23rd April, 2012 Pfizer Nutrition Acquisition
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Kurt Schmidt
Head of Nestlé Nutrition Wan Ling Martello
Chief Financial Officer
Paul Bulcke
Chief Executive
Roddy Child-Villiers
Head of Investor Relations
23rd April, 2012 Pfizer Nutrition Acquisition
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.
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23rd April, 2012 Pfizer Nutrition Acquisition
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Paul Bulcke
Chief Executive
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23rd April, 2012 Pfizer Nutrition Acquisition
Building on... Our 145 year commitment Our Nutrition, Health & Wellness strategy Our special commitment to the first 1000 days
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23rd April, 2012 Pfizer Nutrition Acquisition 4
Building on our 145 year commitment...
Henri Nestlé
23rd April, 2012 Pfizer Nutrition Acquisition
On our Nutrition, Health & Wellness strategy...
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23rd April, 2012 Pfizer Nutrition Acquisition
Operational
Pillars
Growth
Drivers
Competitive
Advantages
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Aligned with the Nestlé Roadmap
23rd April, 2012 Pfizer Nutrition Acquisition 7
Aligned with the Nestlé Roadmap 60/40+
Nestlé R&D
Nestlé Nutrition
Nestlé Health Science,
Nestlé Institute of
Health Sciences
Venture Funds
M&A: Strategic
Cultural
Financial
23rd April, 2012 Pfizer Nutrition Acquisition 8
Building on our special commitment to the first 1000 days ...
23rd April, 2012 Pfizer Nutrition Acquisition
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Kurt Schmidt
Global Head
Nestlé Nutrition
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23rd April, 2012 Pfizer Nutrition Acquisition 10
The first 1000 days
Critical nutritional milestones from conception through infancy
Science-based education & services for the right nutritional choices
Breastfeeding
The best form of nutrition in the first 6 months of life
The right start of a consumer journey with Nestlé Start Healthy Stay Healthy
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Pfizer Nutrition...
Strong fit with Nestlé
Strategic
Cultural
Financial
23rd April, 2012 Pfizer Nutrition Acquisition
Infant Nutrition Our roots & the core of Nutrition, Health & Wellness
Start of a new journey
Nestlé & Pfizer Nutrition nurturing a healthier generation
Building a strong future on our core passion & roots
Nutrition, Health & Wellness
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23rd April, 2012 Pfizer Nutrition Acquisition
Nestlé & Pfizer Nutrition Strong fit in attractive category
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Strengthened position & a winning combination
Infant Nutrition: High value & high growth
Nestlé Nutrition: Category pioneer & global leader
Pfizer Nutrition: Dynamic & valuable business with
exposure in growth markets
23rd April, 2012 Pfizer Nutrition Acquisition
Infant Nutrition is an attractive category
Large market: ~USD 30 bn
High growth: ~10% p.a. globally
Emerging markets: 73% of market, 13% growth p.a.
–Increasing births
–Increasing affluence
–Increasing awareness of benefits of good nutrition
–Premiumisation & broader range of product benefits
Source: Euromonitor (Milk Formula)
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23rd April, 2012 Pfizer Nutrition Acquisition
Infant Nutrition is highly dynamic
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Source: Euromonitor (Milk Formula)
Egypt
2010 Market Size ($m) 06-'10 Market Growth (%) 10-'16 Market Growth %)
China
Other Asia
North America
Europe
Latin America
Middle East &
Africa
Australia &
New Zealand
7,306
6,475
4,807
4,613
2,034
1,586
197
28.3%
9.1%
0.6%
6.3%
10.9%
17.9%
8.2%
19.0%
6.7%
1.9%
5.1%
11.7%
13.3%
4.9%
2010 Market Size ($m) 06-'10 Market Growth (%) 10-'16 Market Growth %)
China
Other Asia
North America
Europe
Latin America
Middle East &
Africa
Australia &
New Zealand
7,306
6,475
4,807
4,613
2,034
1,586
197
28.3%
9.1%
0.6%
6.3%
10.9%
17.9%
8.2%
19.0%
6.7%
1.9%
5.1%
11.7%
13.3%
4.9%
(%)
23rd April, 2012 Pfizer Nutrition Acquisition
Pfizer Nutrition Dynamic player with strong geographic growth profile
85% of sales in emerging markets
– Key markets include: China, Philippines, Thailand, Indonesia, Middle East, Mexico
Strong reputation & equity with Health Care Professionals
High quality brand portfolio with strength in premium products
Strong leadership team with proven track record
Good and consistent financial performance
5,400 employees, 5 factories and 3 R&D centres
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23rd April, 2012 Pfizer Nutrition Acquisition
Nestlé & Pfizer Nutrition Building on Nestlé’s strong base
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Nestlé Infant Nutrition today:
Global leadership with broad geographic reach
Leading global R&D network
Strong medical & scientific partnerships
Science-based innovation
Focused stand-alone organisation
23rd April, 2012 Pfizer Nutrition Acquisition
Nestlé Nutrition & Pfizer Nutrition Enhanced presence in dynamic regions
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Top 10 markets:
9 markets in the world’s top 10 of highest absolute population growth
45%+ of the next 5 years’ category growth will come from China/HK*
*Euromonitor (Milk Formula)
Nestlé IF &
GUMs
Nestlé IF & GUMs
& Pfizer Nutrition
Sales 2011 USD 5bn+ USD 7bn+
% in Emerging Markets 83% 85%
% in Asia, Oceania & Africa 45% 55%
% in Leading Positions 65% 75%
23rd April, 2012 Pfizer Nutrition Acquisition
Complementary benefits & platforms Strength from entry level to super premium
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Picky Eater Immune
Protection Gut Comfort
Optimal growth
& Development
Brain
Development
Enlarged business has a pioneering presence in key benefit platforms
Strong presence in premium & super-premium products
Allergy
Prevention
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Nestlé Nutrition & Pfizer Nutrition Strong cultural fit
Combined management teams with sustained, successful track record
Leadership teams focused on science-based innovation
Consistent focus on compliance, quality & safety; ‘non-negotiable’
Conviction that ‘breast-feeding is best’
Ethical approach to marketing
23rd April, 2012 Pfizer Nutrition Acquisition
Summary A great fit with capabilities & presence to win
Enhances strong Nestlé business
Positions Nestlé to benefit from population growth
Expands our portfolio
Leverages R&D:
Nestlé’s into Pfizer Nutrition brands; Pfizer Nutrition’s into Nestlé brands
Combines strong management teams
Benefits from ‘Nestlé in the Market’ scale, capabilities, systems, etc.
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23rd April, 2012 Pfizer Nutrition Acquisition
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Wan Ling Martello
Chief Financial Officer
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23rd April, 2012 Pfizer Nutrition Acquisition
Pfizer Nutrition
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A high quality business
Accretive to Nestlé Model
Implementing Nestlé acquisition strategy
Creating shareholder value over time
by enhancing our positions & capabilities
to win in the world’s most dynamic markets
23rd April, 2012 Pfizer Nutrition Acquisition
Pfizer Nutrition – a high quality business A track-record of dynamic growth
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Sales
2009-2012
(USD bn)
CAGR: +13%
2012E Sales: USD 2.4bn
85% of which in Emerging Markets
1.6 1.9
2.2 2.4
2009 2010 2011 2012E
2012: Nestlé estimate
23rd April, 2012 Pfizer Nutrition Acquisition
Pfizer Nutrition – a high quality business Healthy level of profitability
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A proven track-record of profitable growth
EBITDA &
EBITDA margin
2009-2012
(USD bn)
0.4 0.4 0.5
0.6
25% 23%
25% 25%
2009 2010 2011 2012E
2012: Nestlé estimate
23rd April, 2012 Pfizer Nutrition Acquisition
Key transaction parameters
Acquisition price: USD 11.85 bn
Multiple (EV/EBITDA 2012E): 19.8x
15.6x post run rate synergies
Full year cost synergies: USD 160 mn
Financing: Cash & additional debt,
strong balance sheet maintained
Closing subject to regulatory approvals
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2012: Nestlé estimate
23rd April, 2012 Pfizer Nutrition Acquisition
Pfizer Nutrition accretive to the Nestlé Model
Organic Growth: Above Group’s 5-6% OG guidance
Margin: Immediate
EPS: First full year
Capital Efficiencies: ROIC to exceed cost of capital in year 4 to 5
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23rd April, 2012 Pfizer Nutrition Acquisition
Implementing Nestlé’s acquisition strategy
Strategic
To be a category leader Leading positions globally
Focused approach on value-added
growth categories Category growing at 10%
Strong brands in leadership positions High quality brands, strong market
positions
Cultural High degree of certainty of
successful integration Operations complementary,
good cultural fit
Financial
Generate value for shareholders Growth model & healthy returns
Top & bottom line, & cash flow enhancing Accretive
Maintain strong credit ratings
& financial flexibility Strong credit ratings maintained
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... captures the very essence
of Nestlé and the promise
we commit ourselves to
everyday, everywhere
as the leading Nutrition, Health
and Wellness Company
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