2013 Half Year Results Presentation...August 8th, 2013 Half Year Results 2013 Half Year Results Wan...

August 8th, 2013 Half Year Results

2013 Half Year Results

Wan Ling Martello

Chief Financial Officer

Roddy Child-Villiers

Head of Investor Relations

0


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.

1


2013 Half Year Highlights

RIG acceleration to 2.7%, all regions contributed

Trading operating profit margin +20 bps to 15.1%

Operating cash flow of CHF 5 billion

Input cost environment:

reduced pricing but benefit to margin

EPS up 3.4% reported;

underlying +7.2% in constant currencies

2


2013 Half Year Highlights

Developed markets continued to grow

Emerging markets up over 8%

Double digit in Latin America, Russia, parts of AOA

Outlook:

We expect the growth momentum seen in the first half to

continue in the second half, allowing us for the full year to

deliver, in line with our commitments, around 5% organic

growth with an improvement in margins and underlying

earnings per share in constant currencies

3


Operating Segments Growth

1.8 1.5

4.0

1.8

4.3 3.9

0.5

5.0 5.0

2.2

6.5

5.0

ZoneEurope

ZoneAmericas

ZoneAsia, Oceania

& Africa

NestléWaters

NestléNutrition

Other

% RIG % OG

3.7 9.4 6.0 5.0 13.6 7.5 Sales CHF bn rounded

4


Operating Segments Margin Evolution

14.9 17.8 19.1

10.0

20.0 19.2

ZoneEurope

ZoneAmericas

ZoneAsia, Oceania

& Africa

NestléWaters

NestléNutrition

Other

H1 2012 TOP% H1 2013 TOP%

+20 bps +60 bps

No change

+30 bps

-10 bps

-60bps

5

TOP = Trading Operating Profit


Product Groups Growth

4.6

2.4

-0.6

2.4 3.6

4.7 4.5

-0.2

4.7

7.1

% RIG % OG

Prepared Dishes

& Cooking Aids

PetCare Confectionery Milk Products

& Ice Cream

Powdered &

Liquid Beverages

6.9 5.5 4.6 8.6 10.1 Sales CHF bn rounded

6


Product Groups Margin Evolution

24.0

15.9 13.5 12.7

19.0

Powdered& Liquid…

Milk Products& Ice Cream

Prepared Dishes& Cooking Aids

Confectionery PetCare

H1 2012 TOP% H1 2013 TOP%

+30 bps -110 bps +80 bps

+100 bps

-120 bps

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Each region includes Zones, Nestlé Waters, Nestlé Nutrition, Nestlé Professional, Nespresso and NHSc; OG = Organic Growth, RIG = Real Internal growth

Asia,

Oceania &

Africa

13.4 bn

+6.3%

+5.0%

Americas

19.4 bn

+5.0%

+2.1%

Europe

12.4 bn

+0.6%

+1.5%

Sales

OG

RIG

(CHF)

8


Americas

Challenges:

Ice Cream

PetCare Speciality & Dog

Frozen versus Fresh

Frozen “nutritionals”

Water competitive

environment

In Latin America

Economic environment

Input costs

Positives:

PetCare Growth & Cats,

Treats & Litter

Stouffer’s & DiGiorno

Water market growth

Infant Nutrition

Coffee, Chocolate,

Coffee-Mate

Key categories in

Latin America

9


Europe

Challenges:

The Macro situation

Southern Europe

Water & Ice Cream

Nestlé Professional

10

Positives:

Growth & reinvestment

Customer service levels,

innovation

Premiumisation, value

focused offers

Russia, Germany

& Great Britain

PetCare & Coffee

Infant Nutrition


Challenges:

The Macro situation

Competitive environment in

some categories

Nestlé Professional in China

Asia, Oceania & Africa

11

Positives:

Growth slower,

but dynamic

China, South Asia,

Indonesia, Malaysia

& Singapore

Powdered Beverages & Dairy

Key developed market categories

Nestlé & Wyeth Infant Nutrition

Water


Trading Operating Profit Margin

HY 2012 OtherRevenue

COGS Distribution Marketing Admin. R&D Net OtherTradingExpense

HY 2013

+100

+110

0

TOP

14.9%*

+70

TOP

15.1%

+20 bps


-60 +10

-10 -30 0

* 2012 figures fully restated as per IAS 19 and IFRS 11;

Trading Operating Profit

margin improves 20 bps

to 15.1%

Marketing investment +60 bps

Constant currency consumer

facing spend +15%

12


Income Statement As % of sales

June 30

2012*

June 30

2013

Difference in

basis points/%

(rounded)

Trading operating profit 14.9 15.1 +20

Net other operating income/expense (0.1) (0.2) -10

Operating profit 14.8 14.9 +10

Net financial income/expense (0.8) (0.7) +10

Profit before taxes, associates and JVs 14.0 14.2 +20

Taxes (3.6) (3.9) -30

Share of results of associates and JVs 1.6 1.5 -10

Profit for the period 12.0 11.8 -20

Attributable to non-controlling interests 0.5 0.5 0

Attributable to shareholders of the parent 11.5 11.3 -20

Basic EPS (CHF) as reported 1.55 1.60 +3.4%

Underlying EPS (CHF) constant currencies +7.2%

* 2012 figures fully restated as per IAS 19 and IFRS 11

13


Operating Cash Flow

14

OperatingCash Flow

30 June 2012

Operatingimprovement

Variationof working

capital

Others OperatingCash Flow

30 June 2013

5.2

5.0

+ 0.6 - 0.5

- 0.3

- 0.2

in CHF bn (rounded)


1. Group – High Quality Performance

RIG acceleration

Margin improvement & increased

marketing spend

Strong cash flow performance &

positive trend in working capital

15


2. Broad Based Operational Performance

Americas: Progress on top & bottom line;

investment for growth

Europe: continued growth & investment for growth

AOA: Driving RIG & improving margin

Infant Nutrition: good growth globally;

Wyeth on track

Water: progress in tough season

Nespresso: double digit

16


3. 2013 Outlook

We expect the growth momentum seen in the first half to continue

in the second half, allowing us for the full year to deliver, in line

with our commitments, around 5% organic growth with an

improvement in margins and underlying earnings per share in

constant currencies

17

August 8th, 2013 Half Year Results 18

2013 Half Year Results

Discussion


Appendix

19


Net Debt

18.1 22.2

0.2 6.6

3.1

Net debtJanuary 1st*

Treasury shares(net)

Acquisitionnet

disposals(incl. Minority)

Dividends Exchange rates &other

Free Cash Flow Net DebtJune 30th

+ 0.1

-0.5

CHF bn

* Net Debt excluding JVs since 1 January 2013 following adoption of IFRS 11 new accounting rules

- -

- -

+

20

∆4.1bn


Translational Impact of Swiss Franc

Weighted Average Exchange Rates

CHF per 1H 2012 1H 2013 (%)

US Dollar (1) 0.93 0.94 +0.9

Euro (1) 1.20 1.23 +2.1

£ Sterling (1) 1.46 1.44 -1.4

Real (100) 49.90 46.22 -7.4

Mex. Peso (100) 7.01 7.46 +6.4

Yen (100) 1.16 0.98 -15.8

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FX Impact on All Businesses

(%) 1Q 2013 1H 2013

Zone Americas -2.6 -2.4

Zone Europe +1.2 +1.3

Zone AOA -1.0 -1.4

Nestlé Waters +0.9 +0.8

Nestlé Nutrition -1.9 -1.8

Other +0.2 +0.3

Total -0.9 -0.9

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