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Dairy Strategy Business Unit

November 3rd, 2008

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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.

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The role of the SBU

• Develop winning strategies– Consumer– Technology– Capital– Route to markets

• Develop and drive consumer-led Innovations & Renovations and Communication

• People - Core competent– In SBUs and Markets– Strategic– Inspired and inspiring leaders

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Dairy SBU portfolio

diverse product range catered to every consumer segment

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PPP

PREMIUM

CHILDREN HEALTH & NUTRIT° SOL°

ADULT HEALTH & WELLNESS

ALL FAMILY CEREALS/ ROASTED CER. BEV.

DAIRY CULINARY SOLUTIONS

TEA & COFFEE ENHANCEMENT

MA

INST

REA

M

CerealPorridge

Ready-To-Drink Liquid /

Flavours

Powder

Stick packs

Stick packsSUPLIGEN powderstick

Milk powdersachet

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With 2 billionaire brands: NIDO & Coffee-Mate

Both are delivering growth above market

Organic growth (%) - 2007

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NIDO is one of the NHW drivers for Nestlé

• Nestlé's third largest brand (2007 Sales: CHF 4.6 bio)

• The No 1 wellness brand for Nestlé

• The largest brand in the Dairy SBU, in over 50 markets

• Consistent growth over the years: CAGR 11.5% in last 3 years

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Nestlé's four competitive advantages

Productsand brand portfolio

Industry-leadingresearch and development

Comprehensivegeographic presence

People, culture and values

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Nestlé's four growth pillars

Nutrition Out-of-home

Premium and luxuryEmerging consumers

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NIDO Nutrition System

CONSUMER SELLING PROPOSITIONCONSUMER SELLING PROPOSITION

“Superior nutrition for each stage of your child development”

Owning the Protection territory with the launch of Lactobacillus PROTECTUSTM

“Age specific superior Nutrition at each stage of your child’s life”

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L. PROTECTUSTM: Proprietary Probiotic Cocktail

1. Proprietary probiotic cocktail with benefit of protection, gut healthand comfort

2. Proprietary technology to manufacture industrial quantities

Break-through science developed by Nestlé Research Center

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Project RAINBOW (affordable milk)

CONSUMER SELLING PROPOSITIONCONSUMER SELLING PROPOSITION

Affordable milk delivering the required nutrition while addressing key micro-nutrient deficiencies the world over

Mexico Caribbeanregion

Srilanka CWAR

“Right Nutrition, Right Price, Right Taste, Right Brand”

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Distribution in small stores..

Sari-sari Stores in Philippines

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..with specific model for deeper penetration

Specific distribution channel: microdistributors

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Premiumization: NIDO Excella Gold

CONSUMER SELLING PROPOSITIONCONSUMER SELLING PROPOSITION

“For your special child to grow, you know you need to support all his faculties”

NIDO EXCELLA Gold: advanced nutrition for Protection, Brain and Body

growth for your child all-round development

The best from you. The best from Nestlé NIDO.

“Because excellence begins young”

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Nestlé COFFEE-MATE: Enable OOH experiences and be wherever coffee is

• CHF 1.5 Bio brand with presence across all 3 Zones

• Opportunity to replicate the COFFEE-MATE experience out of home in our Lead markets whereCOFFEE-MATE already has a high share of in-home white cup

• Sizeable OOH business opportunity: 600 Million cupsof coffee consumed every day, of which 200 Million in our Top 10 COFFEE-MATE Retail markets

• Already strong OOH presence in our largest market, the US

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Out-of Home opportunity : Provide BRANDED experiences to consumers in our top 10 markets

Top 10 marketsWith presence in 70 markets

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OOH is also key trial touch-point

Office Promotionin COLOMBIA

Office samplingin CHILE andMALAYSIA

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Dairy Business:

• Major contributor to Group Vision in Nutrition, Health & Wellness, with diverse product portfolio

• Continue to Grow by Expanding to UntappedSegments and Geographies

• A Dynamic Business, continuing to perform well in a very challenging environment

In Conclusion

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Dairy Strategy Business Unit

November 3rd, 2008