Autumn Press Conference 2005 20 October 2005
Key Figures Nestlé Group organic growth 5.8 % Food and Beverage organic growth 5.6% (RIG 3.5% + pricing 2.1%) Reported sales CHF 67.7 billion (+ 4.8%) 2 AUTUMN PRESS CONFERENCE 2005
The Four Factors of Sales 1995-2004 % Growth 15% 10 years average 10% (*) 5% 0% 1.3% 2.3% 3.4% -2.5% OG 5.7% -5% OG: Organic Growth -10% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 RIG Pricing & Other Acquisitions/Divestitures FX Impact (*) in 2001: including TTS effect 3 AUTUMN PRESS CONFERENCE 2005
Sales Evolution in USD bio USD bio 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 Nestlé 69.9 Unilever 52.3 Kraft 32.2 Danone 17.0 General Mills 11.0 0 1994 1996 1998 2000 2002 2004 Source: Citigroup CAGR 94-99 99-04 94-04 Nestle 3.4% 7.2% 5.3% Unilever -0.3% 3.6% 1.6% Kraft na 6.5% na PepsiCo 2.5% 7.5% 5.0% Coca Cola 2.8% 5.5% 4.2% Sara Lee 2.1% 2.5% 2.3% Danone 0.3% 3.9% 2.1% General Mills -1.9% 18.0% 7.6% 4 AUTUMN PRESS CONFERENCE 2005
EBITA (mio CHF) mio CHF Nestlé Group EBITA and EBITA Margin from 1995 to 2004 13'000 12'000 11'000 10'000 9'000 8'000 7'000 6'000 5'000 4'000 3'000 2'000 1'000 EBITA Margin over last 10 Years % of Sales 12.5% 12.6% 13.0% 12.3% 12.5% 12.2% 11.7% 11.8%* 12.0% 10.8% 10.6% 11.5% 10.6% 10.4% 11.0% 10.5% 10.0% 9.5% 0 9.0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 * New NPS definition in 2001 5 AUTUMN PRESS CONFERENCE 2005
EBITDA Evolution in USD bio USD bio 12.0 Nestlé 11.1 10.0 8.0 6.0 Unilever 9.2 Nestle Unilever Kraft PepsiCo CAGR 94-99 99-04 94-04 3.0% 9.3% 6.1% 4.3% 8.6% 6.4% na 4.0% na -0.8% 11.2% 5.0% 4.0 Danone 2.8 Coca Cola Sara Lee 3.4% 6.7% 5.0% 3.5% 3.4% 3.5% 2.0 Danone 3.8% 3.2% 3.5% 0 1994 1996 1998 2000 2002 2004 General Mills Source: Citigroup 4.7% 15.0% 9.7% 6 AUTUMN PRESS CONFERENCE 2005
GLOBE "Live" Markets (by end of December 2005) 23 markets will have implemented all three GLOBE objectives: 28 countries Over CHF 28 billion in sales Over 75,000 users of the system 316 factories 352 distribution centers 221 sales offices Over 36% of Nestlé Food and Beverage businesses will be running on GLOBE processes, data and systems 7 AUTUMN PRESS CONFERENCE 2005
Autumn Press Conference 2005
Key Points Group organic growth of 5.8% (RIG of 3.8%) Food & Beverage organic growth of 5.6% (RIG of 3.5%) Good organic growth in the Americas 7.3%, AOA 7%, and Waters 8.4% Europe's organic growth remains positive Excellent performance in "Other activities" 10.7% Strong pricing in Milk products, Soluble & R&G coffee and Nutrition helping to compensate raw material cost pressures 9 AUTUMN PRESS CONFERENCE 2005
Reported sales increase 4.8% to CHF 67.7 billion 3.8 % RIG 5.8% ORGANIC GROWTH 2.0 % Pricing -0.8 % Acqs - divests -0.2 % Exchange Rates 10 AUTUMN PRESS CONFERENCE 2005
RIG and organic growth in Europe (Food) Key markets 9m 2005 RIG OG % % Western Europe -0.3 1.3 Germany -0.3 0.5 France 0.3 1.2 NPPE (PetCare) 3.3 4.3 GB Region 2.2 5.9 Eastern Europe 0.4 4.6 Russian Region -7.9-1.9 11 AUTUMN PRESS CONFERENCE 2005
RIG and organic growth in the Americas (Food) Key markets 9m 2005 RIG OG % % United States & Canada 5.3 6.5 United States 3.5 5.2 NPPNA (PetCare) 5.9 6.9 Dreyer's 10.8 9.5 Canada 5.3 8.2 Latin America and Caribbean 4.5 8.9 Brazil 6.4 5.2 Mexico 3.2 9.1 12 AUTUMN PRESS CONFERENCE 2005
RIG and organic growth in Asia, Oceania and Africa (Food) Key markets 9m 2005 RIG OG % % Oceania and Japan 2.3 2.4 Japan 1.0-1.1 Other Asian markets 3.9 8.4 Greater China 3.1 3.7 Philippines -2.4 7.4 Africa -1.7 6.5 Middle East 9.3 13.0 13 AUTUMN PRESS CONFERENCE 2005
RIG and organic growth in Nestlé Waters 9m 2005 RIG OG % % North America 17.2 16.7 Europe 0.7-0.4 Rest of the world 15.0 17.3 Total Nestlé Waters 9.0 8.4 14 AUTUMN PRESS CONFERENCE 2005
RIG and organic growth in Other activities 9m 2005 RIG OG % % Alcon 9.5 9.8 Joint Ventures CPW 2.4 4.4 Galderma 1.1 5.0 Total other activities 9.6 10.7 The sales split in Other activities is approx. 75% Pharma and 25% Food and Beverage 15 AUTUMN PRESS CONFERENCE 2005
Sales by Product group 9m 2005 Sales RIG OG CHF bn % % Beverages 17.6 6.4 7.8 Milk products, nutrition and ice cream 18.9 2.4 5.5 Prepared dishes and cooking aids 11.8 2.6 4.2 Chocolate, confectionery and biscuits 7.3 0.2 2.7 PetCare 7.7 4.1 5.2 Pharmaceutical products 4.4 8.9 9.4 16 AUTUMN PRESS CONFERENCE 2005
Autumn Press Conference 2005
Distribution of Share Capital by Nationality since 1992 60 50 share captial in % 40 30 20 10 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Switzerland USA France Great Britain Germany (end March) 18 AUTUMN PRESS CONFERENCE 2005
Share Capital by Investor Type 1994-2005 100% 80% 56.2 56.8 54.7 53.3 54.3 52.7 48.4 44 33 34.7 32.6 31.6 60% 40% 20% 43.8 43.2 45.3 46.7 45.7 47.3 51.6 56 67 65.3 67.4 68.4 0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005* Institutionals Private Shareholders * as per 30/9 19 AUTUMN PRESS CONFERENCE 2005
Voting Limitations Total Result no change no opinion abolish article 20 AUTUMN PRESS CONFERENCE 2005
Special Quorum Total Result no change no opinion abolish article 21 AUTUMN PRESS CONFERENCE 2005
Attendance / Qualified Majority Total Result no change no opinion abolish article 22 AUTUMN PRESS CONFERENCE 2005
Directors Terms of Office 5 years 4 years 3 years 23 AUTUMN PRESS CONFERENCE 2005
Auditors Term of Office 3 years 2 years 1 year 24 AUTUMN PRESS CONFERENCE 2005
Autumn Press Conference 2005 TOWARDS A FOOD, NUTRITION & WELLNESS COMPANY Christiane Kuehne - Head of Corporate Wellness Unit Vevey, 20 October 2005
WELLNESS: A POWERFUL GLOBAL TREND... Expanding Media Coverage Government Involvement Demographic & Lifestyle Trends Wellness Growing Retailer Interest Self-Management of Personal Wellness Competitive Interest and Activity 26 AUTUMN PRESS CONFERENCE 2005
EVOLUTION OF NEED STATES IN FOOD Good Food Health & Wellness Wellbeing Taste/Pleasure Variety/Balance Safety/Quality For all + Perceived Nutritional value + Feeling Good Taking Control Equilibrium Body & Mind Sustenance Enjoyment Health/ Nutrition Psychological Contentment GOOD FOOD GOOD FOOD, GOOD LIFE 27 AUTUMN PRESS CONFERENCE 2005
CORPORATE WELLNESS UNIT MISSION Drive the Nutrition, Health & Wellness orientation across the Company by... Setting Direction Translating Wellness into Action Providing business solutions & tools 28 AUTUMN PRESS CONFERENCE 2005
NESTLE'S ASSETS Long standing experience in nutrition since 1867 World wide experience and coverage Skill in gaining consumer insight Network of people focused to drive Wellness across all companies R&D leadership in the science of food and nutrition Credibility with scientific and medical community 29 AUTUMN PRESS CONFERENCE 2005
STRONG GLOBAL BRANDS and products at every level of the "nutrition pyramid" 30 AUTUMN PRESS CONFERENCE 2005
KEY QUESTION The company who will make a difference in the Wellness Arena will be the one who provides the answer to the basic consumer question: How can I continue to enjoy my favourite foods and drinks and yet still improve the nutritional value of my diet? 31 AUTUMN PRESS CONFERENCE 2005
IMPROVING TASTE AND NUTRITIONAL VALUE "With whole wheat and real vegetables" Salt reduced by 11% TFA reduced to less than 3% Fibers & Proteins increased (wholegrain) Added vegetables "Both Taste and Health" 32 AUTUMN PRESS CONFERENCE 2005
IMPROVING TASTE AND NUTRITIONAL VALUE Consumer Insight "I would like the snacks that I give my children to be as nutritious as my home cooking" 60/40 Consumer Preference 60% preference in blind test Nutritional Assessment Nutritional Foundation: Salt within Nestlé Policy Competitive advantage: Whole wheat Communication TV ad: Goodness of 3 indian breads in 1 Results 4000t first year, 10% of main stream Maggi noodles volume 33 AUTUMN PRESS CONFERENCE 2005
NUTRITION INFORMATION 34 AUTUMN PRESS CONFERENCE 2005
NUTRITION INFORMATION 35 AUTUMN PRESS CONFERENCE 2005
NUTRITION INFORMATION 36 AUTUMN PRESS CONFERENCE 2005
NUTRITION INFORMATION 37 AUTUMN PRESS CONFERENCE 2005
NUTRITION INFORMATION Nestlé Noir 38 AUTUMN PRESS CONFERENCE 2005
BRINGING SCIENCE, NUTRITION & BUSINESS TOGETHER 3500 people in R&D R&D spending of 1.6% of sales support: Renovation process (60/40+) NRC/000050-05-UK Innovation based on consumer benefit areas 39 AUTUMN PRESS CONFERENCE 2005
BRANDED ACTIVE BENEFITS Today BAB account for sales of CHF 2.5 billion in 2004 Vitality / Protection Immunity & Protection Heart Health Long-Lasting Energy R Intestinal Health Growth & Development Building Stronger Bones Easy Digestion Helps Energy Release Active Cholesterol Control Long Lasting Alertness Feeling Good, & It Shows "Refuelling" Growth Helps Keep Calcium in your Bones 40 AUTUMN PRESS CONFERENCE 2005
BRANDED ACTIVE BENEFITS Consumer Insight: Digestive Comfort BAB: Fibers, calcium and vitamins Carrier product: Milk Strong branding Result +47% growth 41 AUTUMN PRESS CONFERENCE 2005
CONCLUSION Consumer insight on needs around Nutrition and Health Renovation and innovation focused around the taste and nutritional advantage of our products Consumer Communication and education on and around Nutrition Strong science base to support the drive towards Nutrition and Health Sustainable profitable growth 42 AUTUMN PRESS CONFERENCE 2005
Autumn Press Conference 2005
Perception of Nestlé in the Area of Corporate Social Responsibility Response in developed countries Nestlé Oil Food Beverage Apparel Negative Positive 44 AUTUMN PRESS CONFERENCE 2005
Perception of Nestlé in the Area of Corporate Social Responsibility Response in developing countries Nestlé Oil Food Beverage Apparel Negative Positive 45 AUTUMN PRESS CONFERENCE 2005
Partners Blend Launched October 6 in the UK with Fair Trade Label 46 AUTUMN PRESS CONFERENCE 2005
Next Media Events 23 February 2006 Spring Press Conference 6 April 2006 Ordinary General Meeting 25 April 2006 First Quarter Sales