2014.06 Nestlé H1 results investor call presentation

August 7th, 2014 Half Year Results
Wan Ling Martello
Chief Financial Officer
2014 Half Year
Results

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
Disclaimer

+ CHF
2.9 bn
(+ CHF 2.7 bn
reported)
Free
Cash Flow
(in CCY)
Resilient performance fuelled by top line growth
Outlook confirmed
3
Organic
Growth
+ 4.7%
(FX - 8.8%)
+ 30 bps
(- 10 bps reported)
+ 3.6 %
(- 7.1% reported)
Trading
Operating Profit
(in CCY)
Underlying
Earnings Per Share
(in CCY)
CCY = Constant Currency

Resilient shareholder returns
4
Maintaining our
Gold standard & current
Rating Agency Ratios
“Nestlé Board of Directors approved a CHF 8 bn share
buyback programme to be completed by the end of 2015”

Consistent Group Strategy
5
 Strategic Transformation
 Organisational Transformation

Each region includes Zones, Nestlé Waters, Nestlé Nutrition, Nestlé Professional, Nespresso and NHSc; OG = Organic Growth, RIG = Real Internal Growth
Sales
RIG
OG
(in CHF)
6
Broad based regional growth
Asia,
Oceania &
Africa
12.9 bn
+4.2%
+7.5%
Americas
17.8 bn
+2.4%
+4.9%
Europe
12.2 bn
+2.3%
+1.4%

23.9 bn
56%
+0.6%
19.1 bn
44%
+9.7%
7
Developed and Emerging markets growth
EmergingDeveloped
Sales
% of Group sales
OG
(in CHF)
OG = Organic Growth

15.1
15.0
15.4
-20 bps
-20 bps
+30 bps
-10 bps +10 bps
+40 bps
TOP
2013
June
COGS Distribution Marketing &
Administration
R&D Net Other
Trading
Expenses
TOP
2014
June
CCY impact TOP
2014
June at CCY
-10 bps
+30 bps
Trading Operating Profit Margin
8
 Trading Operating
Profit margin
+30 bps in constant
currency
 Consumer facing
marketing spend
+5% in constant
currency
TOP = Trading Operating Profit, CCY = Constant Currency

Zone Europe
9
Sales
in CHF bn
7.3 RIG % 2.0 OG % 0.6 TOP % 14.8
 Growth driven by innovation and premium
 Nescafé Dolce Gusto, PetCare, Frozen Pizza highlights
Confectionery, Culinary improved momentum
 Western Europe
– Good growth in Switzerland, Netherlands and Austria
– France, Italy and Germany improved, UK still subdued
 Eastern Europe:
– Russia highlight, pick-up in other regions
 TOP margin -10 bps: mainly impairments

Zone Americas
10
Sales
in CHF bn
12.5 RIG % 1.7 OG % 4.9 TOP % 18.0
 North America
– Positive RIG in a subdued environment
– Frozen & Ice Cream still difficult, but with some progress
– Coffee-mate and PetCare, good growth due to innovation
 Latin America
– Double digit growth weighted to pricing
– Brazil strong mainly due to Ninho, Nescau, Nescafé Dolce Gusto
– Mexico challenging, good RIG in Coffee
– PetCare continued strong momentum
 TOP margin +10 bps: lower restructuring and others expenses

 RIG impacted by higher pricing
 Good growth for Milo, Maggi, Creamers and premium
 Emerging markets
– Good growth in Turkey, Pakistan, Africa and Philippines
– South Asia recovered, China remained challenged
 Developed markets
– Japan with good start to the year
 TOP margin -20 bps: currency and higher dairy costs
Zone Asia, Oceania & Africa
11
Sales
in CHF bn
8.9 RIG % 1.9 OG % 4.7 TOP % 18.9

 Broad based growth:
– Premium international brands
– Regional brands
– Nestlé Pure Life
 Developed markets
– Good RIG partly offset by pricing
– UK a highlight
 Emerging markets
– Growth across most regions
 TOP margin +80 bps: growth and cost reductions
Nestlé Waters
12
Sales
in CHF bn
3.7 RIG % 7.3 OG % 6.1 TOP % 10.4

 Double digit growth in Infant Formula and Infant Cereals
 Emerging markets driving growth:
– China and Middle East highlights
 US: Focus on value generation
 NAN and Illuma driving Infant Formula growth
 TOP margin +110 bps:
– Active Portfolio Management
– Good Wyeth Nutrition performance
Nestlé Nutrition
13
Sales
in CHF bn
4.7 RIG % 3.8 OG % 7.9 TOP % 21.1

Others
14
Sales
in CHF bn
5.9 RIG % 4.7 OG % 5.9 TOP % 18.4
Nespresso
 Strong global growth despite increased competition
 Range extension, new machines and new boutiques
 Good response to the launch of VertuoLine
Nestlé Professional
 Growth momentum from emerging markets
 Soft OOH environment in developed markets
Nestlé Health Science
 Performance driven by innovation
 Boost, Meritene and Nutren with solid growth
Other TOP margin
 -80 bps: marketing and currencies

4.9 5.3
7.2
5.8
0.8
5.7
4.0
7.6
-0.4
0.0 0.3
3.4
4.8 5.3
Products
Powdered
and Liquid
Beverages
Water Milk products
and
Ice cream
Nutrition
and
HealthCare
Prepared dishes
and
cooking aids
Confectionery
% Organic Growth
% Real Internal Growth
15
Sales
(in CHF bn)
9.8 3.4 8.1 5.7 6.4 4.2 5.4
TOP% 23.8 11.2 16.0 19.9 12.8 10.6 19.9
in bps -20 bps +50 bps +10 bps +130 bps -70 bps -210 bps +90 bps
PetCare

Trading operating profit 15.1 15.0 -10
Net other operating income/expenses (0.2) (0.6) -40
Operating Profit 14.9 14.4 -50
Net financial income/expenses (0.7) (0.7) -
Profit before taxes, associates and JVs 14.2 13.7 -50
Taxes (3.9) (3.8) 10
Share of results in associates and JVs 1.5 1.4 -10
Profit for the period 11.8 11.3 -50
of which attributable to non-controlling interests 0.5 0.5 -
Attributable to shareholders of the parent 11.3 10.8 -50
Basic EPS (CHF) as reported 1.60 1.45 -9.5%
Underlying EPS (CHF) as reported 1.69 1.57 -7.1%
Underlying EPS (CHF) constant currencies +3.6%
Income Statement
16
June 30
2013
%
June 30
2014
%
Total Group in bps

3.1
2.7 2.9
-0.5
-0.7
+0.4
+0.4
FCF
30 June
2013
Operational
Improvement
Working
capital
Capex Other * FCF
30 June
2014
FCF
30 June
2014
at CCY
-0.4
17
Free Cash Flow CHF 2.9 bn in Constant Currency
in CHF bn
* Mainly taxes and treasury activities

Discipline in use of cash
18
 Investment in the business with
greater rigour in capital allocation
 Maintain a sustainable dividend policy
 Additional return to shareholders via share buy-back

Summary
19
 Profitable organic growth in a volatile
trading environment
 Both Developed and Emerging markets positive
 Execution of the Nestlé Roadmap
 Full-year outlook confirmed
Organic growth around 5% and improvements in margins, underlying
earnings per share in constant currencies and capital efficiency

August 7th, 2014 Half Year Results20
2014 Half Year
Results
Discussion

Appendix
21

2.0 0.6 1.7
4.9
1.9
4.7
7.3
6.1
3.8
7.9
4.7
5.9
Operating Segments
Zone
Europe
Zone
Americas
Zone
Asia, Oceania,
Africa
Nestlé Waters Nestlé Nutrition Other
22
Sales
(in CHF bn)
7.3 12.5 8.9 3.7 4.7 5.9
TOP% 14.8 18.0 18.9 10.4 21.1 18.4
in bps -10 bps +10 bps -20 bps +80 bps +110 bps -80 bps
% Organic Growth
% Real Internal Growth

-18.1
-14.7
-19.6
-6.9
+2.7 -0.7
Net Debt
31 December
2012
Net Debt
1 January
2014
Dividends Free Cash
Flow
Other * Net debt
30 June
2014
-4.9
Net Debt evolution impacted by the dividend
23
in CHF bn
* Mainly Treasury shares, M&A and FX

Weighted average rate
HY 2013 HY 2014 % Var.
1 US Dollar USD 0.94 0.89 -4.9
1 Euro EUR 1.23 1.22 -0.7
100 Brazilian Reais BRL 46.22 38.79 -16.1
100 Chinese Yuan Renminbi CNY 15.12 14.48 -4.2
100 Mexican Pesos MXN 7.46 6.79 -8.9
1 Pound Sterling GBP 1.44 1.49 2.9
1 Canadian Dollar CAD 0.92 0.81 -11.8
1 Australian Dollar AUD 0.95 0.82 -14.0
100 Philippine Pesos PHP 2.27 2.00 -11.7
100 Japanese Yen JPY 0.98 0.87 -11.1
Currency overview
24

FX Impact
HY 2014
Zone Americas -12.8%
Zone Europe -2.8%
Zone AOA -10.0%
Nestlé Waters -5.9%
Nestlé Nutrition -10.3%
Other -5.8%
Total -8.8%
FX impact
25

2014.06 Nestlé H1 results investor call presentation

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2014.06 Nestlé H1 results investor call presentation