW

– MILO & Nesquik/Nescau

– Maggi (Cubes, Fixes, Noodles, Soups)

– NN/Infant Nutrition (Cereals)

Zone/Regional basis:

– AOA: Africa Asia and Oceania, Middle East

– AMS: Latin America, North America

– EUR: Eastern Europe, Western Europe


Maggi around the world

48

Iodine fortification Additional potential for Iodine fortification

94% of MAGGI volumes*are fortified with iodine (90 bio servings)*Bouillons, seasonings, noodles, fixes

1.3 Bio iodized servings

15 Bio iodized servings





Seasoning India (Vit.A, Iron, Iodine)

Seasoning Vietnam (Iron, Iodine)

Noodles India (Iron, Iodine)

Seasoning dispenser Turkey (Iron, Iodine)

MAGGI now addressing other deficiencies (Iron, Vitamin A)

draft packagingNew launches (Iron / Vit.A)


Nestlé focus on fortification

Food fortification has the dual advantage

of being able to deliver nutrients to

large segments of the population

without requiring radical changes

in food consumption patterns

49

Guidelines on food fortification with micronutrients, WHO/FAO, 2006.


Micronutrient fortification of Nestlé products

50

Micronutrient-fortified

affordable milks available

in 60 countries in 2009(up from 40 in 2008:

Projection 70 at end 2010)

2008: 20 bio servings

of fortified dairy products

(iron, vitamin A, zinc)

Micronutrient-Fortified Nestlé products in 2008

Iron: 44 bio servings

Iodine: 90 bio servings

Vitamin A: 29 bio servings

Zinc: 13 bio servings


Creating Shared Value

51


Chocolate and Confectionery


Autumn Press Conference

Petraea Heynike

Executive Vice President

Marketing and Sales


Streamlining and refocus of products and brands

54

9-month organic growth

+ 4.0%

Half-year EBIT margin

+ 60 bps


Chocolate and Confectionery

55

• 152 products, representing 77 brands, are number one or number two

0

25

50

75

100

Chocolate and confectionery sales

Nestlé sales primarily local

Local products and brands

70%

Global products and brands

• 45 brands with 110 chocolate count line top 10 positions


KitKat

56


KitKat Japan: E-shop on Rakuten Ichiba

57


KitKat Japan

58

キットカツ = surely win


Growth of chocolate business

59


Chotu Munch

60


Chocolate Centre of Excellence

61


Growth of dark chocolate and premium


Worldwide shortage of cocoa beans


Nestlé experimental farm in Ecuador


Nestlé Research Centre, Abidjan, Côte d’Ivoire


Nestlé Research Centre, Tours, France


5 million cocoa farmers worldwide


Over the past 15 years

17 million coffee and cocoa tree plantlets

Over the coming 10 years

38 million coffee and cocoa tree plantlets


The Cocoa PlanOur commitment to cocoa sustainability

69


CHF 60 million


CHF 110 million


Nestlé Cocoa Plan consumer website

70


Coffee sustainabilityOur commitment

71


CHF 200 million invested


CHF 350 million


Nestlé cocoa and coffee sustainability activities

72

All cocoa and coffeecombined investment for next 10 years

CHF 460 million



Paul Bulcke


Nestlé S.A.


Nestlé Sustainable Agriculture Initiative

74


Millions of farmers have received free technical assistance


Nestlé Sustainable Agriculture Initiative

75

Today

600 000 farmers receive free technical assistance


Investment in sustainability projects 2009

76

CHF 250 million

• Renewable energies

•Water usage

•Carbon footprint

• Factories and operations


Investment in bottle light-weighting

77

EcoShape bottle in USA

Savings of more than

100 000 tonnesof resin since launch


Questions and answers

autumn press conference - nestlé...| 22 october 2009 | autumn press conference micronutrient...

Documents