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12 Excerpts from Analysts' Reports 2011 Consistent strong sales growth.. Momentum to continue Capex plans firming up Cut in dividend payout ratio to 56% Raw material cost pressure continue No signs of competitive pressure Performance in line with expectations Strong long term growth potential High pricing power Best play on packaged foods Margins a major concern Band of margin strategy Going ahead, lower pressure from input cost inflation Gross margins improve due to price hikes Commendable cost management Fading tax sops reduce PAT growth Outperforms peers & broad market Diversified & dominant product portfolio Nestle Model delivers again Input cost pressure softens Positive budget measures to boost FMCG growth

13 Analysts' Rating on Nestle India 100 Buy Sell Hold Not rated (%) Q1 2011

14 INR 62.5 Bio Full Year highlights INR 11.4 Bio INR 8.2 Bio 18.2% INR 11.3 Bio Volumes + INR 2.2 Bio % % & Prices + 30 bps + INR 1.6 Bio INR 51.3 Bio INR 9.2 Bio INR Bio 17.9% 2009 Net Sales RIG% OG% OPBIT Net Profit Includes figures from Nestlé Internal Reporting Standards

15 % YoY growth Successive quarters of double digit growth NET SALES Q1 Q2 Q3 Q Bio = 23.4% 51.3 Bio = 18.6% 62.5 Bio = 21.9% INR Bio OPBIT % of Net Sales 7.6 Bio = 17.6% 9.2 Bio = 17.9% 11.4 Bio =18.2% INR Bio

16 Doubled sales in less than 4 years Organic Growth (OG) (%) Real Internal Growth (RIG) (%) Net Sales (INR Bio) RIG & OG are basis Nestlé Internal Reporting Standards in relation to third party sales only

17 Good domestic performance Volume (000 Tons) +17.6% Value (INR Bio) +22.9% Exports marginally Volume (000 Tons) +2.6% due diversion of capacity. Value (INR Bio) +7.6%

18 Our strong pillars Contribution to Net Sales % Share % Share 14.5 Chocolate & Confectionery Prepared Dishes & Cooking Aids Beverages 14.9 Milk Products & Nutrition

19 Value Gr rowth (%) All the pillars grow Milk Products & Nutrition Beverages x = Prepared Dishes & Cooking Aids 17.2 Chocolate & Confectionery x = Bubble shows Net Sales (INR Bio) Volume Growth (%) 2010

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24 Our Cost Structure % Net Sales 47.7 One-Off cost Effective increase 14.0% INR Bio Materials Employees Distribution ASP Power & Fuel Depreciation Figures have been regrouped / reclassified to make them comparable. Not to scale

25 Margins remain within a healthy band OPBIT (INR Bio) OPBIT % of Net Sales 25

26 OPBIT Bridge 110 bps 120 bps 30 bps Scale 20 bps Mix One-Off in 2009 Materials 17.9% and 70 bps Power & Fuel Distribution Others 60 bps ASP and Impairments 18.2% OPBIT 2009 % & bps are with reference to Net sales OPBIT 2010

27 Increased selling prices while retaining growth Price increase Real Internal Growth (RIG) Material Cost as % of Net Sales Q1 Q2 Q3 Q4 Full Year Change bps

28 Effective tax rate % tax holiday drops to 30% from 1 Apr 2011 for 5 years at PANTNAGAR FACTORY Tax Expense (INR Bio) Marginal Tax Rate (%) Effective Tax Rate (%) Excludes Fringe Benefit & Dividend Distribution Tax

29 Net profit doubled in 3 years Comes from OPBIT X Net Profit (INR Bio) % of Net Sales

30 Operating working capital within tolerance levels, adversely impacted by unabsorbed material cost Operating working capital (INR Bio) % of Net Sales Operating Working Capital = Inventories + Debtors Trade Payables (excluding Staff Costs, Contingencies, Capex & Taxes) Operating Working capital is average for 5 quarter end data points Basis Nestlé Internal Reporting Standards

31 Operating cash flow back to normal levels Employees p y Cost Payables # Operating cash flows (INR Bio) % of Net Sales # excludes one off inflows. Reported 16.7%

32 How have we used the cash generated from operations? Cash Generated (INR Bio) (%) (4.2) Cash retained Dividends Fixed Assets

33 ROIC is 5 times ACC Economic Profit (INR Bio) Economic Profitability (%) Return on Invested Capital (%) ACC % Risk Free rate % Group risk Premium% Basis Nestlé Internal Reporting Standards

34 Average Share Price (INR) Retained shareholders wealth increases & ROE % decreases Period end Shareholders fund (INR Bio) DPS (INR) EPS (INR) ROE %

35 CAPEX on high trajectory Capex (INR Bio) Commitment Capex as % of Net sales FA Rotation Dep (INR Bio) Fixed Assets exclude Intangibles Capex excludes Capital advances which are shown in commitments

36 Financing Strategy on track Dividend maintained at 2009 level ~INR 48.5/ Share=485%. Payout is 74% (including DDT) of the distributable profits. RBI approves ECB USD 450 Mio. from foreign equity holders. Other elements of strategy in progress

37 Impact of Union Budget 2011 Impact basis 2010 actual BUT without factoring mitigating g measures Negative impact on OPBIT ~ 50 bps (Excise Duty & Service Tax) Positive impact in Direct Taxes ~ 10 bps Negative impact on PAT ~ 22 bps

38 Volatility in commodity prices! March /Mar 2/Mar 3/Mar 4/Mar 5/Mar 6/Mar 7/Mar 8/Mar 9/Mar 10/Mar 11/Mar 12/Mar 13/Mar 14/Mar 15/Mar Sugar - LIFFE Robusta -LIFFE Arabica - ICE Pl Palm Oil - BMD Wheat - CBOT Indexed with base 1 March 2011

39 Thank You

40 Nestlé India's Commodity Basket Price Index

41 Impact of price ch hange (INR Mio) Green Coffee Palm Oil Key Raw Materials represents consumption in (INR Bio) Fats 0.9 (20) (500) (1000) (1500) MSK Wheat 2.1 Flour Sugar Fresh Milk Cocoa (2000) Total Adverse Price Variance INR 2.4 Bio Price indices (%) Impact of price change & Price indices reflect YoY change. Based on production and Internal Accounting Standards

42 Fresh Milk Fat prices 20.1 % over 2009 Current Q 1 Q2 Q3 Q4 Indexed with base Q

43 MSK prices 12.3 % over 2009 Current Q 1 Q2 Q3 Q Indexed with base Q1-07

44 Green Coffee prices 10.4 % over 2009 Current Q1 Q2 Q3 Q4 Indexed with base Q

45 222.4 Sugar prices 27.8 % over Current Q1 Q2 Q3 Q4 Indexed with base Q

46 Wheat Flour prices 8.5% over Current Q 1 Q2 Q3 Q4 Indexed with base Q

47 Palm Oil prices 6.4 % over Current Q 1 Q2 Q3 Q4 Indexed with base Q

48 Evolution Crude Oil Prices [NYMEX] Current 99 USD/Barrel Mean USD/Barrel Mean USD/Barrel +286% 28.6% New York Mecantile Exchange

49 Fuel Oils % % Furnace Oil Price - Rs./ltr HSD Share % in total Power & Fuel cost Furnace Oil ~ 49% HSD ~ 14%

50 COFFEE ROBUSTA [LIFFE] London International Financial Futures Exchange

51 Inter Continental Exchange COFFEE ARABICA [ICE]

52 SUGAR [LIFFE] London International Financial Futures Exchange

53 Chicago Board Of Trade WHEAT [CBOT]

54 Bursa Malaysia Derivatives PALM OIL [BMD]

55 Fourth Quarter highlights INR 16.7 Bio INR 2.9 Bio 25.7 INR 2.0 Bio % Oct-Dec 10 + INR 3.2 Bio Volumes + INR 1.3 Bio % % & Prices bps + INR 0.9 Bio INR 13.5 Bio INR 1.7 Bio 12.5% INR 1.1 Bio Oct-Dec 09 Net Sales RIG% OG% OPBIT Net Profit Includes figures from Nestlé Internal Reporting Standards