2010.06.21 - 06 - chocolate presentation (m.melchior ... · confectionery chocolate faster growing...

Marcelo MelchiorHead of Confectionery SBU

June 2010Nestlé Investor Seminar

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Disclaimer

Marcelo Melchior NIS Presentation - Confectionery2 June 2010

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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Nestlé position in the face of consolidation


A growth categoryA growth category

Leverage distributionLeverage distribution

Leverage scaleLeverage scale

Address portfolio mix Address portfolio mix

Emerging marketsEmerging markets

3rd parties’acquisition rationale3rd parties’acquisition rationale

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Confectionery competitive landscape


Nestlé is growing faster than the category

Source: Euromonitor Source: Euromonitor and internal records

14.914.5

7.9

4.6 4.5

3.0

2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Kraft / Cadbury Mars Nestlé Hershey Ferrero Perfetti Lindt

Confectionery global market share

5.0%

2.8%

8.1%

6.1%

1.4%

13.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

World Established Emerging

Nestlé Confectionery Growth v CategoryCAGR 2006 -09

Confectionery Nestlé

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Confectionery Chocolate faster growing than Sugar & Gum in emerging markets


Source: Euromonitor: RSV is Retail Sales Value

Chocolate

The biggest category overall and in the emerging markets

The fastest growing category in the emerging markets

Nestlé well-positioned as the leader in chocolate in emerging markets

5.3%

2.7%

10.8%

3.9%

2.1%

5.8%5.8%5.1%

6.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%


CAGR 2006-09

Chocolate Sugar Gum

0

20'000

40'000

60'000

80'000

100'000

120'000


Confectionery Category RSV 2009 CHF

Chocolate Sugar Gum

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Key trends in chocolate


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Creating Shared Value in ChocolateA holistic approach


Nutrition, Health & Wellness

Environmental Sustainability

Sustainable Sourcing

Where does it come from?

How was it made?

What’s in my food?

Consumer preference

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Chocolate competitive landscape


15.5

14.6

12.8

7.46.7

3.6

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Kraft / Cadbury Mars Nestlé Ferrero Hershey Lindt

Chocolate global market share

5.3%

2.7%

10.8%

6.0%

1.8%

13.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%


Nestlé Chocolate Growth v CategoryCAGR 2006-09

Chocolate Nestlé

Nestlé Chocolate growing faster than the category

Chocolate is 80% of Nestlé Confectionery and has 44% of sales in Emerging Markets

Source: Euromonitor Source: Euromonitor and internal records

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Nestlé: the leader in Chocolate in emerging markets


17.9%

15.5%

8.6%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Nestlé Kraft / Cadbury Mars

Chocolate market share in Emerging Markets

Source: Euromonitor

ü Emerging markets are 44% of our business

ü High growth (13.1% CAGR versus category 10.8% in EMs) with above average profit margins

ü No 1 or 2 positions in 24 emerging markets

ü Lighter eating focus with wafer and extruded snacks plays to Nestlé strength

ü Portfolio focus on affordability with CHF 700 million sales in PPP format

ü Strong local brands

ü Strong distribution

Nestlé well positioned in emerging markets to benefit from economic growth

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Growing affluence & retail development will driveconsumption in emerging markets


ü Nestlé well positioned in emerging markets to benefit from economic growthü Chocolate consumption grows with purchasing powerü Affordable treat for emerging consumers

At or approaching 1 kg per head

At approx. 0.1 kg per head

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2001 2002 2003 2004 2005 2006 2007 2008 2009

Shark Sales growth

2001 2002 2003 2004 2005 2006 2007 2008 2009

Munch Sales growth

Light eating in India and China: MUNCH and Nestlé “Shark” Wafer


Sales value CAGR 2001-09 18.0% value increased 4x

2001 2002 2003 2004 2005 2006 2007 2008 2009

Munch Volume growth

Volume CAGR 2001-09 15.3%Volume increased 3x

2001 2002 2003 2004 2005 2006 2007 2008 2009

SHARK Volume

Volume CAGR 2001-09 21.1%Volume increased 4.5x

Sales value CAGR 2001-09 19.9% value increased 4.7x

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Strengthening position in established markets


Profitability improved by 210bps in last 3 years

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KIT KAT – innovation driving growth of CHF1.4 billion brand


BACK TO BASICS APPROACH AND LAUNCH OF SENSES

Re-focused on core of the brand

Strong consumer promotion programme

Light eating unique positioning

PPP formats launched 2009

CAGR 2007-09: Volume +4% pa

CAGR 2007-09: Value +7.4% pa

Growing market share year on year

Global No 2 Confectionery countline

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Significant improvement in profitability


Driven by strong margin improvement in established markets (2006-2009 210bps)

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

19.0%

21.0%

2006 2007 2008 2009

EBIT% Comparision

Kraft Cadburys Hershey's Lindt Nestlé Confectionery

Our performance is favourably comparable to our competitors (Chart not adjusted for differences in accounting)

11.2% 11.3% 11.5% 11.6%

13.1%13.6%

2004 2005 2006 2007 2008 2009

Nestlé Confectionery EBIT%

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Nestlé strengths in the face of consolidation








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Nestlé strengths in the face of consolidation








Nestlé is achieving above category growthNestlé is achieving above category growth

Nestlé already has global reachNestlé already has global reach

Leveraging Nestlé in the Market (scale of total Nestlé F&B) Leveraging Nestlé in the Market (scale of total Nestlé F&B)

Nestlé’s balanced portfolio, countlines, tablets, giftingNestlé’s balanced portfolio, countlines, tablets, gifting

Nestlé has most global coverage & leadership in Emerging MarketsNestlé has most global coverage & leadership in Emerging Markets

Nestlé’s Position TodayNestlé’s Position Today

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Conclusion: Nestlé Confectionery


ScaleScale

Access to emerging marketsAccess to emerging markets

Established marketsEstablished markets

GrowthGrowth

Sales of CHF 12 billionSales of CHF 12 billion

44% sales, above average EBIT44% sales, above average EBIT

Solid business with improving performanceSolid business with improving performance

Faster than category especially in emerging marketsFaster than category especially in emerging markets

Well-positioned to drive market shares and continue to improve performance

Marcelo MelchiorHead of Confectionery SBU

June 2010Nestlé Investor Seminar

2010.06.21 - 06 - chocolate presentation (m.melchior ... · confectionery chocolate faster growing...

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