nestlé bulgaria sustainability and creating shared value overview

Nestlé BulgariaSustainability andCreating Shared ValueOverview 2013

Evgeniya andGabriela

an Employee of Nestlé Bulgaria and

her daughter

Nestlé Sustainability and Creating Shared Value

Overview 2013

Creating Shared Value

To continue to prosper over the longterm, we need to ensure that the communities we serve and in which we operate prosper too. We are determined to ensure that our glob-al presence and operations bring benefits to our shareholders, as well as our people, the environment and society at large. There-fore, beyond complying with national laws, international standards and our own Nestlé Corporate Business Principles; we are oper-ating in ways that help protect the environ-ment for future generations.

Thus, our commitments to sustainability and compliance form the foundations upon which we build our actions to Create Shared Value in our focus areas of nutrition, water and rural development.

Nestlé Bulgaria is a leader in Nutrition, Health and Wellness, developing various programs for its employers and for the so-ciety. The Company is a socially responsible employer, as well as a long-term partner and active participant in the young people's career development in Bulgaria.

Laws, business principles, codes of conduct

Protect the future

Nutrition, water,rural development

Nestlé in Society pyramid

CreatingSharedValue

Sustainability

Compliance

“We believe we can make an important contribution to society, by going a step beyond corporate social responsibil-

ity to create value through our core business both for our shareholders and society. We prioritize the areas of nutri-

tion, water and rural development to create shared value; this requires long term thinking...”

Peter Brabeck-Letmathe, Chairman, Nestlé

“Creating Shared Value is built upon fundamental commitments to society, both to achieve the highest standards of

compliance with laws, codes of conduct and our own Nestlé Corporate Business Principles as well as to protect the

environment for future generations.”

Paul Bulcke, CEO Nestlé

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Overview 2013

Creating Shared Value in Bulgaria by focusing on sustainability and responsible production

1700 employees

20 years of stable presence

335,9 million BGN

revenue in 2013

146 million BGN

invested for the period

2004-2013

14 million BGN

invested in 2012

100% of the products

have GDA (Guideline Daily

Amount) and Nutritional

compass

2 factories

Sofia factory with over

75 years of experience in

confectionery production

70% of Sofia factory

production is exported

KIT KAT® export from Bulgaria for

30 countries during the past

6 years

30% of the Varna

ice-cream factory production

is exportedin 1939

Stefan Todorov founded the confectionery

factory named Shtastie [Happiness].

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Overview 2013

Nestlé Bulgaria

The history of Nestlé in Bulgaria started back in 1994 when Nestlé acquired the largest manufacturer of chocolate and confectionery SZI Sofia. For twenty years on the Bulgarian market, Nestle Bulgaria has become one of the biggest strategic investors in the food industry in the country and a reliable and preferred employer.Since the first Nestlé product was produced in Bulgaria, till today, we continue constantly to develop and improve our product portfolio. We invest continuously in new production lines, advanced technology, improving the quality of our products, training teams, choosing the best raw materials and suppliers and looking after our consumers’ health.We produce our products in two factories and we

present on the Bulgarian market coffee, cocoa beverages, chocolate and confectionery, biscuits, infant formulas and baby foods, breakfast cereals, pet food, ice cream. Our brands are both well-established global brands and local, traditional Bulgarian ones. We at Nestlé believe that in order for a business to be successful, it has to create value not only for the stakeholders, but also for society as a whole. Our business strategy is based on the principle of Creating Shared Value and in over 19 years on the Bulgarian market we are committed to create value for everyone associated with our company – from our suppliers, and our customers to our employees, consumers and the society, in which we operate.

Major responsibility areas in our focus:

� continuous improvement of our products’ nutritional value

� promotion of active lifestyle and balanced nutrition by

creating awareness for our employees, our consumers and

their families

� food safety and quality and continuous investments in new

production lines and advanced technology

� sustainable production, water and energy reduction

� youth employment and career development for our

employees

1994NESTLÉ entered the

Bulgarian market

2010Launch of healthy range

Jiten dar

fortified biscuits

3


Overview 2013

Our mission is to

improve the quality

of life of people

by providing them

with good food and

beverages, everywhere

and every day. The area

of balanced nutrition

and active lifestyle is

one of the priorities of

our company in Bulgaria

and we continuously

invest in various NHW

projects.

We aim to provide

science-based,

transparent and

understandable

information to our

consumers about

the nutritional value

of our products and

to encourage our

consumers toward

balanced nutrition and

active lifestyle.

� We constantly improve our products, in order to provide balanced choices and high nutritional value to our consumers.

� All the kids' products that we launch on the Bulgarian market have Nutritional Foundation (they meet the required nutritional values for the respective age)

� We are committed to decrease sugars, trans fatty acids and saturated fatty acids and to develop more and more products enriched with beneficial ingredients.

� We provide transparent information about our products in line with the principles of responsible communication. In 2005 we launched the Nutritional Compass and two years later, we adopted a GDA labeling scheme in Bulgaria. GDA (Guideline Daily Amounts).

� We guide our employees in the world of nutrition by providing them with Nutritional Quotient (NQ) training program and NQ e-learning platform.

� Every year we organize the largest NHW initiative in Bulgaria LIVE ACTIVELY!, in order to promote active lifestyle and balanced nutrition. LIVE ACTIVELY! is organized since 2006 in collaboration with Sofia Municipality.

� We keep an active dialog with local stakeholders. We actively

support and collaborate with over 40 governmental, non-governmental and community organizations.

� Healthy Kids in Bulgaria, our healthy lifestyle educational program for children, started in 2012 and attracted more than 5000 kids and their families in three regions in 2013

Nutrition, Health and Wellness (NHW)

2006The first edition of the

LIVE ACTIVELY! initiative is organized

2007The GDA labeling

scheme was adopted

2009Launch of NQ trainings for all Nestlé Bulgaria

employees

2012Start of the National

Program Healthy Kids in Bulgaria in 10

schools

What we do:

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23 ÞÍÈ10:00 ×ÀÑÀ, ÍÄÊ


Overview 2013

LIVE ACTIVELY! Initiative

The area of balanced nutrition and active lifestyle is one of the policy priorities of Nestlé Bulgaria. Annually, we organize and support numerous NHW initiatives, in order to promote sports and to bring nutritional knowledge and understanding. The largest initiative – LIVE ACTIVELY! – is held every year and is part of our overall program to promote active lifestyle and balanced nutrition. In 2013, LIVE ACTIVELY! was held for the seventh consecutive year in Sofia, with the traditional support of Sofia Municipality. A walking march, bicycle march, skateboards and roller-skates march, numerous locations with sports activities, games, competitions and balanced nutrition trainings motivated more than 28 000 people to participate in LIVE ACTIVELY! 2013.

All our employees are invited to take part in LIVE ACTIVELY!, together with their families and friends. In addition, we organize LIVE ACTIVELY! annual Football Tournament since 2007 and NESTLÉ Open Tennis Tournament since 2010, designed especially for our employees.

Started as a onetime event, today LIVE ACTIVELY! is the biggest active lifestyle initiative in Bulgaria. Each year, LIVE ACTIVELY! is gaining in size and more and more people are attracted to the idea of exercising, doing sports and spending an active day outdoors with the whole family. Since the beginning of the initiative in 2006, over 140,000 people have taken part in the campaign together with State authorities, the biggest Bulgarian sports stars, celebrities, friends, families and even pets.

5

at Nestlélifetomore

There’s


Overview 2013

Healthy kids in Bulgaria

In 2012 we launched the Healthy Kids in Bulgaria program in 10 schools in Sofia. The program is designed to provide nutrition education and physical activity to 7 to 13 year old students, their parents and teachers.

We aim to encourage balanced nutrition, informed choices and physical activities in the Bulgarian families and to raise awareness of family and community initiatives through public, private and community partners. Healthy Kids in Bulgaria was developed with the Bulgarian Association for Study of Obesity and Related Diseases (BASORD) and it is supported by the Ministry of Education, the Ministry of Health and Sofia Municipality.

By developing interesting and engaging balanced nutrition lessons, games and competitions, we engage children and keep their interest towards balanced nutrition. In this area, we work closely with the Bulgarian branch of the European Culinary association Euro-Toques. Balanced nutrition and active lifestyle lessons were extended, in 2013 together with cooking classes on how to prepare balanced meals.

Through the program we support the Athletics Tournament and Sports Celebration led by Olympic gold triple jump medalist Tereza Marinova. She is not only a loved Bulgarian sports legend, but also one of the main trainers in the IAAF Kids Athletics project in Bulgaria - the children's program of the International Association of Athletics Federations.

As a best practice in the area of similar community-based programs, Healthy Kids in Bulgaria became a

part of the EPHE Project, financed by the European Commission covering 7 European communities in Belgium, Bulgaria, France, Greece, Netherlands, Portugal and Romania.

Healthy Kids in Bulgaria is school-based program

providing in and after-school activities and weekend

family celebrations. As part of the program, children

and parents participate in nutrition activities and games

during the 2013-2014 school year.

5000children from 10 schools

took part in the Healthy

Kids in Bulgaria program

in 2013

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at Nestlélifetomore

There’s


Overview 2013

Youth Development

As the leading Nutrition, Health and Wellness company we are committed to enhancing people’s lives, everywhere, every day. Delivering on this commitment is shaping everything we do for our current and future employees. At Nestlé we support youth and encourage young people to achieve true fulfillment by combining the intellectual, emotional, personal and social aspects of life. We give young people the opportunity to take ownership for their future while remaining open to new perspectives and sharing our commitment to exceptional performance and to quality in everything we do. In line with our principles of Creating Shared Value and engagement with socially responsible initiatives, Nestlé Bulgaria traditionally proves its commitment to young people via the internship program of

the company developed over more than 16 years. Within of the program students can choose a short-term summer internship or a one-year traineeship. The internships give young people a chance to learn the key aspects of a diverse business with global thinking and they enjoy a lot of interest. Personal responsibility and autonomy as well as the interns’ motivation and commitment are critical for success. During the summer internships, young students from leading universities in the country and abroad have the opportunity to familiarize themselves with the functioning of the company, to participate in real-work cases and develop group projects. At the end, during an "Intern’s day", the participants receive certificates for successful completion of the program by Nestlé Bulgaria’s Country Manager.

108of all Nestlé

Bulgaria employees are 19-24 years of

age

207of all Nestlé

Bulgaria employees are 25-29 years old

100%of the participants in

one year internships in 2012 have continued their careers in the

company.

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Overview 2013

At the end of 2013, Nestlé announced

the launch of its initiative for youth employment in Europe – Nestlé needs YOUth. As part of this project, the company has committed to create 20,000 jobs for young people under 30 across Europe by the end of 2016. All countries, in which Nestlé operates, will participate in the initiative and Bulgaria is among the countries with active participation.

For the period 2014-2016, Nestlé Bulgaria will employ 330 young people, providing job opportunities to 150 young people under the age of 30, as well as internships and training programs for another 180 young people of the same age. They will have the chance to work at different levels and in different departments of the company, from production and administration to sales, marketing, finance and procurement.

The Bulgarian participation in Nestlé needs YOUth was announced at a special event by attended the company’s CEO

Juan Carlos Peralejo, Prof. Daniela Bobeva, Deputy Prime Minister on Economic Development, Prof. Aneliya Klisarova, Minister of Education and Science, Mrs.Rossitsa Iankova, Deputy Minister of Labour and Social Policy, and Mr. Nikolay Nikolov, Deputy Executive Director of the Employment Agency.

“It is important for the gove rnment to work together with the business, because it is the only way to achieve a constructive dialogue and to help young people find their place on the labor market. The more opportunities we offer them in their home country, the stronger their motivation to

stay in Bulgaria will be. I hope the example of Nestlé will be followed not only in Europe but also in Bulgaria and more and more companies will make an effort to support young people,” said Prof. Daniela Bobeva, Deputy Prime Minister for Economic Development, at the launch of the initiative.

“This forum is proof of the relationship between business and education. We are convinced that we need to provide students’ the education and training as necessary for the business. This is the only way to ensure job opportunities for young people, and talent for businesses. That is why we welcome and support Nestlé’s initiative,” said Prof. Aneliya Klisarova, Minister of Education and Science.

110positions in all

departments of Nestlé

Bulgaria await youth in

2014.

330young people will find

a job or internship at

Nestlé in 2014-2016

20 000 young people will be

employed by Nestlé in

Europe by 2016.Prof. Daniela Bobeva

Prof. Aneliya Klisarova

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Overview 2013

Nestlé Bulgaria supports a number of significant projects and events related to the development of young people in the country:

JUNIOR ACHIEVEMENT BULGARIA (JAB) GRADUATE STUDENT COMPANYJunior Achievement is one of the oldest, largest and fastest-growing nonprofits for economic education in the world. JA Bulgaria educates and inspires young Bulgarians to value free enterprise, business, and economics to improve the quality of their lives. Nestlé Bulgaria is the sponsor of one of the JA’s projects – StartUp Graduate Programme which involves young students and gives them the opportunity to understand better the role of business in community. With the support and guidance of business volunteer consultants, the program provides entrepreneurship education for college and university students. Nestlé Bulgaria reaffirms its supports commitment to act towards helping youth to get ready for entering the real business environment.

TEACH FOR BULGARIATeach for Bulgaria’s mission is to provide access to quality education to every child in Bulgaria by encouraging and training young talented and ambitious Bulgarians to be motivating leaders and teachers within the national school system and in society.

Nestlé Bulgaria embraces the organization’s mission and goals and as a corporate partner provides support, mentorship, opportunities for hiring, as well as product sponsorship.

Nestlé Bulgaria actively participates in career events organized by different organizations and university career centers. In 2013 some of the events were in Sofia at the University For National And World Economy (UNWE), the New Bulgarian University (NBU), at Sofia University and at the Technical University (TU), also in Blagoevgrad at the American University In Bulgaria (AUBG) and in Varna at the Varna Free University. Nestlé was also present at the biggest career forum for Bulgarians with international experience – “Career in Bulgaria: Why not?”. In addition, Nestlé employees including high-level managers, often share their personal and professional experience during presentations and forums in front of young audiences in many cities around the country.

The local impact of our employees has the potential to be felt internationally; the ideas of our people brought to life today are shaping our future. Their passion and pride are making Nestlé the global leader in Nutrition, Health and Wellness, enhancing lives all over the world.

Nestlé Bulgaria is the continuous

main sponsor of the “National

Career Days – Good Career,

Good Life”. The event is the

biggest Bulgarian forum for

student internships and career

orientation which takes place in

the big university centers across

the country. The forum provides

students with the opportunity

to meet with representatives

of the business and to choose

the most suitable start of their

professional career. Students

gather information about the

knowledge, skills and capabilities

required for a successful career. In

2013, National Career Days took

place in seven cities: Sofia, Varna,

Veliko Turnovo, Rousse, Svishtov,

Plovdiv and Bourgas.

“NATIONAL CAREER DAYS – GOOD CAREER, GOOD LIFE”

NATIONAL FORUM

154 000Visitors and 450 companies

have participated in The National Career Days since

is first edition in 2002

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Overview 2013

2009The first massive Safety

event was organized –

Safety Day

Our objective is to develop

strong and sustainable Safety

culture by achieving change of

our employees' mindset towards

Zero accidents. We believe that

any incident can be prevented

and we constanly hold a number

of projects, in order to educate

our people and to develop a

high level of health and safety

culture within our company. Our

employees are our ambassadors

of Safety Driving and responsible

safety working behaviour.

Since 2009 we organize Safety

Day and Safety Week events

and we unite all employees in

an entertaining and interesting

manner in training sessions

on health and safety with

corresponding activities,

tailored to the specific risks in

the working environment. 2500

employees of the company from

various units, divided into 21

groups, went through health

and safety training, based on the

specific hazards of the working

environment.

We organize safety events and trainings in collaboration with the Bulgarian Red Cross (BRC), the National Training Center at the BRC, ADRA Foundation Bulgaria and the Association of Physiotherapists in Bulgaria:

� Safe work at the office

� Safe driving

� Fire safety

� First-Aid

� Safe working at heights

� Safe handling of trucks

� “Lock and Mark” Procedure

Health and Safety

3500Nestlé Bulgaria employees

took part in our safety

events

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Overview 2013

Nestlé Bulgaria Head Office and Confectionery factory in Sofia

Nestlé factory for ice-cream production in Varna

Nestlé factories in Bulgaria

Our factory for confectionery and biscuits in

Sofia has 75 years of experience in the chocolate

industry and that is why we produce chocolate

products exported for more than 30 countries

all over the word, including many European

countries and Canada. In 2004, the factory

received the award for “Quality Champion in

the South European Region” and our chemical

and microbiological laboratories were certified

as Nestlé laboratories of the “Highest level of

accuracy of the analyses”. The factory is chosen as

competence center for confectionery in Europe

and became one of the three major centers for

the production of KIT KAT® on the continent.

In 2006, Nestlé became a shareholder in

one of the biggest ice-cream producers and

started investing in modernization and facility

reconstructions in the ice-cream factory in

Varna. In 2008, Nestlé Ice-Cream Bulgaria

restructured its production on the Balkans and

much of the production for Romania started

to be exported from the factory in Varna. As a

result, today the plant is a modern production

facility which meets the requirements for ice-

cream production of the European Union and

is certified to all European standards.

2002Nestlé Bulgaria

launched the No 1 NESTLÉ strategic

brand in confectionery - KIT KAT®

2009Nestlé made the largest investment in Bulgaria for the launch of the

new line for production KIT KAT®

2006Nestlé became a

shareholder in one of the biggest ice-cream

producers

201315,695 trees and 6.4 million kWh of

electricity were saved

Sharing best practices aimed at

protecting the environment in

the communities, in which Nestlé

operates, contributes to Creating

Shared Value. In this area we take

significant steps to reduce water

consumption in our factories. In

2013, we reduced the amount of

cubic meters of water used per

ton product by 7%, managed to

sustain the already reduced by

5.16% in 2012 levels of energy

consumption per ton product. We are

continuously implementing projects

to reduce water consumption, use of

renewable energy and other natural

resources, reducing greenhouse gas

(GHG) emissions, eliminating waste

and improving the environmental

performance of packaging. From

2008 to 2013 we held a number of

activities resulting in a reduction

in water

consumption. As a

result of the system

of waste collection

and employee

engagement, in 2013 we delivered

4 449 tons of waste for recycling.

We have saved 23 070 trees and 8.6

million kWh of electricity, as well as

56 398 cubic meters of water and 4

794 barrels of oil.

11


Overview 2013

Economic contribution

Nutrition Health and Wellness

Factories

Environmental protection

Major achievements

� In spite of the challenging economic situation, we have managed to invest sustainably in our factories.

� 146 million BGN invested for the period 2004-2013

� 70% of our products produced in the factory in Sofia is

exported for 30 countries all over the world, including many European countries and Canada

� We also continue to develop our Ice Cream factory and nowadays 30% of its production is exported

(mainly for the Balkan region) � Nestlé Bulgaria is an active

member of numerous major Industry Organizations

� Under the Nestle needs YOUth initiative we will provide 330 work or internship positions to young people under 30.

� In 2006 we started to encourage our employees to be ambassadors of Nutrition Health and Wellness with our Wellness Tip of the week newsletter

� NQ (Nutritional Quotient) trainings for all our employees were launched in 2009 and the NQ e-learning platform was developed in 2012

� We actively promote the trainings with NQ Posters and Handouts Series for our factories

� 100% of our products have GDA and Nutritional compass labeling

� No single kids' product is launched on the market without Nutrition Foundation

� Tendency for decreasing Sugars and Fats

� Since 2006 the LIVE ACTIVELY! initiative has involved more than 140.000 people. In addition, we organize annual football and tennis tournaments for our employees

� The Healthy Kids in Bulgaria program involved over 5.000 children and their families in 13 schools in Sofia

� From 2008 to 2013 we held a number of activities, resulting in a reduction in water consumption

� We have launched close rotations for hot and

cold water, including air conditioning

� We use cold and not fresh water for cooling, and we have built a new cooling tower for additional water savings

� We have commissioned highly efficient boilers and system for detailed monitoring of consumption

� As a result of our technology improvements we reduced the amount of cubic meters of water used per ton product by 7% in 2012

� maintained the already reduced by 5% levels of

energy consumption per ton production.

� As a result of our waste collection system and employee engagement we delivered 4 449 tons of waste for recycling.

� We have saved 23 070 trees and 8.6 million kWh of electricity, as well as 56,398 cubic meters of water and 4 794 barrels of oil

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Overview 201313

nestlé bulgaria sustainability and creating shared value overview

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