Nestle SH Call Presentation

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Frozen Pizza:

A great enhancement to

Frozen Food in North America

7th January 2010Jim Singh, Nestlé CFO

Brad Alford, Chairman & CEO, Nestlé USA



07 January 20102

DisclaimerThis presentation contains certain “forward-looking” statements within themeaning of the Private Securities Litigation Reform Act of 1995. These statements

are based on managements current expectations and are naturally subject touncertainty and changes in circumstances. Actual results may vary materially fromthe expectations contained herein. The forward-looking statements containedherein include statements about future financial and operating results and benefitsof the pending transaction between Nestlé and Kraft. Factors that could causeactual results to differ materially from those described herein include; the inabilityto obtain Kraft shareholder or regulatory approvals, actions of the U.S., foreignand local governments; the inability to successfully integrate the businesses of

Nestlé and Kraft Frozen Pizza business; costs related to the acquisition: theinability to achieve cost-cutting synergies resulting from the acquisition; changingconsumer or marketplace trends; the general economic environment; and theeconomic environment of the frozen food industry. Neither Nestlé nor Kraft areunder obligation to (and expressly disclaim any such obligation to) update or alterits forward-looking statements, whether as a result of new information, future

events, or otherwise.



07 January 20103

Nestlé Frozen Food USPrepared Meals

Mkt size USDCAGR 06-08

CHF Sales

Key Brands

MS val. meals % /

Position

KeyCompetitors(MS / Position)

2.8 Billion

36% / No. 1

24% / No. 2 11% / No.3

5.4%8.0 Billion

Sandwich & Snacks

0.9 Billion

23% / No. 1

10% / No. 2 7% / No.3

5.8%3.6 Billion

§ 2008 Frozen Food retail sales in North America CHF 4.0 Bio, with CHF 3.8 Bio in US

§ Successful acquisition and integration of Chef America (2002) and Joseph's (2005)



07 January 20104

Strategic Highlights4Perfect fit with Nestlé global Frozen Food vision

§ To deliver tasty, convenient, premium, wholesome and nutritious foods

4Growing national brands§ Double digit growth over the last four years, outperforming category§ Strong brands, particularly in the growing premium segment§ Di Giorno brand approaching $1 billion in annual sales

4No.1 category positions in the US and Canada

4A great enhancement to US portfolio§ Nestlé lacks a meaningful presence in Pizza§ Frozen Pizza will enhance growth profile

4 Achieving No.1 position in Frozen Pizza worldwide§ Strong CHF1 billion in Europe§ Combined sales of over CHF3 billion

4Excellent Route-to-Market capabilities§ Complements Nestlé's existing Direct Store Delivery distribution system

4Strong R&D capabilities for continued I&R success§ Ability to combine dough competency with culinary capabilities§ Lean Cuisine & Lean Pockets demonstrate Nestlé's execution in nutrition, health & wellness in Frozen -

an opportunity in Pizza



07 January 20105

U.S. Total Pizza Industry*§ Pizza is a $37 billion industry

§ Frozen pizza represents ~10% or ~$4 billion of total pizza

§ Household penetration is 95% for the industry and 71% for frozen

Food ServiceFood Service

NonNon--CommercialCommercial$3.7Bio$3.7Bio+2.3%+2.3%

RestaurantRestaurantPreparedPrepared$29Bio$29Bio--0.9%0.9%

Total Pizza$37Bio+0.6%

HomemadeHomemade$0.3Bio$0.3Bio

+13.4%+13.4%

RefrigeratedRefrigerated$0.3Bio$0.3Bio

+19.0%+19.0%

FrozenFrozen$3.8Bio$3.8Bio

+6.5%+6.5%

Carry Out /Carry Out /DeliveryDelivery$20Bio$20Bio--1.0%1.0%

Eaten AtEaten AtRestaurantRestaurant

$9Bio$9Bio--0.8%0.8%

ConsumerConsumer

PreparedPrepared$4.5Bio$4.5Bio+7.5%+7.5%

100%

12% 10%78%

24% 54% 1%10% 1%

*All data 2008. Source: NET data, Power Pizza BCG, Nielsen (FDMx) & WalMart Panel database



07 January 20106

Kraft Frozen Pizza Business Highlights

Acquired by Kraft in 1986

Acquired by Kraft in 1992

Introduced by Kraft in 1995

Licensed by Kraft in 1999

Introduced by Kraft in 2000

Super-Premium

11%

Value10%

Mainstream20%

Premium59%

§ Headquartered in Northfield IL

§ About 3’400 employees

§ 2 plants



07 January 20107

Financial Highlights

§ CAGR of 10.7% between 2005 and 2009§ Accretive to Nestlé Model going forward

Higher than Category Sales GrowthUSD M illions

2'088

1'7881'585

1'4371'392

0

500

1'000

1'500

2'000

2'500

2005 2006 2007 2008 2009E

Growth 2006 2007 2008 2009

3.2% 10.3% 12.8% 16.8%



§ Multi-tiered product offer from Value to Super-Premium, covering various pricepoints and consumer needs

§ Undisputed leader in the premium segment, key growth driver in the latest15 years – driven by DiGiorno launch

§ Strongest frozen pizza franchise based on household penetration

§ DiGiorno is the leading pizza brand in North America(most often purchased, highest loyalty rates)

Business Overview

Source; AC Nielsen, 3-outlet, 1993-2006 from Nielsen historical database. 2007-2008 from current database.

CAGR 03-08CAGR 03-08

8.4%

3.1%

-1.9%

07 January 20108

1993 1998 2003 2008

Super Pr. & Premium

Mainstream

Value



07 January 20109

Financial Highlights4Acquisition for US$ 3.7 billion in cash

Structured as a purchase of assets: amortisation fully tax deductible

Net present value of related tax benefits approximately USD 0.5 billion

4Multiples:4 1.8x 2009E Sales of USD 2.1 Bio4 Before tax benefits: 12.5 times 2009E EBITDA4 After tax benefits: 10.6 times 2009E EBITDA

414.2% 2009 EBITDA margin

4Identified synergies of at least USD 147 million

4Enhancing Nestlé earnings in the first full year

4Reaches Nestlé cost of capital in 4 years

4Expected closing in 2010



07 January 201010

4 To be category No. 1 or strong No. 2 þ

4 Focused approach on added valuegrowth categories

4 Strong brands in leadership positions

4 RIG, cash flow and earnings enhancing

4 Maintain strong credit ratings andfinancial flexibility

4 Integration and Synergies

Nestlé Acquisition Strategy

No.1 position in US and Canada, both marketscombined representing almost 50% of worldwide

Frozen Pizza sales

Innovation & Renovation driven growth10.7% CAGR over the last 5 years

Strong brands across the multi-tiered portfolio,particular strength in premiumDiGiorno approaching 1 billion annual sales

Highly complementary to current Frozen Food

businesses in US and CanadaStrong synergies in the DSD system with Dreyer'sIce Cream Business in US

Strengthens growth profile of Frozen Foods NorthAmerica, having proven particularly resilient alsoin times of economic downturn

Strong credit ratings maintained

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Pizza acquisition meets Nestlé criteriaPizza acquisition meets Nestlé criteria



Frozen Pizza:

A great enhancement toFrozen Food in North America

7th January 2010

Nestle SH Call Presentation

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