autumn press conference - nestlé...| 22 october 2009 | autumn press conference micronutrient...
TRANSCRIPT
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
| 22 October 2009 | Autumn Press Conference
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%
22 October 2009 2009 nine month sales6
+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%
22 October 2009 2009 nine month sales7
% 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
22 October 2009 2009 nine month sales8
-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.
22 October 2009 2009 nine month sales9
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
22 October 2009 2009 nine month sales10
2009 YTD Organic Growth
Popularly Positioned Products
12 %
2009 Sales of monitored activities approaching CHF 7 billion
22 October 2009 2009 nine month sales11
Nespresso Present in over 50 countries
CHF 3 billion Sales milestone achievement in sight!!
2009 YTD Organic Growth 28 %
22 October 2009 2009 nine month sales12
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%
22 October 2009 2009 nine month sales13
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%
22 October 2009 2009 nine month sales14
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
22 October 2009 2009 nine month sales15
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
22 October 2009 2009 nine month sales16
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
22 October 2009 2009 nine month sales17
Other initiatives
SKU Rationalization
Working Capital Reduction
Savings in excess of CHF 1.0 bn
On target for 10% reduction
On target
22 October 2009 2009 nine month sales18
• 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
22 October 2009 2009 nine month sales19
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
22 October 2009 2009 nine month sales20
• 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
22 October 2009 | Autumn Press Conference
Autumn PressConference
Paul Bulcke
Chief Executive Officer
Nestlé S.A.
| 22 October 2009 | Autumn Press Conference
Total performance over 3 years
22
Sales*
+ 27%
EBIT*
+ 43%
EBIT margin reported
+ 130 bps
*constant currencies
| 22 October 2009 | Autumn Press Conference
Total performance over 3 years
23
Capital expenditure
CHF 14 billion
Acquisitions
CHF 15 billion
Total investment
CHF 29 billion
| 22 October 2009 | Autumn Press Conference
Total performance over 3 years
24
Share buy-back
CHF 16 billion
Total cash returned to shareholders
CHF 28 billion
Dividend payments
CHF 12 billion
| 22 October 2009 | Autumn Press Conference
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
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
Nestlé Roadmap
| 22 October 2009 | Autumn Press Conference27
Our ambitionBe the recognized
leading NHW companyBe a reference for
financial performanceTrusted by
all stakeholders
Competitive advantages
Growth driversOperational pillars
Unmatched
product and brand portfolio
Unmatched R&D capability
Unmatched
presencegeographic
People,
culture, values and attitude
| 22 October 2009 | Autumn Press Conference28
Nestlé Roadmap
Competitive advantages
| 22 October 2009 | Autumn Press Conference29
Nestlé Roadmap
Growth drivers
Nutrition, health and wellness
Emergingmarkets and
popularly positioned products
Out-of-home leadership
Premiumisation
| 22 October 2009 | Autumn Press Conference30
Nestlé Roadmap
Operational pillars
Innovation
& renovation
Operationalefficiency
Whenever,wherever, however
Consumercommunication
Nestlé Roadmap
| 22 October 2009 | Autumn Press Conference31
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
| 22 October 2009 | Autumn Press Conference
Building for growth
•Production capacity
•New technologies
•R&D capabilities
• Innovation and renovation
•Consumer-facing brand support
32
| 22 October 2009 | Autumn Press Conference
Investment in manufacturingReady-to-drink factory in Anderson, USA
33
| 22 October 2009 | Autumn Press Conference
Investment in manufacturingNespresso Production and Distribution Centre, Avenches, Switzerland
34
| 22 October 2009 | Autumn Press Conference
Investment in manufacturingTotole bouillon factory in Shangai, China
35
| 22 October 2009 | Autumn Press Conference36
Investment in Research and DevelopmentR&D Centre in Abidjan, Côte d’Ivoire
| 22 October 2009 | Autumn Press Conference37
Investment in Research and DevelopmentResearch Centre in Tokyo, Japan
en attente
| 22 October 2009 | Autumn Press Conference38
Investment in Research and DevelopmentChocolate Centre of Excellence, Broc, Switzerland
| 22 October 2009 | Autumn Press Conference39
Investment in Research and DevelopmentCereal Innovation Centre in Orbe, Switzerland
| 22 October 2009 | Autumn Press Conference40
Investment in Research and Development28 centres, 5000 people
| 22 October 2009 | Autumn Press Conference
Investment in brandsNescafé
41
| 22 October 2009 | Autumn Press Conference
Investment in brandsNestlé Purina
42
| 22 October 2009 | Autumn Press Conference43
Investment in brandsNescafé Dolce Gusto
| 22 October 2009 | Autumn Press Conference
Investment in PPP initiatives
44
| 22 October 2009 | Autumn Press Conference45
Nestlé affordable, nutritious foods in 19th Century
| 22 October 2009 | Autumn Press Conference
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
| 22 October 2009 | Autumn Press Conference
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
| 22 October 2009 | Autumn Press Conference
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
4 Bio iodized servings
10 Bio iodized servings
32 Bio iodized servings
27 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)
| 22 October 2009 | Autumn Press Conference
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.
| 22 October 2009 | Autumn Press Conference
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
| 22 October 2009 | Autumn Press Conference
Creating Shared Value
51
| 22 October 2009 | Autumn Press Conference52
Chocolate and Confectionery
22 October 2009 | Autumn Press Conference
Autumn Press Conference
Petraea Heynike
Executive Vice President
Marketing and Sales
| 22 October 2009 | Autumn Press Conference
Streamlining and refocus of products and brands
54
9-month organic growth
+ 4.0%
Half-year EBIT margin
+ 60 bps
| 22 October 2009 | Autumn Press Conference
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
| 22 October 2009 | Autumn Press Conference
KitKat
56
| 22 October 2009 | Autumn Press Conference
KitKat Japan: E-shop on Rakuten Ichiba
57
| 22 October 2009 | Autumn Press Conference
KitKat Japan
58
キットカツ = surely win
| 22 October 2009 | Autumn Press Conference
Growth of chocolate business
59
| 22 October 2009 | Autumn Press Conference
Chotu Munch
60
| 22 October 2009 | Autumn Press Conference
Chocolate Centre of Excellence
61
| 22 October 2009 | Autumn Press Conference62
Growth of dark chocolate and premium
| 22 October 2009 | Autumn Press Conference63
Worldwide shortage of cocoa beans
| 22 October 2009 | Autumn Press Conference64
Nestlé experimental farm in Ecuador
| 22 October 2009 | Autumn Press Conference65
Nestlé Research Centre, Abidjan, Côte d’Ivoire
| 22 October 2009 | Autumn Press Conference66
Nestlé Research Centre, Tours, France
| 22 October 2009 | Autumn Press Conference67
5 million cocoa farmers worldwide
| 22 October 2009 | Autumn Press Conference68
Over the past 15 years
17 million coffee and cocoa tree plantlets
Over the coming 10 years
38 million coffee and cocoa tree plantlets
| 22 October 2009 | Autumn Press Conference
The Cocoa PlanOur commitment to cocoa sustainability
69
Over the past 15 years
CHF 60 million
Over the coming 10 years
CHF 110 million
| 22 October 2009 | Autumn Press Conference
Nestlé Cocoa Plan consumer website
70
| 22 October 2009 | Autumn Press Conference
Coffee sustainabilityOur commitment
71
Over the past 15 years
CHF 200 million invested
Over the coming 10 years
CHF 350 million
| 22 October 2009 | Autumn Press Conference
Nestlé cocoa and coffee sustainability activities
72
All cocoa and coffeecombined investment for next 10 years
CHF 460 million
22 October 2009 | Autumn Press Conference
Autumn PressConference
Paul Bulcke
Chief Executive Officer
Nestlé S.A.
| 22 October 2009 | Autumn Press Conference
Nestlé Sustainable Agriculture Initiative
74
Over the past 10 years
Millions of farmers have received free technical assistance
| 22 October 2009 | Autumn Press Conference
Nestlé Sustainable Agriculture Initiative
75
Today
600 000 farmers receive free technical assistance
| 22 October 2009 | Autumn Press Conference
Investment in sustainability projects 2009
76
CHF 250 million
• Renewable energies
•Water usage
•Carbon footprint
• Factories and operations
| 22 October 2009 | Autumn Press Conference
Investment in bottle light-weighting
77
EcoShape bottle in USA
Savings of more than
100 000 tonnesof resin since launch
| 22 October 2009 | Autumn Press Conference78
| 22 October 2009 | Autumn Press Conference79
Questions and answers