Nestlé in the USA & Frozen Meals Performance. February 23, 2017 Jeff Hamilton President Nestlé Food Division Nestlé USA

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1 Nestlé in the USA & Frozen Meals Performance February 23, 2017 Jeff Hamilton President Nestlé Food Division Nestlé USA

2 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. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments. 2 February 23, 2017 CAGNY 2017

USA is a key contributor to Nestlé Global Group Sales (% of Nestlé USA) Nestlé Global Nestlé USA 30% Petcare Waters Frozen Food (ex-pizza) Frozen Pizza Infant

3 USA is a key contributor to Nestlé Global Group Sales (% of Nestlé USA) Nestlé Global Nestlé USA 30% Petcare Waters Frozen Food (ex-pizza) Frozen Pizza Infant Formula & Baby Food Ice Cream Coffee Creamers Confectionary All Other 27% 15% 9% 5% 8% 7% 6% 5% 17% Total Nestlé USA: USD 27 bn 3 Source: Nestle internal data

4 We operate in a broad range of categories with leading brands Petcare $26.6bn #1 Confections $20.2bn #4 Frozen Food $17.4bn #1 Waters $8.4bn #1 Ice Cream $10.9bn #1 Nutrition $8.4bn #1 (Baby Food) Coffee & Creamers $3.7bn #1 4 Source: Nielsen Scanning, xaoc for all categories except Confections, Waters, Ice Cream and RTD Milk which reflect xaoc+c

5 Nestlé Prepared Foods Sales ($2.6B) 2016 Nestle Retail $ Value BUITONI 10% MULTI-SERVE 50% LEAN CUISINE 30% STOUFFER'S 60% SINGLE-SERVE 50% SINGLE-SERVE MULTI-SERVE STOUFFER'S LEAN CUISINE BUITONI 5 Source: Nielsen RMS, xaoc, 52WE 12/31/16

6 Millions US Frozen Meals Category was in steady decline Category Value (CAGR 2.7%) $9'000 $8'000 $7'000 $7'919 $7'959 $7'683 $7'340 $7'107 $6'000 $5'000 $4'000 $3'000 $2'000 $1'000 $ FROZEN PREPARED MEALS 6 Source: Nielsen RMS, xaoc,

Fundamental Change to Return the Business to Growth Better reflect changing consumer trends in our brands Drive clean label recipes across the portfolio

7 Fundamental Change to Return the Business to Growth Better reflect changing consumer trends in our brands Drive clean label recipes across the portfolio Extend brand reach to attractive new territories Leverage digital and social media to communicate more effectively Take a Total Market Approach to communication 7

Stouffer s has Evolved Help America enjoy a Real Dinner every night FROM TO 83 Words* 35 Words* Focus on simple, high quality ingredients TOMATO PUREE (WATER, TOMATO PASTE), BLANCHED LASAGNA (WATER,

MOZZARELLA CHEESE [PASTEURIZED MILK, SALT, CULTURES, ENZYMES], MODIFIED CORNSTARCH NONFAT MILK, FLAVORS), DRY CURD COTTAGE CHEESE (CULTURED SKIM MILK, ENZYMES), MODIFIED CORNSTARCH, SALT, BLEACHED

YEAST EXTRACT, DEHYDRATED GARLIC MEAT SAUCE: WATER, BEEF, MODIFIED CORNSTARCH, TOMATO PASTE, SALT, WHEAT FLOUR, DEHYDRATED ONIONS, DEHYDRATED GARLIC, SUGAR, SPICES, SOY SAUCE [WATER, SOYBEAN, WHEAT

8 Stouffer s has Evolved Help America enjoy a Real Dinner every night FROM TO 83 Words* 35 Words* Focus on simple, high quality ingredients TOMATO PUREE (WATER, TOMATO PASTE), BLANCHED LASAGNA (WATER, SEMOLINA), WATER, COOKED BEEF, LOW-MOISTURE PART-SKIM MOZZARELLA CHEESE (PASTEURIZED PART-SKIM MILK, CHEESE CULTURES, SALT, ENZYMES), PART-SKIM MOZZARELLA CHEESE AND MODIFIED CORNSTARCH (PART-SKIM MOZZARELLA CHEESE [PASTEURIZED MILK, SALT, CULTURES, ENZYMES], MODIFIED CORNSTARCH NONFAT MILK, FLAVORS), DRY CURD COTTAGE CHEESE (CULTURED SKIM MILK, ENZYMES), MODIFIED CORNSTARCH, SALT, BLEACHED WHEAT FLOUR, DEHYDRATED ONIONS, SUGAR, PARMESAN CHEESE (CULTURED MILK, SALT, ENZYMES), SPICES, SEASONING (SOY SAUCE [WATER SOYBEAN, WHEAT, SALT], AUTOLYZED YEAST EXTRACT, DEXTROSE, SOYBEAN OIL), YEAST EXTRACT, DEHYDRATED GARLIC MEAT SAUCE: WATER, BEEF, MODIFIED CORNSTARCH, TOMATO PASTE, SALT, WHEAT FLOUR, DEHYDRATED ONIONS, DEHYDRATED GARLIC, SUGAR, SPICES, SOY SAUCE [WATER, SOYBEAN, WHEAT SALT], PASTA: WATER, SEMOLINA, CHEESE: SKIM MILK, MODIFIED CORNSTARCH, SALT, CULTURES, ENZYMES, FLAVORS Reach new Consumers America s Favorite Comfort Food Fit Kitchen for consumers with an Active Lifestyle 8 * Stouffer s Meat & Sauce Lasagna

9 9 Stouffer s Fit Kitchen Communication

10 Lean Cuisine successfully repositioned Feeding your Phenomenal FROM TO Range Segmentation New Health Benefits Modern Culinary Recipes 10

11 11 Lean Cuisine Communication

12 Millions Frozen Meals Category has stabilized Category Value $9'000 $8'000 $7'000 $7'919 $7'959 $7'683 $7'340 $7'107 $7'019 $7'019 $6'000 $5'000 $4'000 $3'000 $2'000 $1'000 $ FROZEN PREPARED MEALS 12 Source: Nielsen RMS, xaoc,

13 Nestlé has Pulled the Category Back to Growth 6.0% $ % Chg vs YA 4.0% 3.5% 3.1% 2.5% 2.0% 0.0% -2.0% -4.0% -2.5% -6.0% -5.2% -5.1% -5.2% -8.0% -10.0% -7.2% -7.9% -8.6% FH 2012 BH 2012 FH 2013 BH 2013 FH 2014 BH 2014 FH 2015 BH 2015 FH 2016 BH 2016 NESTLE FROZEN PREPARED MEALS 13 Source: Nielsen RMS, xaoc,

14 Category growth has improved with Nestlé consistently above the category since relaunch Dollar Index vs Year Ago Total Frozen Prepared Meals Pre period: Category -2.8%, Nestlé -7.3% Post period: Category -0.2%, Nestlé +2.8% Category Nestlé Source: Nielsen RMS, Rolling 12 weeks, Total XAOC - Frozen Prep Foods Databases data through 01/28/17

15 Frozen delivers on fundamental consumer needs Perfect preservation frozen at the peak of freshness Provides simple management of portion control Helps consumers understand and ensure nutritional balance Supports controlled intake of sodium and calories Increases convenience and eases hectic lifestyles Reduces food waste 15

relevant High growth segments yet to be fully penetrated Nascent

16 And is an attractive business $17 B Category is large and profitable Improving category trends as offerings become more relevant High growth segments yet to be fully penetrated Nascent opportunity in ecommerce Supplier investment and retailer commitment have returned 16

17 How to Sustain the Performance Evolve core business in line with consumer trends Increase participation in high growth segments and channels Virtuous Circle Drive cost efficiencies to improve ROIC and invest for growth Expect to achieve sustainable lowto-mid single digit growth 17

Samples. Nutritional Information. Manufacturer & Contact Information. Delivery Information. Domino s Smart Slice (14 Whole Grain RFRS Pepperoni Pizza)

Samples. Nutritional Information. Manufacturer & Contact Information. Delivery Information. Domino s Smart Slice (14 Whole Grain RFRS Pepperoni Pizza) Domino s Smart Slice (14 Whole Grain RFRS Pepperoni Pizza) Samples Type Lunch Serving Size 1 slice (8 cut) # Of Servings In Sample NA # Of Servings Per Case NA Case Weight NA Frozen or Dry Fresh-from-the-oven