2008 Half-Year results Half-Year results 7 th August 2008 Name of chairman

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Abigail Lawrence
5 years ago
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1 1 00 Half-Year results

2 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.

3 3 00 First Half Highlights Successful delivery of the Model Organic growth of.9% EBIT margin +0bp / +30 after currency impact Food & Beverages the driver of growth & profitability Organic growth of.9% EBIT margin +50bp / +30 after currency impact Billionaire brands drive growth Nutrition, Health & Wellness, PPP, premium strategies Corporate & business initiatives moving rapidly Drive for efficiency with speed & discipline Partial Alcon sale, smaller disposals, Buy-back Improved Outlook Organic growth at least at 007 level Improved EBIT margin: reported and constant currency

4 A strong first half Delivering the Model Improvements HY 0 v HY 07 HY 0 Total Group Sales total +3. % + CHF.0 bn CHF 53.1 bn Organic growth +.9 % EBIT EBIT margin Constant currency +.1 % + CHF 0. bn + 30 bp + 0 bp CHF 7.3 bn 13. % Net profit Net profit margin EPS +.1 % + 0 bp +.% + CHF 0.3 bn CHF 5. bn 9. % CHF 1.39 Food & Beverages Sales total Organic growth +.0 % +.9 % + CHF 1.9 bn CHF 9.3 bn EBIT EBIT margin Constant currency +.7 % + 30 bp + 50 bp + CHF 0. bn CHF.1 bn

5 5 The Model driving organic growth & EBIT margin improvement 11.1% 13.5% 1.9% 1-year averages 1.5% 1.% 1.3% OG 5.9% 11.% 11.% 1.0% 9.7% RIG 3.%.%.3%.3% PRICE.3% EBIT MARGIN +35 bp.9% 7.%.%.% 5.1%.7% 5.% 3.% 3.% 3.3% 3.% 5.%.%.%.9% 3.% 5.1%.%.5%.9%.%.7%.% RIG % Organic Growth EBIT margin Data corresponds to published figures not restated for accounting changes

6 Above target organic growth of.9% by Group and Food & Beverages Total Group Food and Beverages + 3.% to CHF 53.1 bn +.0% to CHF 9.3 bn 3.5% 5.% RIG Pricing.9% Organic Growth 3.% 5.7% RIG Pricing.9% Organic Growth 3.% Acqs - divests 3.3% Acqs - divests -.3% Exchange Rates -.% Exchange Rates First Half Sales reach CHF 53.1 bn

7 00 Half-Year Results Key factors of margin improvement GROUP EBIT MARGIN + 30 bp (+ 0 constant currency) F&B EBIT MARGIN + 30 bp (+ 50 constant currency) + Efficiencies + 5.% Pricing + Mix - Input costs + Efficiencies+ Mix + Leverage/Fixed costs + Pricing 13. % 13.5 % % Constant currency +30 EBIT margin COGS Distribution Marketing Admin. R&D EBIT margin H1 007 H1 00 7

8 Total Food & Beverages* All geographies contribute well % Growth % Organic Growth 1 % RIG x.x Sales CHF bn Europe 19.0 Americas 0.5 Asia, Oceania, Africa 9. * each region includes sales of Food & Beverages, Waters and Nutrition businesses, Nespresso and F&B JVs

9 Primary Reporting: F&B % Growth 1 1 % Organic Growth % RIG CHF bn Sales EBIT EBIT % Europe 3.0 Americas.5 AOA Waters -1.1 Nutrition Other F&B Total F&B i -3.1 j * *After unallocated items

10 Primary Reporting: Europe % Growth 1 1 % Organic Growth % RIG Organic growth (OG) above FY'07 EBIT% + 30bp 5..3 Good performances in Soluble, Chocolate, PetCare, Culinary GB strong, France, Germany OG accelerated Eastern Europe OG double-digit Growth, cost management drive EBIT to 11.7% 0 - Europe Americas AOA Waters Nutrition Other F&B Total F&B l

11 11 Primary Reporting: Americas % Growth 1 1 % Organic Growth % RIG EBIT% + 0bp 11.0 Organic growth above FY'07 Strong performances PetCare, Soluble coffee, Dairy US Ice Cream, Frozen Food slow 3.0 Latin America RIG resilient, with strong pricing Growth, efficiencies drive EBIT margin to 1.9% 0 - Europe Americas AOA Waters Nutrition Other F&B Total F&B l

12 1 Primary Reporting: AOA % Growth 1 1 % Organic Growth % RIG 13.1 Organic growth above FY'07 Emerging markets double digit Japan to accelerate in H EBIT % unchanged.5 PPP, NHW: defensive EBIT margin at 1.3%, pressured by costs/fx but supported through cost saves & growth 0 - Europe Americas AOA Waters Nutrition Other F&B Total F&B l

13 13 Primary Reporting: Waters % Growth % Organic Growth % RIG EBIT% - bp Europe Americas Economy, environmental debate North America flat, Europe declines Billionaire brands achieve positive OG EBIT margin 7.%, impacted by growth, raw materials, currencies Good job on cost saves Some improvement in H AOA Waters Nutrition Other F&B Total F&B

14 1 Primary Reporting: Nutrition % Growth 1 1 Organic growth above FY'07 & above target Infant Nutrition v. strong 11.1 % Organic Growth % RIG Acquisitions ahead of plan 1.5% EBIT margin: strong performance from base business FY '0 Organic growth around target 5.5 EBIT% - 0bp 0 - Europe Americas AOA Waters Nutrition Other F&B Total F&B l

15 15 Primary Reporting: Other F&B % Growth 1 1 % Organic Growth % RIG Mainly Nespresso, CPW, BPW Good performances by all constituents EBIT% + 150bp 0 - Europe Americas AOA Waters Nutrition Other F&B Total F&B l

16 1 Primary reporting summary Performance & prospects very much driven by own initiatives execution of strategy Organic growth in Europe at twice 007 year-end level Organic growth in AOA & Americas significantly above 007 year-end level Unique product portfolio, unmatched brand strength, R&D and country roots is uniquely positioned, resilient and opportunity-rich

17 Secondary Reporting % Growth % Organic growth % RIG CHF bn Sales EBIT EBIT % Powdered & Liquid Beverages Waters Dairy products inc. Ice Cream Nutrition Prepared Confectionery PetCare Pharma Dishes & Cooking Aids

18 1 Secondary Reporting Powdered & Liquid Beverages % Growth EBIT% + 0bp Double-digit OG & good RIG in all categories % Organic growth % RIG Nescafé, Milo, Nesquik, Nestea, Nespresso all double digit OG Key catalysts: Innovation; Nutrition, Health & Wellness 0 - Powdered & Liquid Beverages Waters Nespresso H1 sales reach CHF 1 billion EBIT margin.9% despite cost pressure Dairy products inc. Ice Cream Nutrition Prepared Confectionery PetCare Pharma Dishes & Cooking Aids

19 19 Secondary Reporting Dairy products, including Ice Cream % Growth 1 1 EBIT% + 70bp % Organic growth % RIG Milk: Demand strong: PPP, NHW helping Milk: our pricing has peaked Ice Cream market slow, shares OK Premium/NHW Ice Cream strong EBIT margin 11.%: both Ice Cream & Dairy improved 0 - Powdered & Liquid Beverages Waters Dairy products inc. Ice Cream Nutrition Prepared Confectionery PetCare Pharma Dishes & Cooking Aids

20 0 Secondary Reporting Prepared Dishes and Cooking Aids % Growth 1 1 Culinary, Maggi, performing well Growth recovery in Hot Pockets US Frozen slow due to pricing European frozen pizza strong 11.% EBIT margin impacted by growth & input costs To improve in H EBIT% - 70bp % Organic growth % RIG 0 - Powdered & Liquid Beverages Waters Dairy products inc. Ice Cream Nutrition Prepared Confectionery PetCare Pharma Dishes & Cooking Aids

21 1 Secondary Reporting: Confectionery % Growth 1 1 All categories perform well Successful Kit Kat Europe relaunch: 15.% OG globally Nutrition, Health & Wellness driving growth (calcium, real fruit, wholegrain, etc) EBIT margin improvement weighted to first half 7.7 % Organic growth % RIG EBIT% + bp 0 - H: Raw material & season impacts Powdered & Liquid Beverages Waters Dairy products inc. Ice Cream Nutrition 1.7 Prepared Confectionery PetCare Pharma Dishes & Cooking Aids

22 Secondary Reporting: PetCare % Growth 1 1 Broad-based OG performance Strong performance in AOA Beneful, Bakers double-digit RIG/OG Many brands 7-% RIG 1.5% EBIT margin - impact of cost pressures/fx EBIT margin to improve in H % Organic growth % RIG.9 5. EBIT% - 0bp 0 - Powdered & Liquid Beverages Waters Dairy products inc. Ice Cream Nutrition Prepared Confectionery PetCare Pharma Dishes & Cooking Aids

23 3 Secondary Reporting Pharmaceutical Products % Growth 1 1 Strong growth and EBIT margin performance from key constituents Alcon disposal gains in H "Net other income" Minorities to increase % Organic growth % RIG EBIT% + 90bp Powdered & Liquid Beverages Waters Dairy products inc. Ice Cream Nutrition Prepared Confectionery PetCare Pharma Dishes & Cooking Aids

24 Secondary Reporting % Growth % Organic growth % RIG HF bn ales BIT BIT % 0 - Powdered & Liquid Beverages Waters Dairy products inc. Ice Cream Nutrition Prepared Confectionery PetCare Pharma Dishes & Cooking Aids

25 5 F&B "Billionaire Brands" Over half grow double digit

26 P&L: EBIT to Net profit As % of sales H1 007 H1 00 Diff. basis points (rounded) EBIT 13.5% 13.% + 30 Net other income/expenses (0.3%) (0.%) - Financial income 0.% 0.% - 0 Financial expense (1.3%) (1.%) + Profit before taxes 1.7% 1.% - 30 Taxes (3.5%) (3.0%) + 50 Share of results of Associates 1.1% 1.1% 0 Profit for the period.3%.5% + 0 Attrib. to minority interests 0.7% 0.7% 0 Attrib. to the Group (Net profit) 9.% 9.% + 0 Net profit (CHF million),91 5,1 +.1%

27 7 Financial position H1 Operating cash flow of CHF 3.5 billion Working capital impacted by raw material inflation, increased stock levels, business planning Net debt of CHF 5. bn to decline in H (Alcon stake sale proceeds) Capital expenditure 3.1% of sales: accelerating in H Buy-back accelerating: run-rate + CHF bn to CHF 13 bn by year-end

28 Outlook & improved guidance First half 00 organic growth above 007 good momentum in our business Also a strong EBIT margin performance The Model to be achieved: Organic growth at least at 007 level Increased EBIT margin (reported & constant currency) Making the reference for Nutrition, Health & Wellness and for Financial Performance

29 9 Appendix slides

30 30 Weighted average exchange rates Jan-Dec Jan-Jun Jan-Jun Variation CHF per (%) U.S. dollar (1) Euro (1) sterling (1) Real (0) Mex. Peso (0) Yen (0)

31 31 raw material basket remains volatile Nestle Weighted Average Main Agricultural Commodities Index in CHF (Jan 199=0) to end June 00 Main Agricultural Commodities Index Including Milk Powders 150 Price Index Jan-03 Jul-03 Jan-0 Jul-0 Jan-05 Jul-05 Jan-0 Jul-0 Jan-07 Jul-07 Jan-0 Jul-0

32 3 00 Half-Year results

2010 Full Year Results Conference Call. James Singh Chief Financial Officer

2010 Full Year Results Conference Call James Singh Chief Financial Officer Disclaimer This presentation contains forward looking statements which reflect Management s current views and estimates. The forward