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Presentation for the 2013 H1 investor call
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August 8th, 2013 Half Year Results
2013 Half YearResults
Wan Ling MartelloChief Financial Officer
Roddy Child-VilliersHead of Investor Relations
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August 8th, 2013 Half Year Results
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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August 8th, 2013 Half Year Results
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
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August 8th, 2013 Half Year Results
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
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August 8th, 2013 Half Year Results
Operating Segments Growth
ZoneEurope
ZoneAmericas
ZoneAsia, Oceania
& Africa
NestléWaters
NestléNutrition
Other
1.8 1.5
4
1.8
4.3 3.9
0.5
5 5
2.2
6.5
5
% RIG % OG
3.79.4 6.05.013.67.5SalesCHF bn rounded
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August 8th, 2013 Half Year Results
Operating Segments Margin Evolution
ZoneEurope
ZoneAmericas
ZoneAsia, Oceania
& Africa
NestléWaters
NestléNutrition
Other
14.917.8 19.1
10
20 19.2
H1 2012 TOP% H1 2013 TOP%
+20 bps +60 bps
No change
+30 bps
-10 bps
-60bps
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TOP = Trading Operating Profit
August 8th, 2013 Half Year Results
Product Groups Growth
4.6
2.4
-0.6
2.43.6
4.7 4.5
-0.2
4.7
7.1% RIG % OG
Prepared Dishes& Cooking Aids
PetCareConfectioneryMilk Products& Ice Cream
Powdered &Liquid Beverages
6.9 5.54.68.610.1SalesCHF bn rounded
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August 8th, 2013 Half Year Results
Product Groups Margin Evolution
Powdered& Liquid
Beverages
Milk Products& Ice Cream
Prepared Dishes& Cooking Aids
Confectionery PetCare
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15.913.5 12.7
19
H1 2012 TOP% H1 2013 TOP%
+30 bps -110 bps+80 bps
+100 bps
-120 bps
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TOP = Trading Operating Profit
August 8th, 2013 Half Year Results
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)
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August 8th, 2013 Half Year Results
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 inLatin America
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August 8th, 2013 Half Year Results
Europe
Challenges: The Macro situation
Southern Europe
Water & Ice Cream
Nestlé Professional
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Positives: Growth & reinvestment
Customer service levels, innovation
Premiumisation, value focused offers
Russia, Germany & Great Britain
PetCare & Coffee
Infant Nutrition
August 8th, 2013 Half Year Results
Challenges: The Macro situation
Competitive environment in some categories
Nestlé Professional in China
Asia, Oceania & Africa
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Positives: Growth slower,
but dynamic
China, South Asia, Indonesia, Malaysia& Singapore
Powdered Beverages & Dairy
Key developed market categories
Nestlé & Wyeth Infant Nutrition
Water
August 8th, 2013 Half Year Results
Trading Operating Profit Margin
+100
+110
0TOP
14.9%*
+70
TOP15.1%
+20 bps
TOP = Trading Operating Profit
-60+10
-10-300
* 2012 figures fully restated as per IAS 19 and IFRS 11;
Trading Operating Profit margin improves 20 bpsto 15.1%
Marketing investment +60 bps
Constant currency consumer facing spend +15%
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August 8th, 2013 Half Year Results
Income StatementAs % of sales June 30
2012*June 30
2013
Difference inbasis 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
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August 8th, 2013 Half Year Results15
Operating Cash Flow
OperatingCash Flow
30 June 2012
Operating improvement
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)
August 8th, 2013 Half Year Results
1. Group – High Quality Performance
RIG acceleration
Margin improvement & increased marketing spend
Strong cash flow performance & positive trend in working capital
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August 8th, 2013 Half Year Results
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
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August 8th, 2013 Half Year Results
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
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August 8th, 2013 Half Year Results19
2013 Half YearResults
Discussion
August 8th, 2013 Half Year Results
Appendix
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August 8th, 2013 Half Year Results
Net Debt
Net debtJanuary 1st*
Treasury shares (net)
Acquisitionnet
disposals(incl. Minority)
Dividends Exchange rates & other
Free Cash Flow Net DebtJune 30th
18.122.2
0.26.6
3.1
+ 0.1
-0.5
CHF bn
* Net Debt excluding JVs since 1 January 2013 following adoption of IFRS 11 new accounting rules
--
--
+
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∆4.1bn
August 8th, 2013 Half Year Results
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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August 8th, 2013 Half Year Results
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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