Nestle India Presentation Nestle Investor Meet Shanghai

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Nestlé in India: Winning in the New Reality Helio Waszyk Chairman and Managing Director Nestlé India Nestlé Investor Seminar, Shanghai September 25 th , 2012  Agenda 1. Introduci ng Ne stl é India 2. Winning in Th e New Realit y 3. Pe rf or mance 2 September 25th, 2012 Nestlé Investor Seminar, Shanghai

Transcript of Nestle India Presentation Nestle Investor Meet Shanghai

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Nestlé in India:Winning in theNew Reality

Helio WaszykChairman and Managing Director Nestlé India

Nestlé Investor Seminar, ShanghaiSeptember 25th, 2012

 Agenda

1. Introducing Nestlé India

2. Winning in The New Reality

3. Performance

2 September 25th, 2012 Nestlé Investor Seminar, Shanghai

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Nestlé India part of India Inc.

September 25th, 2012 Nestlé Investor Seminar, Shanghai

• Nestlé India is a public listed company

• Nestlé SA holds 62.76% share

• Market Capitalization INR 402 bn

(7.1 bn CHF)

Market Capitalization end 2011

Exchange rate end 2011: 1 CHF = INR 56.70 

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Balanced Portfolio with Leading Brands

September 25th, 2012 Nestlé Investor Seminar, Shanghai

*Exchange rate (Avg.2011): 1 CHF = INR 52.59

2011 Nestlé India:

Sales of INR 74.9 bn*8% of Zone AOA Sales

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The Multi-faceted Opportunity & Demographic Dividend

September 25th, 2012 Nestlé Investor Seminar, Shanghai

• 54% population below

24 years

• Net growth +1.3% p.a.

GDP Growth and the New Reality

900 million mobiles• 84% reach of TV in Urban

• 125 million internet users

• 69% population is Rural

• 53 cities with 1 million+,

8 cities with 5 million+

population

GDP per capita $1500+

Consumer Confidence Index 119 (-4) 

%

Young Population an Asset

Increasing Awareness & Digitalization

Urban-Rural Tiers

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The New RealityInflation, rising commodity costs & weakened Rupee

September 25th, 2012 Nestlé Investor Seminar, Shanghai

10%

1.6% 10.4%

12.1%

7.3%

Inflation Trends

(Price Index)

Nestlé India Commodity Basket USD : INR Average Exchange Rate

Closing Exchange Rate at 30/Jun/2012 1USD = 56.21 INR 

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The Multi-tier Income Pyramid offers scope across

Premium, Mainstream, PPP

September 25th, 2012 Nestlé Investor Seminar, Shanghai

2015Population distribution

2005

Global India

Seeking & StrivingIndia

Aspiring India

Deprived India

   C   O   N   S   U   M   E   R

   B   A   S   E

20152005Income distribution

Income pyramid will move from a triangle to a diamond… 

…generating additional genuine inclusive growth…

…equally distributed across income tiers 

Source: NCAER, Projections

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The Double BurdenMicronutrient deficiencies and health issues

September 25th, 2012 Nestlé Investor Seminar, Shanghai

Health issues

Iron• 60 million children under 3 years• 90 million urban Women

Vitamin A• 95 million children under 6 years

Iodine• 7 million children born p.a.

unprotected from mental impairment

Overweight• 60 million overweight/ obese (BMI>25)

Diabetes• From 50 million to 80 million diabetics

in India by 2030

Heart health• 30 million Coronary Heart Disease• 120 million hypertension, 60% of cardiac

patients in the world are Indians

Micronutrient deficiencies

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 Agenda

1. Introducing Nestlé India

2. Winning in The New Reality

3. Performance

9 September 25th, 2012 Nestlé Investor Seminar, Shanghai

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The Nestlé Strategic Roadmap toWin in The New Reality

September 25th, 2012 Nestlé Investor Seminar, Shanghai

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Our Overall Strategy

September 25th, 2012 Nestlé Investor Seminar, Shanghai

OUR STRATEGY

> We willacceleratepenetration ANDincreasefrequency ANDdevelop winningconcepts

PENETRATION(sell same

to new)

NEW PRODUCTS &BUSINESS

(sell new to same& sell new to new)

FREQUENCY(sell moreto same)

* does not include new opportunities

SOURCES OF SALES GROWTH

> We will focus onboth growth AND

margins

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Value Creation with a Multi-tier portfolio

September 25th, 2012 Nestlé Investor Seminar, Shanghai

Mainstream

PPP

Premium

Premiumisation

Emergingmarkets and

PopularlyPositionedProducts

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Driving Nutrition, Health and Wellness

September 25th, 2012 Nestlé Investor Seminar, Shanghai

Engagement with Consumers

NutritionHealth andWellness

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Out of Home Opportunities abound

September 25th, 2012 Nestlé Investor Seminar, Shanghai

NESCAFE CornersDriving Vending

ChannelsBuilding Food

Out-of-homeconsumption

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Winning with Distribution and Route to Market

September 25th, 2012 Nestlé Investor Seminar, Shanghai

2.5

2.8

3.2

3.7

+290K

+380K

+490K

General Trade & Organized TradeDistribution Reach - Million Outlets

Whenever,wherever,however 

Milk Products & NutritionEnhancing the Quality of life and Delighting consumers, building on thegoodness of milk

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• No. 1 in Dairy Whitener 

• No. 1 in Baby Food

• No. 1 in Infant Formula

Tea Creaming

Enhancing the Quality of life

Delighting consumers

Market Position

Health Care NutritionMaternal Nutrition

Innovation& renovation

Consumer communication

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Prepared Dishes & Cooking AidsTasty & Balanced food everyday

September 25th, 2012 Nestlé Investor Seminar, Shanghai

Noodles/ Light MealsFortification/ Goodness of grains

Retail and Brand Activation Among Top 10 Most Trusted Brands in India

• No. 1 in Instant Noodles, Sauces & Pasta• No. 2 in Soups

Market Position

Source: Economic Times, 2011

Innovation& renovation

Consumer communication

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BeveragesValue Leadership in Instant Coffee & Building the new category of Iced Tea

September 25th, 2012 Nestlé Investor Seminar, Shanghai

Market Position

• No. 1 in Instant Coffee

• Strong presence in Vending

• Leading Iced Tea Innovation

Driving NESCAFÉ

1.5 Million NESCAFÉ Facebook Fans Building a new category

Innovation& renovation

Consumer communication

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ConfectioneryDelight in every bite  – meeting consumer needs for pleasure

September 25th, 2012 Nestlé Investor Seminar, Shanghai

• No. 1 in Wafers & WhitesWinning at point of purchase

Impactful Communication

Market Position 

Innovation

Innovation& renovation

Consumer communication

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Global R&D center in India strategically placed toleverage local insight and global technology

September 25th, 2012 Nestlé Investor Seminar, Shanghai

Popularly Positioned Products Indian Cuisine Mastership

Localized Cereals/ ChocolatesNoodle Technology

Unmatchedresearch &

developmentcapability

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Developing Moga milk district

September 25th, 2012 Nestlé Investor Seminar, Shanghai

• Nestlé quality collection centers

• Milk Chillers installed at the villages

• Transparency in rates

• Regular payments to ~50,000 farmers

• Better quality & better price for both the farmer &

Nestlé

1+ million liters/day !Win Win Model !

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Creating Shared Value

September 25th, 2012 Nestlé Investor Seminar, Shanghai

Nestlé Healthy Kids Programme• In collaboration with Universities

Nestlé Healthy Kids for Delhi

Health Camp: Micronutrient awareness• In collaboration with Drishtee Foundation

Milk Farmers• Technical assistance and training to farmers• Village Women Dairy Development Programme

Chicory farmers• Training, Improve chicory quality and productivity

The NESCAFÉ Plan• Launched on 5th Jan 2012

Sanitation facilities• Sanitation projects benefitting girl students

Clean Drinking Water Projects•  Access to clean drinking water in village schools

across factories

Water Awareness Programme• Creating awareness among village school students

International Water management Institute• Study on the water footprint of Milk, rice and wheat

in the Moga region• Water Awareness Programme for milk farmers

Nutrition Water Rural Development

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 Agenda

1. Introducing Nestlé India

2. Winning in The New Reality

3. Performance

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Nestlé India doubled sales in the last 4 years

September 25th, 2012 Nestlé Investor Seminar, Shanghai

2011 Sales= INR 74.9 bn 

CAGR 2007-2011= 20.9%• Doubled sales in the last 4 years

• Operating Profit 18.5% in 2011

• ROIC 50% in 2011

• 500 million CHF Capex in 2010-12

• Healthy working capital 4.7% in 2011

Sales Growth - India

Index 

Exchange Rate (Avg 2011) 1CHF= 52.59 INR 

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Low & further improving operating working capital

September 25th, 2012 Nestlé Investor Seminar, Shanghai

Basis Nestlé Internal Reporting Standards

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Nestlé India earnings per share multiplied 5.5 times in10 years

September 25th, 2012 Nestlé Investor Seminar, Shanghai

-

1,000

2,000

3,000

4,000

5,000

INR per Share

 Year  2007 2008 2009 2010 2011

Nestlé India Share Price MovementX 3.0

X 5.5

X 1.8

CAGR 18.7%

2001 2011

Nestlé India EPS

Nestlé India Share Price CAGR 38%(BSE SENSEX CAGR 4%)

2006

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Nestlé India ranks among the top companies in India

Dun & Bradstreet Business Insight 2011

September 25th, 2012 Nestlé Investor Seminar, Shanghai

Total Income Net Profit Market Cap RONW

Rank among Top 500companies

across industries97  90  43  1 

RONW: Return on Net Worth or Return on average equity is computed as followsNET PROFIT FOR THE YEAR / AVERAGE OF OPENING AND CLOSING SHAREHOLDER FUNDS FOR THE YEAR 

•Strong profitable growth

•Taking into account the new reality

•Investing for the future

•Well poised to capture the opportunities

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Nestlé India continues to unlock opportunities andinvest for the future

September 25th, 2012 Nestlé Investor Seminar, Shanghai

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