2010.06.21 - 06 - Chocolate Presentation (M.Melchior ... · Confectionery Chocolate faster growing...
Transcript of 2010.06.21 - 06 - Chocolate Presentation (M.Melchior ... · Confectionery Chocolate faster growing...
Marcelo MelchiorHead of Confectionery SBU
June 2010Nestlé Investor Seminar
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Disclaimer
Marcelo Melchior NIS Presentation - Confectionery2 June 2010
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.
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Nestlé position in the face of consolidation
Marcelo Melchior NIS Presentation - Confectionery3 June 2010
A growth categoryA growth category
Leverage distributionLeverage distribution
Leverage scaleLeverage scale
Address portfolio mix Address portfolio mix
Emerging marketsEmerging markets
3rd parties’acquisition rationale3rd parties’acquisition rationale
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Confectionery competitive landscape
Marcelo Melchior NIS Presentation - Confectionery4 June 2010
Nestlé is growing faster than the category
Source: Euromonitor Source: Euromonitor and internal records
14.914.5
7.9
4.6 4.5
3.0
2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Kraft / Cadbury Mars Nestlé Hershey Ferrero Perfetti Lindt
Confectionery global market share
5.0%
2.8%
8.1%
6.1%
1.4%
13.4%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
World Established Emerging
Nestlé Confectionery Growth v CategoryCAGR 2006 -09
Confectionery Nestlé
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Confectionery Chocolate faster growing than Sugar & Gum in emerging markets
Marcelo Melchior NIS Presentation - Confectionery5 June 2010
Source: Euromonitor: RSV is Retail Sales Value
Chocolate
The biggest category overall and in the emerging markets
The fastest growing category in the emerging markets
Nestlé well-positioned as the leader in chocolate in emerging markets
5.3%
2.7%
10.8%
3.9%
2.1%
5.8%5.8%5.1%
6.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
World Established Emerging
CAGR 2006-09
Chocolate Sugar Gum
0
20'000
40'000
60'000
80'000
100'000
120'000
World Established Emerging
Confectionery Category RSV 2009 CHF
Chocolate Sugar Gum
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Key trends in chocolate
Marcelo Melchior NIS Presentation - Confectionery6 June 2010
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Creating Shared Value in ChocolateA holistic approach
Marcelo Melchior NIS Presentation - Confectionery7 June 2010
Nutrition, Health & Wellness
Environmental Sustainability
Sustainable Sourcing
Where does it come from?
How was it made?
What’s in my food?
Consumer preference
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Chocolate competitive landscape
Marcelo Melchior NIS Presentation - Confectionery8 June 2010
15.5
14.6
12.8
7.46.7
3.6
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
Kraft / Cadbury Mars Nestlé Ferrero Hershey Lindt
Chocolate global market share
5.3%
2.7%
10.8%
6.0%
1.8%
13.1%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
World Established Emerging
Nestlé Chocolate Growth v CategoryCAGR 2006-09
Chocolate Nestlé
Nestlé Chocolate growing faster than the category
Chocolate is 80% of Nestlé Confectionery and has 44% of sales in Emerging Markets
Source: Euromonitor Source: Euromonitor and internal records
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Nestlé: the leader in Chocolate in emerging markets
Marcelo Melchior NIS Presentation - Confectionery9 June 2010
17.9%
15.5%
8.6%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Nestlé Kraft / Cadbury Mars
Chocolate market share in Emerging Markets
Source: Euromonitor
ü Emerging markets are 44% of our business
ü High growth (13.1% CAGR versus category 10.8% in EMs) with above average profit margins
ü No 1 or 2 positions in 24 emerging markets
ü Lighter eating focus with wafer and extruded snacks plays to Nestlé strength
ü Portfolio focus on affordability with CHF 700 million sales in PPP format
ü Strong local brands
ü Strong distribution
Nestlé well positioned in emerging markets to benefit from economic growth
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Growing affluence & retail development will driveconsumption in emerging markets
Marcelo Melchior NIS Presentation - Confectionery10 June 2010
ü Nestlé well positioned in emerging markets to benefit from economic growthü Chocolate consumption grows with purchasing powerü Affordable treat for emerging consumers
At or approaching 1 kg per head
At approx. 0.1 kg per head
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2001 2002 2003 2004 2005 2006 2007 2008 2009
Shark Sales growth
2001 2002 2003 2004 2005 2006 2007 2008 2009
Munch Sales growth
Light eating in India and China: MUNCH and Nestlé “Shark” Wafer
Marcelo Melchior NIS Presentation - Confectionery11 June 2010
Sales value CAGR 2001-09 18.0% value increased 4x
2001 2002 2003 2004 2005 2006 2007 2008 2009
Munch Volume growth
Volume CAGR 2001-09 15.3%Volume increased 3x
2001 2002 2003 2004 2005 2006 2007 2008 2009
SHARK Volume
Volume CAGR 2001-09 21.1%Volume increased 4.5x
Sales value CAGR 2001-09 19.9% value increased 4.7x
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Strengthening position in established markets
Marcelo Melchior NIS Presentation - Confectionery12 June 2010
Profitability improved by 210bps in last 3 years
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KIT KAT – innovation driving growth of CHF1.4 billion brand
Marcelo Melchior NIS Presentation - Confectionery13 June 2010
BACK TO BASICS APPROACH AND LAUNCH OF SENSES
Re-focused on core of the brand
Strong consumer promotion programme
Light eating unique positioning
PPP formats launched 2009
CAGR 2007-09: Volume +4% pa
CAGR 2007-09: Value +7.4% pa
Growing market share year on year
Global No 2 Confectionery countline
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Significant improvement in profitability
Marcelo Melchior NIS Presentation - Confectionery14 June 2010
Driven by strong margin improvement in established markets (2006-2009 210bps)
7.0%
9.0%
11.0%
13.0%
15.0%
17.0%
19.0%
21.0%
2006 2007 2008 2009
EBIT% Comparision
Kraft Cadburys Hershey's Lindt Nestlé Confectionery
Our performance is favourably comparable to our competitors (Chart not adjusted for differences in accounting)
11.2% 11.3% 11.5% 11.6%
13.1%13.6%
2004 2005 2006 2007 2008 2009
Nestlé Confectionery EBIT%
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Nestlé strengths in the face of consolidation
Marcelo Melchior NIS Presentation - Confectionery15 June 2010
A growth categoryA growth category
Leverage distributionLeverage distribution
Leverage scaleLeverage scale
Address portfolio mix Address portfolio mix
Emerging marketsEmerging markets
3rd parties’acquisition rationale3rd parties’acquisition rationale
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Nestlé strengths in the face of consolidation
Marcelo Melchior NIS Presentation - Confectionery16 June 2010
A growth categoryA growth category
Leverage distributionLeverage distribution
Leverage scaleLeverage scale
Address portfolio mix Address portfolio mix
Emerging marketsEmerging markets
3rd parties’acquisition rationale3rd parties’acquisition rationale
Nestlé is achieving above category growthNestlé is achieving above category growth
Nestlé already has global reachNestlé already has global reach
Leveraging Nestlé in the Market (scale of total Nestlé F&B) Leveraging Nestlé in the Market (scale of total Nestlé F&B)
Nestlé’s balanced portfolio, countlines, tablets, giftingNestlé’s balanced portfolio, countlines, tablets, gifting
Nestlé has most global coverage & leadership in Emerging MarketsNestlé has most global coverage & leadership in Emerging Markets
Nestlé’s Position TodayNestlé’s Position Today
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Conclusion: Nestlé Confectionery
Marcelo Melchior NIS Presentation - Confectionery17 June 2010
ScaleScale
Access to emerging marketsAccess to emerging markets
Established marketsEstablished markets
GrowthGrowth
Sales of CHF 12 billionSales of CHF 12 billion
44% sales, above average EBIT44% sales, above average EBIT
Solid business with improving performanceSolid business with improving performance
Faster than category especially in emerging marketsFaster than category especially in emerging markets
Well-positioned to drive market shares and continue to improve performance
Marcelo MelchiorHead of Confectionery SBU
June 2010Nestlé Investor Seminar