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A comprehensivegrowth modelin the AmericasLaurent Freixe,Nestlé CEO Zone AmericasDeutsche Bank Annual Global Consumer ConferenceJune 13, 2018 - ParisMay 8, 2018 Footer to be used for presentation topic or legal disclaimer language 1
DisclaimerThis presentation contains forward looking statements which reflect Management’scurrent views and estimates.The forward looking statements involve certain risks and uncertainties that couldcause actual results to differ materially from those contained in the forward lookingstatements. Potential risks and uncertainties include such factors as general economicconditions, foreign exchange fluctuations, competitive product and pricing pressuresand regulatory developments.2 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
The Americas account for 45% of Nestlé group salesZone AMS salesby management responsibilitySales (2017)Nestlé in the AMS:CHF 40.7 billion*Rest of ZoneAmericasof which,Zone-managed:CHF 31.3 billion3 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, ParisBrazilUSANestlé PurinaPetcareNorth America*As reported before 2017 restatement and reorganization of infant nutrition business.
Zone AMS 2017 sales by product categoryOther CategoriesPetcare16%26%17%Ice Cream28%7%7%7%Confectionery8%12%9%9%9%Ambient Dairy9%Nestlé Nutrition4 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris10%15%11%Frozen FoodCoffee & Beverages** Coffee & Beverages: Soluble Coffee, Nescafé Dolce Gusto, Coffee Enhancers and Roast & Ground.
Strong ability to win with 88% of sales in #1 position5 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
Unique portfolio of powerful brandsGlobal leading brandsIconic local brands“Born Pure” brands*6 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris*Pending regulatory approval.
Key external drivers of industry transformationChangingConsumptionTrendsLow GrowthEnvironmentEvolving Market Dynamics*PricingTransparencyRising MarginExpectationsStart-up proliferation:Small players market share up 140bpsChannels sales evolution:Low growth in NAGrocery, Mass,Drug, Super Centers-330bpsE-commerceBrazil challengingClub, Value,Natural, SpecialtyE-commerce 260bpspricingalgorithms.Aggressiveindustry-wide costcutting in a lowgrowth environment. 36% CAGRRest of LATAM growing7 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris*2017 vs 2013: Nestlé analysis based on Nielsen Syndicated Data, Homescan and industry estimates for F&B U.S.
Zone AMS: fit to win with consumers and customers8 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
Achieving efficiencies across the ZoneTotalDeliveredCost *Agility Lean Operations TPM / Asset intensityCategory focused units with acommon back office Digital workplace withcollaborative toolsOrganization de-layering andincreased span of control Integration of Nestlé Professionaland NutritionSimplification and specification reduction HQ footprint Nestlé U.S. Procurement Acceleration 2.0 Fit to win LATAM Factory 2020 NBE / Shared Services: new hubin Paraguay-1 layeracross the organization9 June 13, 2018 StructuralCostDeutsche Bank Annual Global Consumer Conference, Paris-6%**per yearOn track with2020 targets*Total delivered costs: marketing and other general expenses, fixed factory overheads, variable and fixed distribution, and cost of goods sold.**Includes cost reduction and cost avoidance.
Agility to win: Category focused units supported by a commonback officeZone AMS supportedZone AMS managedGlobalRegional Nestlé Waters Nestlé Purina Pet Care Nestlé Health Science Nestlé Professional Nespresso Nestlé Nutrition Nestlé Skin HealthLocal Beverages Confectionery Culinary Dairy Other local businessesSupport by a common back office10 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
Total Delivered Cost: Factory 2020 Lean factory organisation Challenge the Status Quo Focus on cost cash cases Shop floor empowered Enabled by NCE/TPM11 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
Pursuing a holistic growth modelStrategicallyevolving ourportfolioInnovating ourbrands toaddress keyconsumertrendsExploring newinnovationand businessmodelsInvesting inhigh growthchannelsDeploying new growth-enabling capabilities12 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, ParisStrengtheningour consumerengagement
Strategically evolving our portfolioDisposed: USD 2.8 billion Sales:2015-2017 CAGR: USD 900 millionnegative sales growthUnder strategic review:13 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, ParisAcquired: USD 3.0 billion Sales:2015-2017 CAGR: USD 900 milliondouble-digit sales growthRecently announced:
Building a unique coffee portfolio with three iconic brands14 World’s preferred coffee brand Nescafé Dolce Gusto, coffee shopstyle portioned coffee system June 13, 2018 Stylish, coffee connoisseur brand,European flair, undisputed superiorqualityLeading premium portioned coffeebrandDeutsche Bank Annual Global Consumer Conference, Paris Iconic coffee shop brand, Americanlifestyle Leadership in North Americanpremium R&G and portioned coffeecategories*Consumer products & Foodservice. Excludes sales made in coffee shops and RTD products.
Innovating our brands to leverage trends15 Superior NutritionOrganic / NaturalFood IntolerancePlant-basedLocal originsReady-to-DrinkSuper PremiumConvenienceJune 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
Exploring new innovation models16 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
Investing in high growth channelsE-commerceClubs 38% growth in Q1, 2018 Customizable capabilities totap into growing opportunities Enhance e-commercefundamentals (search, content,packaging, personalization)Proximity formats areredefining the trade landscapeIncrease in millennials buyingclub memberships Accesibility of a «close tohome store», with the mainbenefits of a large one Broad Portfolio of InnovativeFood & Beverage Solutions Better pricing and fresherproducts Complete Meal Solutions &Sides Developing strong digitalplatforms in OOHImproving digital presenceand in-store experiencethrough technologyGlobal Amazon AccelerationTeam to drive new initiativesand joint profitable growth 17Out of HomeProximity Channel June 13, 2018 Promotion of PremiumizationDeutsche Bank Annual Global Consumer Conference, Paris
Strengthening the consumer engagement model18 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
Deploying new growth-enabling capabilitiesDigital Centers ofSales analyticsFlexibleShared services inDigital RecruitingExcellence anddriving bettermanufacturing forParaguay, Braziland analytics toeBusiness Units topromotion andsmaller, fasterand Panama toimprove hiring andaccelerate newassortmentlaunches and testfree-up resourcescandidatesgrowth-enablingstrategies.& learn.to invest in growth.experiences.capabilities.19 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
The impact of science and technology20 FacetsMicroaereationRecycled PET30% less sugarEnhanced taste100% recycled PETJune 13, 2018 Deutsche Bank Annual Global Consumer Conference, ParisHM-O* NutritionReplication and productionof two HMO moleculesMCT** in PetcareAlertness&mental sharpness*Human Milk Oligosaccharides **Medium Chain Triglycerides
Investing in our industrial footprint21 Hartwell, U.S.Teno, ChileNantli-Lagos, MexicoSilao, MexicoAllentown, U.S.Montevideo, UruguayJune 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
Creating sustainable economic, social and environmental valueYouthEmploymentNutrition, Healthand Wellness Focus efforts on children nutrition educationprograms: Nestlé For Healthier Kids Continuous product reformulation andinnovation to be the best nutritional optionfor consumers 3rd Pacific Alliance Youth Summit 1st Mercosur Youth Summit Alliances with over 100 regional and localstakeholders and 131 partnerships withgovernments, NGOs and academiaEnvironmentalSustainability Water Stewardship programs in every factoryacross Zone AMS State-of-the-art pet food factory in Teno, Chile,no waste to landfill, natural gas boiler reducingGHG by 23%, and 100% of electrical energycomes from non-conventional renewablesources Drive Zero Waste Landfill in all own DistributionCenters22 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
Zone AMS focused on reigniting growth with improved returnsRIG / OG % positive 0.3-0.4-0.5-0.61.220.30.91.60.719.70.2-0.42017AS REPORTED June 13, 2018 20162017Q1 2018INCL. NUTRITIONRIG23Significant improvement in UTOP %*PRICINGDeutsche Bank Annual Global Consumer Conference, Paris*As reported before 2017 restatement and reorganization of infant nutrition business
In summary Change in the competitive landscape has never been this fast Driving a mindset of continuous transformation to fuel growth Pursuing a holistic growth model, including internal and external innovation24 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
Thank you25 June 13, 2018 Deutsche Bank Annual Global Consumer Conference, Paris
growth model in the Americas Laurent Freixe, Nestlé CEO Zone Americas Deutsche Bank Annual Global Consumer Conference June 13, 2018 - Paris. . Deutsche Bank Annual Global Consumer Conference, Paris Global Regional Local Beverages Confectionery Culinary Dairy Other local businesses Nestlé Purina Pet Care Nestlé Professional
