PRESS RELEASE milestone year for Nestlé: Sales reach CHF 107.6bn, EBIT margin 14%

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1 PRESS RELEASE 2007 milestone year for Nestlé: Sales reach CHF 107.6bn, EBIT margin 14% Sales of CHF 107.6bn, up CHF 9.1bn (+9.2%), Food and Beverages sales reach CHF 100.3bn Above-target organic growth of 7.4%, 4.4% real internal growth EBIT of CHF 15bn (+12.9%), margin of 14%, +50 basis points Food and Beverages: 7.1% organic growth, EBIT margin +40 basis points Net profit of CHF 10.6bn (+15.8%), earnings per share CHF (+16.4%) Discipline in capital management: return on invested capital (ROIC) up +100 basis points Proposed dividend CHF per share, up 17.3% from CHF for 2006 Peter Brabeck-Letmathe, Chairman and CEO of Nestlé: "This milestone performance was achieved in a difficult external environment and, for the twelfth year in a row, has demonstrated the power of the Nestlé model: organic growth of at least 5-6% coupled with a sustainable EBIT margin improvement, irrespective of prevailing economic conditions. Nestlé is now uniquely positioned as the world's foremost nutrition, health and wellness company with leading brands, global geographic spread and an exceptional management team. Indeed, Nestlé has ventured far beyond the traditional food industry: our success is now driven more by our capacity to innovate and use our R&D pipeline to launch new, added-value products and services, than by raw material prices or the economic climate. Combined with our strong emphasis on excellence in execution and discipline in capital management, we have, over time, created powerful momentum which will deliver profitable growth for years to come." Jan.-Dec Change vs. Jan.-Dec Sales CHF m + 9.2% + CHF 9 094m Jan.-Dec Margins vs. Jan.-Dec EBIT CHF m % + CHF 1722m 14.0% +50bps Net profit CHF m % + CHF 1 452m 9.9% +60bps Total EPS CHF % Real internal growth Organic growth All calculations based on non-rounded figures 4.4% 7.4%

2 Group sales, profitability and financial position Vevey, 21 February 2008 In 2007, consolidated sales of the Nestlé Group amounted to CHF billion, an increase of 9.2% over the same period last year. This was driven by organic growth of 7.4%, consisting of real internal growth of 4.4% and price increases of 3.0%. Acquisitions net of divestitures, primarily driven by the acquisition of Novartis Medical Nutrition and Gerber, contributed another 1.4% of growth while exchange rate fluctuations added another 0.4%. The Group's Food and Beverages business, with sales of CHF billion, was the main contributor to growth, achieving organic growth of 7.1%, consisting of real internal growth of 4.0% and price increases of 3.1%. The Group's EBIT grew by 12.9% to CHF 15 billion, resulting in an EBIT margin of 14%, a 50 basis point improvement over Food and Beverages' EBIT grew by 12.7% to CHF 12.6 billion, resulting in a margin improvement of 40 basis points. These performances were achieved in spite of a negative 10 basis point currency impact. Timely pricing actions, scale efficiencies, cost reduction initiatives, as well as the ongoing strategic transformation process allowed the Food and Beverages business to more than offset higher raw material and energy costs in Net profit grew by 15.8% to CHF 10.6 billion, resulting in a net margin of 9.9%, up 60 basis points. Earnings per share once again grew at a double-digit rate, by 16.4% to CHF The Group s operating cash flow increased by 15.1%, from CHF 11.7 billion to CHF 13.4 billion, while free cash flow increased from CHF 7 billion to CHF 8.2 billion. Tight capital management was demonstrated by continued efficiencies in working capital and the launch of a third share buyback programme. The return on invested capital (ROIC), excluding goodwill, improved by 100 basis points, to 22.2%; including goodwill, it was up 50 basis points, to 12.2%. The Group s net debt rose to CHF 21.2 billion, mainly due to the acquisition of Novartis Medical Nutrition and Gerber, as well as the buyback of shares amounting to CHF 4.4 billion in Group Food and Beverages sales In 2007, the organic growth of Nestlé's total Food and Beverages business (including globally-managed businesses such as Nestlé Waters, Nestlé Nutrition, Nespresso, the Food and Beverages joint ventures, as well as the Zones) amounted to 4.2% in Europe, 8.6% in the Americas and 9.6% in Asia, Oceania and Africa.

3 Sales and EBIT margins by management responsibilities and geographic areas Food & Beverages Sales in CHF millions Organic Growth (%) EBIT margins Change vs Jan.-Dec. 2006(a) Zone Europe % +30 bps Zone Americas % +50 bps Zone Asia, Oceania, Africa % -30 bps Nestlé Waters % -50 bps Nestlé Nutrition % +30 bps Other Food & Beverages (b) % +220 bps Total Food & Beverages % +40 bps Pharma % +140 bps Group Total % +50 bps (a) 2006 comparatives have been restated to reflect internal changes in management responsibility as of 1 January 2007 (b) mainly joint ventures managed on a worldwide basis and Nespresso All calculations based on non-rounded figures Zone Europe: sales of CHF 28.5 billion, 2% real internal growth and 3% organic growth. The Zone experienced double-digit growth in eastern Europe, mainly in Russia and Poland, and positive growth trends in key western European markets, such as Germany, France and Great Britain. The Zone's 30 basis points improvement in EBIT margin was mainly driven by higher operational performance and was achieved in spite of investments in premium segment initiatives. Mövenpick of Switzerland did particularly well as a pan-european super-premium ice cream brand. Nescafé Dolce Gusto had strong first year sales, driven both by continued success in the initial launch markets and successful introductions in a further six markets. Chocolate did well due to a renewed focus on strategic brands, particularly in Great Britain, as did soluble coffee and the pet care business. Zone Americas: sales of CHF 32.9 billion, 3.3% real internal growth and 8.1% organic growth. Real internal growth remained strong across the Zone, with good contributions from fast-growing Popularly Positioned Products and direct sales distribution initiatives in Latin America. EBIT margins increased by 50 basis points led by timely pricing, operational improvements and successful innovative product launches such as Nescafé Protect, Panini Lean Cuisine or Cat Chow Natural. Key product categories such as ice cream and beverages improved their EBIT margin supported by a stronger focus on more value-added products. Zone Asia, Oceania and Africa: sales of CHF 16.6 billion, 4.4% real internal growth and 8.8% organic growth. The Zone's EBIT margin slipped 30 basis points to 16.3% as a result of two one-off factors in 2007: Nestlé Japan was the Group's last market to move to a demand-driven, just-in-time business model and, in Australia, Nestlé was affected by the specific situation of a key customer. The Zone's emerging markets continued to deliver double-digit growth with all categories contributing. While these markets were particularly exposed to exceptionally high milk prices, timely pricing, together with efficiency initiatives and successful new launches such as Nido growing up milks enriched with probiotics in several Asian markets were sufficient to protect EBIT margins in emerging markets. Nestlé Waters: sales of CHF 10.4 billion, 5% real internal growth and 6.6% organic growth. Following a very promising first half, the second half of the year was somewhat softer, mostly due to unfavourable weather conditions in Europe. This slow growth, together with continued weakness in the European

4 home and office delivery (HOD) business as well as higher packaging and distribution costs, caused the EBIT margin to fall by 50 basis points. In North America and emerging markets, double-digit sales growth was achieved. With over 30% organic growth, Nestlé Pure Life maintained its momentum and the brand is now a key growth driver in over 20 countries. Overall market shares continued to improve in most countries. Nestlé Nutrition: sales of CHF 8.4 billion, real internal growth of 6.5% and 9.7% organic growth. As a result of the acquisition and successful integration of Jenny Craig in 2006 as well as Novartis Medical Nutrition and Gerber in 2007, Nestlé Nutrition reinforced its undisputed world leadership in specialised nutrition, with annualised sales of around CHF 11 billion. In parallel with the integration of these acquisitions, thanks to a highly productive R&D pipeline, Nestlé Nutrition continued to experience strong sales and profit growth in its established businesses, mainly driven by new launches of premium NAN starter formulas and infant cereals. Even though recent acquisitions had an anticipated initial dilutive impact, Nestlé Nutrition's EBIT margin increased by 30 basis points. Nestlé Professional: sales of CHF 7.2 billion, 2.5% real internal growth and 5.5% organic growth. The transformation of Nestlé's FoodServices Strategic Business Division into Nestlé Professional, a globallymanaged business unit dedicated to the out-of-home food and beverage market, was the main priority in 2007, including the build-up of a new management team. The opening of Nestlé's first R&D facility entirely dedicated to the out-of-home beverage business in Orbe, Switzerland last November constituted a milestone in this process. Nestlé Professional will have worldwide profit and loss responsibility as of 1 January Sales and EBIT margins by product group Sales in CHF millions Organic Growth (%) EBIT margins Jan.-Dec Nestlé Nutrition % +30 bps Change vs Jan.-Dec Powdered and liquid beverages % 0 bps Prepared dishes and cooking aids % -20 bps Milk products and ice cream % +90 bps Nestlé Waters % -50 bps Confectionery % +10 bps PetCare % +40 bps Total Food & Beverages % +40 bps Pharmaceutical products % +140 bps Group Total % +50 bps All calculations based on non-rounded figures Powdered and liquid beverages: sales of CHF 17.8 billion, 7.6% real internal growth and 10.3% organic growth. This excellent performance was driven by the core brands of the product group. Nescafé experienced strong growth due to the continued success of the coffee mixes, freeze dried soluble coffee and the successful launch of Nescafé Dolce Gusto. Nespresso had another outstanding year with over 40% organic growth. Double-digit growth was also recorded by two other billionaire brands Milo, helped by its Actigen-E Branded Active Benefit, and Nestea, which enjoyed strong performances in Asia, Africa and central and eastern Europe. EBIT margins remained unchanged at 22.4% in spite of the substantial investment in the launch of Nescafé Dolce Gusto. 6

5 Prepared dishes and cooking aids: sales of CHF 18.5 billion, 3.2% real internal growth and 4.0% organic growth, including an acceleration over the second half of the year. Double-digit performance was realized by culinary products in emerging markets, especially under the Maggi brand, as well as by Lean Cuisine and Buitoni in North America, where the business continued to benefit from strong innovation focused on health and wellness. Maggi achieved market share improvements in western Europe. Despite this acceleration, EBIT margins declined by 20 basis points in 2007, reflecting investments in distribution networks in developing countries as well as the tough competitive environment in some lower value-added activities, such as dried pasta in Europe. Milk products and ice cream: sales of CHF 20.7 billion, 1.7% real internal growth and 7.8% organic growth. Nestlé's strong brand portfolio in shelf-stable milk products allowed the Group to take the necessary actions to compensate for an exceptional milk cost increase while at the same time achieving volume growth. The growing-up milk segment was led by Nido and innovations in Branded Active Benefits. Coffeemate experienced impressive volume growth, especially in the US and Asia. Ice cream sales performed well in Latin America, Asia and eastern Europe. Volumes in western Europe and the US were weaker as a result of a greater focus on profitability. Chilled dairy substantially improved its profit performance. Overall the category's EBIT margin improved by 90 basis points, a notable achievement in view of prevailing high input costs. Confectionery: sales of CHF 12.2 billion, 2.3% real internal growth and 5.3% organic growth. All three categories chocolate, sugar and biscuits grew, led by emerging markets in Latin America and Asia. Kit Kat had a strong year, particularly in Oceania, South Asia and most markets in Europe. Double-digit growth was seen in the tablet segment, driven by premium dark chocolate products such as Perugina Nero in Italy. Increased focus on core strategic and strong local brands resulted in an EBIT margin improvement of 10 basis points overall. PetCare: sales of CHF 12.1 billion, 3.8% real internal growth and 7.0% organic growth. This was driven by strategic brands, new product launches and continued product mix improvements across the world. Brands in the super-premium and high premium segments performed particularly well. These included Fancy Feast, Pro Plan, One, Gourmet Gold and Beneful. Core premium brands such as Dog Chow and Cat Chow also generated appreciable growth. The excellent result was achieved despite increased pricing. The business' EBIT margin improved by 40 basis points, to 15.5%. This increased profitability was the result of continued growth of value-added strategic brands together with price increases which offset significantly higher input costs. Pharmaceutical products: sales of CHF 7.3 billion, 10.2% real internal growth and 11.0% organic growth was the result of double-digit growth by both Alcon and the joint ventures. The EBIT margin increased 140 basis points to 33.3%, mainly due to operational efficiencies and a positive product mix at Alcon. 6 Board proposals to the Annual General Meeting The strong performance in 2007 and the positive outlook for 2008 will enable the Board to propose to shareholders a dividend increase of 17.3% from CHF per share to CHF per share. The ongoing share buy-back programme has so far resulted in the purchase of 10,196,000 shares between 24 August 2007 and 5 February The Board will propose the cancellation of 10,072,500 shares amounting to CHF 5.3 billion. Furthermore, in order to increase the liquidity and tradability of Nestlé shares, the Board will propose a 1-for-10 share split. Should this proposal be accepted, the Board would then divide ADRs by 2.5 to achieve value parity with ordinary shares.

6 The mandate of Mr. Peter Böckli, who first joined the Board in 1993, expires in April The Board wishes to express its gratitude to Mr. Böckli for his highly-appreciated services over the years, not only as one of its members, but also as member of the Audit Committee and chairman of the Compensation and Nomination Committee. The Board will propose the re-election of Messrs. Andreas Koopman and Rolf Hänggi, 1st and 2 nd Vice Chairman of the Board, respectively. Furthermore, the Board will propose the election of Mr. Beat W. Hess, Group Legal Director and member of the Group Executive Committee of Royal Dutch Shell. Mr. Hess has over 20 years' experience in complex business and management issues in large global companies, particularly in the area of corporate governance. The Board will also propose the election of Mr. Paul Bulcke, until recently Executive Vice President in charge of Zone Americas, as one of its members with the intention of immediately confirming his appointment as Administrateur délégué (CEO) once he is elected. As previously announced, Mr. Peter Brabeck-Letmathe will stand down as CEO, but will remain Chairman of the Board. Finally, the Board will submit a proposal for new Articles of Association to shareholders for approval at the forthcoming Annual General Meeting. Individual elements of this proposal include abolishing the old attendance quorums and supermajority clauses; lowering the threshold for shareholders to put items on the Annual General Meeting agenda from 0.25% to 0.15% of total share capital; reducing Board members' term of office from five years to three; and increasing the maximum voting rights' percentage of any one shareholder from 3% to 5% of total share capital. The Board is convinced that its proposal is well balanced, taking into account the views of different shareholder groups, and is in the company's best interest. Outlook Nestlé is confident that the momentum built up over time and once again demonstrated by the 2007 results will be maintained over the coming years. The company's strategic re-orientation and the related structural adjustments have largely been completed and the Group's leadership position in nutrition, health and wellness is now deeply rooted. Nestlé's rich R&D pipeline promises many new, innovative product launches over the coming years. Operational efficiency and capital discipline will remain high on the agenda. Within Nestlé's excellent prospects overall, four key strategic areas have been identifed as having above-average growth and profit potential in 2008 and beyond. Nestlé Nutrition has annualised sales of around CHF 11 billion. The integration of Novartis Medical Nutrition and Gerber was achieved in record time and the two businesses' performance is already exceeding expectations. For years to come, Nestlé's strong R&D pipeline will continue to drive growth of all Nestlé Nutrition businesses, and will also fuel the performance of mainstream products enriched with Branded Active Benefits (BABs), which grew by over 16% to reach CHF 4.4 billion in sales in Popularly Positioned Products (PPPs). Products aimed at lower income consumers in the developing world will continue to grow strongly in 2008 and beyond. Nestlé PPPs, which mostly consist of dairy products, Nescafé and Maggi culinary products, grew by over 25% to reach around CHF 6 billion in sales in The overall market for such products in Asia, Africa and Latin America is estimated at over CHF 80 billion. Out-of-home. In the US and other mature markets, consumers spend more on out-of-home food and beverages than on home consumption, a trend which is set to continue. With sales of over CHF 7.2 billion and 10,000 employees in 97 countries, Nestlé is already uncontested world leader in this highly

7 fragmented market. With the on-going transformation of Nestlé's FoodServices Strategic Business Division into Nestlé Professional, the company is well poised to take advantage of a business opportunity over coming years estimated at around CHF 400 billion in total. Luxury and premium products. With growth of well over 40% in 2007, Nespresso is set to reach the CHF 2 billion sales mark in Mövenpick of Switzerland, which was relaunched as a pan-european super-premium ice cream brand in 2007, should continue growing fast in 2008, as should Häagen-Dazs in North America and Antica Gelateria del Corso in Europe. In confectionery, the strong growth of darker, premium chocolate is another visible sign of "premiumisation" and explains Nestlé's partnership with Belgian luxury chocolatier Pierre Marcolini, as well as the acquisition of Ruzskaya Confectionery Factory (RKF), producer of Russia's leading premium chocolate brands Сomilfo and Ruzanna. The "premiumisation" of mainstream Nestlé products, as witnessed for instance by the recent launch of Nido Excella Gold in Asia and Latin America, will pick up further speed over years to come. In summary, the Group is confident of achieving the Nestlé model in 2008: organic growth of between 5 and 6%; a further EBIT margin improvement in constant currencies; a further capital efficiency improvement. The Nestlé model, combined with the ongoing ambitious share buyback programme, will deliver strong earnings per share growth, resulting in industry-outperforming, long-term shareholder value creation. Date of the next General Meeting The General Meeting of Nestlé S.A. will take place on 10 April 2008 at 14:30 at the Palais de Beaulieu in Lausanne. The management report will be available from 14 March 2008, whereas the fully-audited financial statements are now posted on the Nestlé Corporate Website ( The dividend will be payable from 16 April Contacts: Media: François-Xavier Perroud Tel.: Investors: Roddy Child-Villiers Tel.: