H1 2013 results webcast presentation

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Presentation for the 2013 H1 investor call

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<ul><li>1.August 8th, 2013 Half Year Results 2013 Half Year Results Wan Ling Martello Chief Financial Officer Roddy Child-Villiers Head of Investor Relations 0 </li></ul> <p>2. August 8th, 2013 Half Year Results Disclaimer This presentation contains forward looking statements which reflect Managements 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. 1 3. 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 2 4. 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 3 5. August 8th, 2013 Half Year Results Operating Segments Growth 1.8 1.5 4.0 1.8 4.3 3.9 0.5 5.0 5.0 2.2 6.5 5.0 % RIG % OG 3.79.4 6.05.013.67.5Sales CHF bn rounded 4 6. August 8th, 2013 Half Year Results Operating Segments Margin Evolution 14.9 17.8 19.1 10.0 20.0 19.2 H1 2012 TOP% H1 2013 TOP% +20 bps +60 bps No change +30 bps -10 bps -60bps 5 TOP = Trading Operating Profit 7. August 8th, 2013 Half Year Results Product Groups Growth 4.6 2.4 -0.6 2.4 3.6 4.7 4.5 -0.2 4.7 7.1 % RIG % OG Prepared Dishes &amp; Cooking Aids PetCareConfectioneryMilk Products &amp; Ice Cream Powdered &amp; Liquid Beverages 6.9 5.54.68.610.1Sales CHF bn rounded 6 8. August 8th, 2013 Half Year Results Product Groups Margin Evolution 24.0 15.9 13.5 12.7 19.0 H1 2012 TOP% H1 2013 TOP% +30 bps -110 bps +80 bps +100 bps -120 bps 7 TOP = Trading Operating Profit 9. August 8th, 2013 Half Year Results Each region includes Zones, Nestl Waters, Nestl Nutrition, Nestl Professional, Nespresso and NHSc; OG = Organic Growth, RIG = Real Internal growth Asia, Oceani a &amp; 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) 8 10. August 8th, 2013 Half Year Results Americas Challenges: Ice Cream PetCare Speciality &amp; Dog Frozen versus Fresh Frozen nutritionals Water competitive environment In Latin America Economic environment Input costs Positives: PetCare Growth &amp; Cats, Treats &amp; Litter Stouffers &amp; DiGiorno Water market growth Infant Nutrition Coffee, Chocolate, Coffee-Mate Key categories in Latin America 9 11. August 8th, 2013 Half Year Results Europe Challenges: The Macro situation Southern Europe Water &amp; Ice Cream Nestl Professional 10 Positives: Growth &amp; reinvestment Customer service levels, innovation Premiumisation, value focused offers Russia, Germany &amp; Great Britain PetCare &amp; Coffee Infant Nutrition 12. August 8th, 2013 Half Year Results Challenges: The Macro situation Competitive environment in some categories Nestl Professional in China Asia, Oceania &amp; Africa 11 Positives: Growth slower, but dynamic China, South Asia, Indonesia, Malaysia &amp; Singapore Powdered Beverages &amp; Dairy Key developed market categories Nestl &amp; Wyeth Infant Nutrition Water 13. August 8th, 2013 Half Year Results Trading Operating Profit Margin HY 2012 Other Revenue COGS Distribution Marketing Admin. R&amp;D Net Other Trading Expense HY 2013 +100 +110 0 TOP 14.9%* +70 TOP 15.1% +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 bps to 15.1% Marketing investment +60 bps Constant currency consumer facing spend +15% 12 14. August 8th, 2013 Half Year Results Income Statement As % of sales June 30 2012* June 30 2013 Difference in basis 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 13 15. August 8th, 2013 Half Year Results Operating Cash Flow 14 Operating Cash Flow Operating improvement Variation of working Others Operating Cash Flow 5.2 5.0 + 0.6 - 0.5 - 0.3 - 0.2 in CHF bn (rounded) 16. August 8th, 2013 Half Year Results 1. Group High Quality Performance RIG acceleration Margin improvement &amp; increased marketing spend Strong cash flow performance &amp; positive trend in working capital 15 17. August 8th, 2013 Half Year Results 2. Broad Based Operational Performance Americas: Progress on top &amp; bottom line; investment for growth Europe: continued growth &amp; investment for growth AOA: Driving RIG &amp; improving margin Infant Nutrition: good growth globally; Wyeth on track Water: progress in tough season Nespresso: double digit 16 18. 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 17 19. August 8th, 2013 Half Year Results18 2013 Half Year Results Discussion 20. August 8th, 2013 Half Year Results Appendix 19 21. August 8th, 2013 Half Year Results Net Debt 18.1 22.2 0.2 6.6 3.1 Net debt January 1st* Treasury shares (net) Acquisition net disposals (incl. Minority) Dividends Exchange rates &amp; other Free Cash Flow Net Debt June 30th + 0.1 -0.5 CHF bn * Net Debt excluding JVs since 1 January 2013 following adoption of IFRS 11 new accounting rules - - - - + 20 4.1bn 22. 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 21 23. 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 Nestl Waters +0.9 +0.8 Nestl Nutrition -1.9 -1.8 Other +0.2 +0.3 Total -0.9 -0.9 22 </p>