Spring Press Conference February 23, Name of chairman

Transcription

1 Spring Press Conference February 23, 2006

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 SPRING PRESS CONFERENCE 2006

3 Key Figures % Change 2004/2005 % of Sales Sales CHF m + 7.5% EBITA CHF m + 8.9% 12.9% Net Profit CHF m % 8.8% 3 SPRING PRESS CONFERENCE 2006

4 Total Sales and Real Internal Growth from 1995 to 2005 CHF mio 100'000 90'000 80'000 70'000 60'000 50'000 40'000 30'000 20'000 10'000 0 Not restated RIG 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 4 SPRING PRESS CONFERENCE 2006

5 EBITA (mio CHF) mio CHF 14'000 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 0 Group EBITA Margin over last 10 years Nestlé Group EBITA and EBITA Margin from 1996 to % 10.3% 10.3% 11.1% 11.8% 11.8% 12.3% 12.5% 12.6% 12.9% % of Sales Not restated; New NPS definition in SPRING PRESS CONFERENCE % 13.0% 12.5% 12.0% 11.5% 11.0% 10.5% 10.0% 9.5% 9.0%

6 The Four Factors of Group Sales % Growth 15% 10 years average 10% 5% 0% 1.0% 2.3% 3.4% -1.4% OG 5.7% -5% OG: Organic Growth -10% RIG Pricing & Other Acquisitions/Divestitures FX Impact Not restated; in 2001: including TTS effect 6 SPRING PRESS CONFERENCE 2006

7 The Nestlé Model 1. Long-Term Organic Growth Target 5-6 %, 2. Continued year after year improvement of EBITA margin, EBITA Margin 3. Capital efficiency / Business ROIC = Resulting in an industry outperforming, long-term total shareholders return. 7 SPRING PRESS CONFERENCE 2006

8 Food Market Growth and Nestlé Sales Indices Manufacturing value-added in food consumption actual US$, per capita Nestlé per capita sales Sustenance Convenience Pleasure and diversity Nutrition Health and Wellness WellBeing Per-capita income (PPP) US$ 4,000 US$ 13,000 US$ 22,000 US$ 28,000 Sources: UNIDO (value-added), WIDER and World Bank; Nestlé F&C; analysis EIR 8 SPRING PRESS CONFERENCE 2006

9 World Population by Income Groups '000 6'000 5'000 4'000 People, mn > 28'000 22'000-28'000 PPP$ 13'000-22'000 PPP$ 3' '000-13'000 PPP$ 2' PPP$ 1' < 1500 PPP$ Sources: UN WIDER and World Bank (also for outlook on economic growth ); analysis EIR 9 SPRING PRESS CONFERENCE 2006

10 GLOBE Program Status More than 1 3 of Nestlé s food and beverage sales: over 75,000 users of the system over 300 factories over 300 distribution centers over 200 sales offices 10 SPRING PRESS CONFERENCE 2006

11 Spring Press Conference Paul Polman

12 Restatement of 2004 Results 2004 results have been restated following the first application of IFRS 2 share-based payment and the discontinued operation resulting from the announcement in December 2005 for the chilled dairy activities in Europe, where applicable Full Year RIG & Organic Growth also restated. 12 SPRING PRESS CONFERENCE 2006

13 2005: Delivering the Nestlé Model: Improvement in Key Performance Measures Strong organic growth both F&B and Pharma: 6.2% EBITA margin up 20bps to 12.9%; up 1 Billion CHF Improvement in Return on invested capital: +50bps Underlying EPS up 12.9%; dividend 9 CHF up 12.5% Strong cash flow - 1st buy-back complete; 2nd begun 4.5 Billion CHF returned to shareholders: up 59% vs SPRING PRESS CONFERENCE 2006

14 Zones: Organic Growth Broad Based Improvement 12% sales CHFbn America Europe AOA Water Other activities Group SPRING PRESS CONFERENCE 2006

15 Product Groups: Organic Growth Above 5-6% Target 12% sales CHFbn Beverages Milk products, Nutrition and Ice cream Prepared dishes and cooking aids Chocolate, confectionery and biscuits PetCare Pharma Group SPRING PRESS CONFERENCE 2006

16 P&L to EBITA: Savings Compensate Cost Pressures FY 2004 FY 2005 Diff. basis points As % of sales Restated (rounded) Sales (CHF million) 84'690 91' Cost of goods sold (41.7) (41.7) - Distribution (8.1) (8.1) - Marketing & Admin (35.8) (35.7) 10 R & D (1.7) (1.6) 10 EBITA restated following the first application of IFRS Share-based Payment and the discontinued operation resulting from the announcement made in December 2005 for the Chilled Dairy activities in Europe, where applicable. 16 SPRING PRESS CONFERENCE 2006

17 P&L: EBITDA to Net Profit FY 2004 FY 2005 Diff. basis points As % of sales Restated (rounded) EBITDA EBITA Net other income/expenses (0.8) (1.0) (20) Amortisation of goodwill (1.9) Net financing cost (0.8) (0.6) 20 Taxes (2.8) (2.9) (10) Discontinued operations Share of results of Associates (90) Profit for the period of which Attributable to Minority interests (0.5) (0.6) (10) Attrib. to the Group (Net profit) Underlying EPS (CHF) % 2004 restated following the first application of IFRS Share-based Payment and the discontinued operation resulting from the announcement made in December 2005 for the Chilled Dairy activities in Europe, where applicable. 17 SPRING PRESS CONFERENCE 2006

18 Cash Flow and Financial Position Remain Strong Operating and free cash flow decline slightly due to CHF600 million cash injection to pension funds Cash conversion cycle unchanged at 47 days Capital expenditure down 10bps as % of sales Net debt declines from CHF10.2 bn to CHF9.6 bn Proposed dividend up 12.5% to CHF 9 per share 3 billion share buy-back under way The Nestlé Model: Creating value for shareholders 18 SPRING PRESS CONFERENCE 2006

19 Actively Managed Capital Structure Benefits Shareholders: Cash Returns CHF bn Net debt % Share buy back Dividend % * * 2006 assumes completion of 2nd buy-back programme and payment of proposed CHF 9 dividend 19 SPRING PRESS CONFERENCE 2006

20 Spring Press Conference Paul Polman

21 Dividend Evolution in CHF Figures adjusted to number of shares 21 SPRING PRESS CONFERENCE 2006

22 Dividend Payments in millions of CHF CHF SPRING PRESS CONFERENCE 2006

23 Nestlé Corporate Social Responsibility 23 SPRING PRESS CONFERENCE 2006

24 Latin America 24 SPRING PRESS CONFERENCE 2006

25 Nestlé Corporate Governance 25 SPRING PRESS CONFERENCE 2006

26 Share Capital by Investor Type % 80% % 40% 20% % Institutionals Private Shareholders 26 SPRING PRESS CONFERENCE 2006

27 Distribution of Share Capital by Nationality since Switzerland USA France UK Germany 27 SPRING PRESS CONFERENCE 2006

28 Spring Press Conference

29 Chilled Dairy Brands 29 SPRING PRESS CONFERENCE 2006

30 How the Food Service Industry Operates 30 SPRING PRESS CONFERENCE 2006

31 Why Food Service is Attractive Estimated global Sales (CHF bio. 2004) Big and growing business opportunity Relevant manufacturer market CHF 600 billion Consumer trends drive growth 1.9 Total = 19.8 Customer consolidation 31 SPRING PRESS CONFERENCE 2006

32 CPW Volume Growth Since % SPRING PRESS CONFERENCE 2006

33 Record Cereal Share* 22.4% 20% 15% 10% 5% 0% *Excluding Sweden, Australia and New Zealand 33 SPRING PRESS CONFERENCE 2006

34 Next Media Events 6 April 2006 Annual General Meeting 25 April 2006 First Quarter Sales 19 October 2006 Autumn Press Conference