Nestlé 2011 Full Year Roadshow presentationwebcast slides

1. 2011 Full Year Roadshow
Paul Bulcke
Chief Executive Officer
Jim Singh
Chief Financial Officer
Wan Ling Martello
Chief Financial Officer
Designate
February 21st, 2012 2011 Full Year Roadshow

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.
1 February 21st, 2012 2011 Full Year Roadshow

3. 2011 Full Year Roadshow
Jim Singh
Chief Financial Officer
February 21st, 2012 2011 Full Year Roadshow

4. Delivering progress sustainably in a New Reality
3 February 21st, 2012 2011 Full Year Results Roadshow

5. 2011: Strong Full Year Performance
At constant
As reported
exchange rates
Sales 83.6 bn
Organic Growth +7.5%
Real Internal Growth +3.9%
Trading Operating Profit 12.5 bn
Trading Operating Profit Margin 15.0% +60 bps +90 bps
(vs. 2010 continuing operations)
Net Profit 9.5 bn +8.1%
(vs. 2010 continuing operations)
Net Profit Margin 11.3% +130 bps
(vs. 2010 continuing operations)
Underlying EPS 3.08 +7.8%
(vs. 2010 Group)
Dividend 1.95 +5.4%
(proposed)
All figures in CHF
4 February 21st, 2012 2011 Full Year Results Roadshow

6. Delivering the Nestlé Model in 2011
Former Nestlé Model FY 2011 Enhanced Nestlé Model FY 2011
Organic growth 5-6% +7.5% Organic growth 5-6% +7.5%
Increased EBIT margin +10 bps Increased trading operating +90 bps
in constant currencies margin in constant currencies
Increased underlying EPS +7.8%
Improvement in capital efficiency in constant FX
Improvement in capital efficiency
5 February 21st, 2012 2011 Full Year Results Roadshow

7. 10 years of the Nestlé Model
Driving Organic Growth & EBIT Margin Improvement 15.0%
14.3% 14.6%
14.0%
13.5% 14.4%
12.9%
12.5% 12.6%
12.3%
11.8%
10-year annual averages 9.7%
Organic Growth 6.4% 8.3%
7.4% 7.5%
Real Internal Growth 3.6%
6.2% 6.2% 6.2%
4.9% 5.1%
4.5%
4.1%
Organic Growth
EBIT margin *
TOP margin
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
* Before net trading items Data corresponds to published figures – not restated for accounting changes
6 February 21st, 2012 2011 Full Year Results Roadshow

8. Enhancing performance – EPS and DPS evolution
3.32
3.09 3.08
2.80 2.82
2.41
2.13
2.02
1.89 1.93 1.95 Proposed
1.85
1.72 EPS*
1.60
DPS
1.40
1.22
1.04
0.90
0.80
0.70 0.72
0.64
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
* Underlying EPS, excl. 2001 which is Basic EPS
All figures in CHF
7 February 21st, 2012 2011 Full Year Results Roadshow

9. A winning strategy driving superior shareholder returns
Nestlé SA Total Shareholder Returns
2002-2011 96.1%
CHF, dividends reinvested
52.6%
43.2%
29.6%
17.7% 20.7%
14.4%
8.3%
-18.1% -15.2%
USA 7 USA 6 USA 5 USA 4 USA 3 USA 2 USA 1 EUR 3 EUR 2
Source: Bloomberg
8 February 21st, 2012 2011 Full Year Results Roadshow

10. Growth opportunities – consumers increasingly focusing on
Nutrition, Health and Wellness as per-capita income rises
‘Aggressive’ local competitors with growing
and dominant position (low price/low margin)
‘Premiumisation’
Battleground for growth
in the emerging markets
Consumption of food
manufacturing value-
added actual US$,
per-capita
Convenience
Sustenance Pleasure and Nutrition Well-Being
diversity Nestlé per-capita
sales
1.4 Billion new consumers
primarily sourced from emerging
markets where competitive
PPP* environment is much more
widespread and dynamic
Per-capita income
US$ 1,500 5,000 13,000 22,000 28,000
Population in developed markets
in general is in decline
*PPP = Popularly Positioned Products Sources: UNIDO (value-added), WIDER and World Bank; Nestlé
9 February 21st, 2012 2011 Full Year Results Roadshow

11. The transformational opportunity
WHAT HOW
Strategic Organisational
Transformation Transformation
Create an agile fleet of
From traditional businesses/markets
businesses into a Nutrition,
Focus on demand generation
Health and Wellness
Leverage scale through an efficient
company
support structure
Tackle under-performers
10 February 21st, 2012 2011 Full Year Results Roadshow

12. Significant acquisitions added new growth platforms
and strengthened market leadership
Acquisitions 2000 to 2011:
Sales in CHF ~30 bn
•Ruzanna RU
•Garoto Brazil
•Osem Israel
•Fonterra milk Medical
powder AMS •Powwow EUR Nutrition
•BPW
•Ice cream Partners NA
•HOD Waters USA
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
11 February 21st, 2012 2011 Full Year Results Roadshow

13. Significant divestitures rationalized the portfolio and
eliminated non strategic and loss-making businesses
Divestitures 2000 to 2011:
Sales in CHF ~ -17 bn
23% 25% 52%
•San Sepolcro Italy •Eden Springs Water FR
•Frozen Meat GER •Barnaul Conf RU
•Family Frost
•Canned & Liquid
•Trinks GER Milk AOA
•Eismann EUR •Dry cut pasta Italy
•Crosse & Blackwell
•Minag Water GER • Dallmayr R&G •Private Label Ice South Africa
•Eugene Perma • Chilled Dairy GER cream GER
EUR (cosmetics)
•Findus EUR
•Frozen Potato USA
•FIS International
•Project Perm UK
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
12 February 21st, 2012 2011 Full Year Results Roadshow

14. Nestlé Innovation Territory: expanding to new dimensions
Customized
Customized Personalized
Products Solutions
Product-linked
systems & services
Standard
Product Systems Services
13 February 21st, 2012 2011 Full Year Results Roadshow

15. Capital expenditure driven by emerging markets, powdered beverages,
nutrition and investments in capacity and new products & technology
Split by Region Split by Product Category
Others
PetCare
Confectionery
Developed 4% 10% Culinary
11%
Emerging Nutrition
Dairy / Ice cream
49% 52%
Water
27% 22% 25%
12% Powd. Beverages
2005 2011 2012 Split by Type 2005 2011 2012
44%
54% 57%
Capacity and new
products &
technology
Replacement
2005 2011 2012
14 February 21st, 2012 2011 Full Year Results Roadshow

16. Trade Net Working Capital is an area of focus and improvement
2005 2006 2007 2008 2009 2010 2011
TNWC as % of sales
Notes:
Like for like estimate
2010 and 2011 figures exclude Alcon, Hsu Fu Chi and Yinlu
15 February 21st, 2012 2011 Full Year Results Roadshow

17. Nestlé’s Operational Efficiency
Delivering the highest quality, lowest cost & best customer service leveraging GLOBE
Performance
• Manufacturing
• Manufacturing • Physical Logistics
• Physical Logistics • Bad Goods
• Bad Goods • MOGE
• MOGE • PFME
• Capital Charges
• Manufacturing • Financing Costs
• Physical Logistics
• Bad Goods
Operation
EXCELLENCE
2007 Focus on change in mind-set to
Target generate continuous improvement
Manufacturing 2004+
MH'97
Focus on projects to
CI
generate cost improvements
1997 2001 2005 2008 2011...
16 February 21st, 2012 2011 Full Year Results Roadshow

18. The Nestlé Model
 Organic growth 5-6%
 Increased trading operating margin in constant currencies
 Increased underlying EPS in constant currencies
 Improvement in capital efficiency
17 February 21st, 2012 2011 Full Year Results Roadshow

19. 2011 Full Year Roadshow
Paul Bulcke
Chief Executive Officer
February 21st, 2012 2011 Full Year Roadshow

20. The New Reality
19 February 21st, 2012 2011 Full Year Results Roadshow

21. Deliver shorter term
Uncertainty and volatility
Different dynamics in different markets
To win:
 Fast moving
 Entrepreneurial
 Decentralised
20 February 21st, 2012 2011 Full Year Results Roadshow

22. Deliver shorter term Manage for longer term
Uncertainty and volatility Growing populations, global affluence
Different dynamics in different markets increasing, health awareness, etc
To win: To win:
 Fast moving  Build and innovate brands
 Entrepreneurial  Enhance capacities and capabilities
 Decentralised  Invest in strategic opportunities
21 February 21st, 2012 2011 Full Year Results Roadshow

23. Deliver shorter term Manage for longer term
Uncertainty and volatility Growing populations, global affluence
Different dynamics in different markets increasing, health awareness, etc
To win: To win:
 Fast moving  Build and innovate brands
 Entrepreneurial  Enhance capacities and capabilities
 Decentralised  Invest in strategic opportunities
Concise strategy
Aligned values
Firm principles
22 February 21st, 2012 2011 Full Year Results Roadshow

24. Deliver shorter term Manage for longer term
Uncertainty and volatility Growing populations, global affluence
Different dynamics in different markets increasing, health awareness, etc
To win: To win:
 Fast moving  Build and innovate brands
 Entrepreneurial  Enhance capacities and capabilities
 Decentralised  Invest in strategic opportunities
The Nestlé Roadmap
23 February 21st, 2012 2011 Full Year Results Roadshow

25. The Nestlé Roadmap
Competitive
Advantages
Appropriate
to the New Reality
Driving
Sustainable
Performance
Operational Growth
Pillars Drivers
24 February 21st, 2012 2011 Full Year Results Roadshow

26. The Nestlé Roadmap
Competitive
Advantages
Addressing changing
consumer behaviour –
perceived values,
expectations and
impulses
Operational Growth
Pillars Drivers
25 February 21st, 2012 2011 Full Year Results Roadshow

27. It’s all about Engaging with Consumers
26 February 21st, 2012 2011 Full Year Results Roadshow

28. Driving Innovation Globally: NESCAFÉ
Countries Countries
Year I&R NHW Premium PPP OOH Zones
 2011  2012
Dolce Gusto ‘06  3 56 3
Gold Blend ‘11  3 62 0
3-in-1
By Market
every 2 yrs  3 70 3
Green Blend ‘09   2 29 5
RTD ’07**  2 24 1
Viaggi by
Nescafé
’10   1 4 2
Milano ‘10   3 20 12
Alegria ‘09  3 62 10
** 2007 RTD coffee integrated into NESTLÉ from BPW
27 February 21st, 2012 2011 Full Year Results Roadshow

29. Driving Innovation Globally: NESCAFÉ
Countries Countries
Year I&R NHW Premium PPP OOH Zones
 2011  2012
Dolce Gusto ‘06  3 56 3
Gold Blend ‘11  3 62 0
3-in-1
By Market
every 2 yrs  3 70 3
Green Blend ‘09   2 29 5
RTD ’07**  2 24 1
Viaggi by
Nescafé
’10   1 4 2
Milano ‘10   3 20 12
Alegria ‘09  3 62 10
** 2007 RTD coffee integrated into NESTLÉ from BPW
28 February 21st, 2012 2011 Full Year Results Roadshow

30. Driving Innovation Globally: NESCAFÉ
Countries Countries
Year I&R NHW Premium PPP OOH Zones
 2011  2012
Dolce Gusto ‘06  3 56 3
Gold Blend ‘11  3 62 0
3-in-1
By Market
every 2 yrs  3 70 3
Green Blend ‘09   2 29 5
RTD ’07**  2 24 1
Viaggi by
Nescafé
’10   1 4 2
Milano ‘10   3 20 12
Alegria ‘09  3 62 10
** 2007 RTD coffee integrated into NESTLÉ from BPW
29 February 21st, 2012 2011 Full Year Results Roadshow

31. Driving Innovation Globally: NESCAFÉ
Countries Countries
Year I&R NHW Premium PPP OOH Zones
 2011  2012
Dolce Gusto ‘06  3 56 3
Gold Blend ‘11  3 62 0
3-in-1
By Market
every 2 yrs  3 70 3
Green Blend ‘09   2 29 5
RTD ’07**  2 24 1
Viaggi by
Nescafé
’10   1 4 2
Milano ‘10   3 20 12
Alegria ‘09  3 62 10
** 2007 RTD coffee integrated into NESTLÉ from BPW
30 February 21st, 2012 2011 Full Year Results Roadshow

32. Driving Innovation Globally: NESCAFÉ
Countries Countries
Year I&R NHW Premium PPP OOH Zones
 2011  2012
Dolce Gusto ‘06  3 56 3
Gold Blend ‘11  3 62 0
3-in-1
By Market
every 2 yrs  3 70 3
Green Blend ‘09   2 29 5
RTD ‘07**  2 24 1
Viaggi by
Nescafé
‘10   1 4 2
Milano ‘10   3 20 12
Alegria ‘09  3 62 10
** 2007 RTD coffee integrated into NESTLÉ from BPW
31 February 21st, 2012 2011 Full Year Results Roadshow

33. Innovation Aligned with Growth Drivers
Countries Countries
Category Year I&R NHW Premium PPP OOH Zones
 2011  2012
Ice Cream Peelable ‘10   3 12 25
Nespresso
Lattissima
+ ‘11   3 30+ 20+
Nutrition L. reuteri ‘10  3 16 20
Food Crispy ‘11  3 10 14
Dairy Nido ’11   2 10 14
PetCare
ONE
Beyond ’11   1 1 1
Professional Milano ‘10   3 20 12
32 February 21st, 2012 2011 Full Year Results Roadshow

34. Innovation Aligned with Growth Drivers
Countries Countries
Category Year I&R NHW Premium PPP OOH Zones
 2011  2012
Ice Cream Peelable ‘10   3 12 25
Nespresso
Lattissima
+ ‘11   3 30+ 20+
Nutrition Lactogen ‘10  3 16 20
Food Crispy ‘11  3 10 14
Dairy Nido ’11   2 10 14
PetCare
ONE
Beyond ’11   1 1 1
Professional Milano ‘10   3 20 12
33 February 21st, 2012 2011 Full Year Results Roadshow

35. Innovation Aligned with Growth Drivers
Countries Countries
Category Year I&R NHW Premium PPP OOH Zones
 2011  2012
Ice Cream Peelable ‘10   3 12 25
Nespresso
Lattissima
+ ‘11   3 30+ 20+
Nutrition Lactogen ‘10  3 16 20
Food Crispy ‘11  3 10 14
Dairy Nido ’11   2 10 14
PetCare
ONE
Beyond ’11   1 1 1
Professional Milano ‘10   3 20 12
34 February 21st, 2012 2011 Full Year Results Roadshow

36. Innovation Aligned with Growth Drivers
Countries Countries
Category Year I&R NHW Premium PPP OOH Zones
 2011  2012
Ice Cream Peelable ‘10   3 12 25
Nespresso
Lattissima
+ ‘11   3 30+ 20+
Nutrition Lactogen ‘10  3 16 20
Food Crispy ‘11  3 10 14
Dairy Nido ’11   2 10 14
PetCare
ONE
Beyond ’11   1 1 1
Professional Milano ‘10   3 20 12
35 February 21st, 2012 2011 Full Year Results Roadshow

37. It’s all about Engaging with Consumers
36 February 21st, 2012 2011 Full Year Results Roadshow

38. Communication trends
 Buy Space  Earn Attention
 Deliver a Message  Start a Conversation
Spend gets brands visibility: Paid media
Creativity gets people ‘liking’ them: Earned media
37 February 21st, 2012 2011 Full Year Results Roadshow

39. From Brand Communication
to Brand Conversation
while increasing ROBBI*
*Return On
Brand Building
Investment
38 February 21st, 2012 2011 Full Year Results Roadshow

40. How Nestlé is Driving Profitable
Brand Conversation
 Digital opportunities are an integral part of Brand Campaigns
 Rapid increase in brand building investment in Digital and Social Media
 Build internal Digital competencies as competitive advantages
 Nestlé and Social Media – brand conversation in action
39 February 21st, 2012 2011 Full Year Results Roadshow

41. Brand Building the Nestlé Way
Fundamentals of Brand Building
 Targeting Consumer
 Inspiring Brand
 Big Brand Idea
 Measurable Results
40 February 21st, 2012 2011 Full Year Results Roadshow

42. Brand Building the Nestlé Way
41 February 21st, 2012 2011 Full Year Results Roadshow

43. Effectiveness of Nestlé’s Messaging
Effective recall and
persuasiveness of
message
% in Upper 30 40
quartile 51
% in Upper
middle quartile 34 31
21
2009 2010 2011
Base: All Nestle Aired adverts
Quartiles are based on all ads on database.
42 February 21st, 2012 2011 Full Year Results Roadshow

44. Creating Competitive Gaps for our Markets
Brand Building Digital & Social
the Nestlé Way Media Strategy
Excellence Excellence
in Brand Building in Listening,
Engaging
and Inspiring
43 February 21st, 2012 2011 Full Year Results Roadshow

45. Winning in Digital & Social Media
Inspiring &
Transforming
 Social by Design
Engaging
 Breakthrough Insights
 Nurturing Brand Advocacy
& Innovation
Listening  Consumer Conversations
 24/7 Sense & Respond
 Digital Measurements
 Content, Apps & Services
 Conversation Analysis
 Search Analysis Increasing Return on Brand Building Investment
(ROBBI)
44 February 21st, 2012 2011 Full Year Results Roadshow

46. How Nestlé is Driving Profitable
Brand Conversation
 Digital opportunities are an integral part of Brand Campaigns
 Rapid increase in brand building investment in Digital and Social Media
 Build internal Digital competencies as competitive advantages
 Nestlé and Social Media – brand conversation in action
45 February 21st, 2012 2011 Full Year Results Roadshow

47. Trend in Digital Investment
Over 50 Apps launched
Over 250 Nestlé brand pages on Facebook
Over 1000 brand websites
46 February 21st, 2012 2011 Full Year Results Roadshow

48. How Nestlé is Driving Profitable
Brand Conversation
 Digital opportunities are an integral part of Brand Campaigns
 Rapid increase in brand building investment in Digital and Social Media
 Build internal Digital competencies as competitive advantages
 Nestlé and Social Media – brand conversation in action
47 February 21st, 2012 2011 Full Year Results Roadshow

49. Sharing Internal Digital Best Practices
48 February 21st, 2012 2011 Full Year Results Roadshow

50. How Nestlé is Driving Profitable
Brand Conversation
 Digital opportunities are an integral part of Brand Campaigns
 Rapid increase in brand building investment in Digital and Social Media
 Build internal Digital competencies as competitive advantages
 Nestlé and Social Media – brand conversation in action
49 February 21st, 2012 2011 Full Year Results Roadshow

51. Brand Conversation through Apps
Downloaded by 10% of
smart-phone users in France
50 February 21st, 2012 2011 Full Year Results Roadshow

52. Brand Conversation through Apps
France Germany Hong Kong
Maggi Apps launched successfully
across the globe
51 February 21st, 2012 2011 Full Year Results Roadshow

53. Brand Conversation through Facebook
250+ Nestlé brand pages with 40+ million Facebook fans
7 brands have 1+ million fans each
52 February 21st, 2012 2011 Full Year Results Roadshow

54. Brand Conversation through Earned Media
Over 10 million earned media viewings each
53 February 21st, 2012 2011 Full Year Results Roadshow

55. It’s all about Engaging with Consumers
54 February 21st, 2012 2011 Full Year Results Roadshow

56. Reaching and Engaging with the Consumer
55 February 21st, 2012 2011 Full Year Results Roadshow

57. Reaching and Engaging with the Consumer
56 February 21st, 2012 2011 Full Year Results Roadshow

58. Reaching and Engaging with the Consumer
57 February 21st, 2012 2011 Full Year Results Roadshow

59. Reaching and Engaging with the Consumer
58 February 21st, 2012 2011 Full Year Results Roadshow

60. Reaching and Engaging with the Consumer
59 February 21st, 2012 2011 Full Year Results Roadshow

61. Reaching and Engaging with the Consumer
60 February 21st, 2012 2011 Full Year Results Roadshow

62. Reaching and Engaging with the Consumer
61 February 21st, 2012 2011 Full Year Results Roadshow

63. Reaching and Engaging with the Consumer
B2B
62 February 21st, 2012 2011 Full Year Results Roadshow

64. Reaching and Engaging with the Consumer
63 February 21st, 2012 2011 Full Year Results Roadshow

65. 1,000,000 new outlets in AOA
between 2010 and 2012
64 February 21st, 2012 2011 Full Year Results Roadshow

66. It’s all about Engaging with Consumers
65 February 21st, 2012 2011 Full Year Results Roadshow

67. Roadmap Driving Performance in New Reality
Competitive
Advantages
Operational Growth
Pillars Drivers
66 February 21st, 2012 2011 Full Year Results Roadshow

68. 2011 Full Year Roadshow
Wan Ling Martello
Chief Financial Officer
Designate
February 21st, 2012 2011 Full Year Roadshow

69. Driving Organic Growth & Margin Improvement
15.0%
14.3% 14.6%
14.0%
13.5% 14.4%
12.9%
12.5% 12.6%
12.3%
11.8%
10-year annual averages 9.7%
Organic Growth 6.4% 8.3%
7.4% 7.5%
Real Internal Growth 3.6%
6.2% 6.2% 6.2%
4.9% 5.1%
4.5%
4.1%
Organic Growth
EBIT margin *
TOP margin
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
* Before net trading items Data corresponds to published figures – not restated for accounting changes
68 February 21st, 2012 2011 Full Year Results Roadshow

70. The Nestlé Model
 Organic growth 5-6%
 Increased trading operating margin in constant currencies
 Increased underlying EPS in constant currencies
 Improvement in capital efficiency
69 February 21st, 2012 2011 Full Year Results Roadshow

71. 2011 Full Year Roadshow
Discussion
February 21st, 2012 2011 Full Year Roadshow