AUTUMN PRESS CONFERENCE October 18, 2007 - … 2007 9 months sales conference call –October 2007 Name of chairman ... (value-added), WIDER and World Bank; Nestlé F&C; analysis EIR

Name of chairman

AUTUMN PRESS CONFERENCEOctober 18, 2007

2007 9 months sales conference call – October 2007 Name of chairman2

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.

2 Name of chairmanAUTUMN PRESS CONFERENCE 2007

Key Figures

• Sales of CHF 78.7bn, up CHF 6.5bn (+9%)

• Above-target Organic Growth of 7.2%

• Real Internal Growth of 4.5%

• Food and Beverages: 6.8% Organic Growth


SustenancePleasure andPleasure anddiversitydiversity

ConvenienceConvenience

5,000 13,000 22,000

Per-capita income (PPP)

Consumption of food manufacturing value-added

actual US$, per capita

28,000

Nestlé per capita sales

Sources: UNIDO (value-added), WIDER and World Bank; Nestlé F&C; analysis EIR

Growth scenario (2005-15)

+ US$ 170bn5.9% p.a.


+ US$ 70bn6.9% p.a.

Demographics Focusing on the Low and High Ends

US$ 1,500

PPP

$240 billion opportunity


P. Polman


+ 0.9%+ 0.9%

+ 2.7%

+ 4.5%

CHF 78.7 bio

Acq. / Divest.Exchange

Rates

Pricing & others

RIG + 7.2%organicgrowth

+ 9.0%total

evolution

Total Group

+ 1.0%

+ 1.1%

+ 2.6%

+ 4.2%

CHF 73.2 bio

Acq. / Divest.

Pricing & others

RIG + 6.8%organicgrowth

+ 8.9%total

evolution

Food & Beverage

Exchange Rates

9 months sales 2007: Organic growth of 7.2%9 months sales 2007: Organic growth of 7.2%


Strong organic growth - highlights

• Organic growth of 7.2%

• Food and Beverage delivers 6.8% organic growth – strong performances in most areas

• Total sales increase 9% to CHF 78.7 billion

• Raw material costs up sharply, particularly agricultural

• Full Year targets reconfirmed:approaching 7% organic growthimprovement in constant currency EBIT margin

• Creation of Nestlé Professional – a global foodservices business


-5

0

5

10

15

20

25

30

35

40

OG % Jan-Sep 2007

BAB's:

Food & Beverage Billionaire Brands Organic Growth

Average market growth

http://webappps2.hq.nestle.com/appl_Bcom/Search/shFamilyPreview.asp?BRDSelect=-1&TXTCat=Beverages&CatId=75&OTSelect=-1&TXTKey=&TXTKey2=&TXTRef=&TXTName=&TXTDesc=&Action.x=7&Action.y=9&GotoPage=1&SO=1&FAM=278

http://webappps2.hq.nestle.com/appl_Bcom/Search/shFamilyPreview.asp?CORP=189&BRD=432&GotoPage=1&SO=2&FAM=5821


Organic Growth by product groupPharmaceutical products

PharmaSales : 5.5 CHF bio

RIG : +9.2%OG : +10.3%

Pharma

1.0

4.0

7.0

10.0

13.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Sales in bio CHF

Org

anic

Gro

wth

in %


Organic Growth by product groupNestlé Nutrition

Nestlé NutritionSales : 5.7 CHF bio

RIG : +6.6%OG : +9.7%

Pharma

1.0

4.0

7.0

10.0

13.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Sales in bio CHF

Org

anic

Gro

wth

in %

Nestlé Nutrition


Organic Growth by product groupNestlé Waters

Nestlé WatersSales : 8.2 CHF bio

RIG : +5.4%OG : +6.9%

Pharma

1.0

4.0

7.0

10.0

13.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Sales in bio CHF

Org

anic

Gro

wth

in %

Nestlé Nutrition

Nestlé Waters


Organic Growth by product groupConfectionery

ConfectionerySales : 8.4 CHF bio

RIG : +2.6%OG : +5.4%

Pharma

1.0

4.0

7.0

10.0

13.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Sales in bio CHF

Org

anic

Gro

wth

in %

Nestlé Nutrition

Nestlé Waters

Confectionery


Organic Growth by product groupPetCare

PetCareSales : 9.0 CHF bio

RIG : +4.1%OG : +7.1%

Pharma

1.0

4.0

7.0

10.0

13.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Sales in bio CHF

Org

anic

Gro

wth

in %

Nestlé Nutrition

Nestlé Waters

Confectionery

PetCare


Organic Growth by product groupPowdered & Liquid Beverages

Powdered & Liquid BeveragesSales : 12.8 CHF bio

RIG : +7.5%OG : +10.0%

Pharma

1.0

4.0

7.0

10.0

13.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Sales in bio CHF

Org

anic

Gro

wth

in %

Nestlé Nutrition

Nestlé Waters

Confectionery

PetCare

Powdered & Liquid Beverages


Leveraging our expertise across lifestages


Organic Growth by product groupPrepared Dishes and Cooking Aids

Prepared Dishes andCooking AidsSales : 13.3 CHF bio

RIG : +3.4%OG : +3.8%

Pharma

1.0

4.0

7.0

10.0

13.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Sales in bio CHF

Org

anic

Gro

wth

in %

Nestlé Nutrition

Nestlé Waters

Confectionery

PetCare

Powdered &

Liquid Beverages

Prep. Dishes and Cooking Aids


Organic Growth by product groupDairy (incl. Ice Cream)

Dairy (incl. IC)Sales : 15.7 CHF bio

RIG : +1.8%OG : +6.5%

Pharma

1.0

4.0

7.0

10.0

13.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Sales in bio CHF

Org

anic

Gro

wth

in %

Nestlé Nutrition

Nestlé Waters

Confectionery

PetCare

Powdered &

Liquid Beverages

Prep. Dishes and

Cooking Aids

Dairy


Food & BeverageOrganic Growth by Zone / Geography

* each region includes sales of Food & Beverages, Water and Nutrition businesses, Nespresso and F&B JVs.

F&B OG

+ 6.8%

Europe*

Asia, Oceania, Africa*

Zone Europe

Zone AOA

Americas*Zone Americas

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

10.0 13.0 16.0 19.0 22.0 25.0 28.0 31.0 34.0

Sales in bio CHF

Org

anic

Gro

wth


2005 2006 2007 2008

Nestlé on its way towards Nutrition, Health and Wellness

CHF 5 bio CHF 10 bio

Jenny Craig (Aug) NMN (July)Gerber (Sept)

Proteika (April)Musashi (Nov)

Leverage recent acquisitions and Extend our leadership by becoming the most innovative personalised Nutrition Company


Agricultural commodities prices continue to trend higher


Conclusion The Nestlé Model reconfirmed

• Outlook unchanged from Half Year

• The Nestlé Model reconfirmed for 2007

• Raw material environment tough – as expected

• Organic growth to approach 7%

• Improvement in constant currency EBIT margin


Nutrition, Health & Wellness the driver ofNutrition, Health & Wellness the driver ofgrowth and profitabilitygrowth and profitability

The Nestlé Model

5-6% organic growth Sustainable improvement in EBIT

Improving trend in Return on Invested Capital





5,000 13,000 22,000




28,000




+ US$ 170bn5.9% p.a.


+ US$ 70bn6.9% p.a.


US$ 1,500

PPP



Global Presence in HealthCare Nutrition

HealthCare Nutrition – Facts & FiguresSales in billion CHF: 1.7Markets: 30Employees: ~ 2'500


Conditions for Success

• Strong R&D

• Specialized marketing capabilities

• Capacity to distribute through all channels


Delivering Excellence to Babies

• Gerber founded in 1928 with mission to help parents raise happy, healthy babies

• Heritage of product innovation

• Recognized leader in developing cutting-edge science on infant and toddler feeding

Dorothy S. Gerber


Our Consumers

Performance Nutrition

Energy bars, specialty liquids,

proteins and training nutrition

Weight ManagementPersonalized

weight management

programs

HealthCare NutritionEnteral and oral nutrition

for Critical Care, diabesity, cancer,

pediatric and elderly patients

Infant NutritionInfant formulas,

pediatric specialties, infant cereals,

meals and drinks,Baby Care


Our Business

Nestlé NutritionBusiness Units: 4

Employees: 20'000

Office locations: 12

Factories: 30

Technical centres: 5




5,000 13,000 22,000




28,000




+ US$ 170bn5.9% p.a.


+ US$ 70bn6.9% p.a.


US$ 1,500

PPP



PPP Examples

South Africa

Thailand




5,000 13,000 22,000




28,000




+ US$ 170bn5.9% p.a.


+ US$ 70bn6.9% p.a.


US$ 1,500

PPP



What is Foodservice?

• We talk of foodservice every time that food or beverage is purchased and consumed away from home

• The consumption is in most cases immediate and on the spot

• Operators: restaurants, cafés, convenience stores, pubs, canteens, hospitals, schools, vending


• Due to shifts in demographics, socio-economic factors and consumer behaviour, foodservice represents an increasingly important consumer option

• Consumption varies from market to market, but consumer demand for convenience, taste and nutrition is driving foodservice growth in all markets

• The OOH spending today accounts for 30-50% of total consumer food and beverage purchases in mature economies

• The trend is a further and long term growth in OOH consumption

A Growing Trend


The Global Manufacturers

Source: Annual Reports, Broker reports, Web Page, Bain analysis

= 3% of the total market


Two Key Priorities

"The Global leader in branded hot and cold non-carbonated

Beverage solutions"

"Be the Local and Regionalleader in strategic Food

product solutions"

http://nestlefoodservices.com.au/brand.asp?n=5&bid=215

http://intranet.nestle.com/nikitashare/siteview/itemDisplay.asp?ins%5Fidnt=AF4FDE4F-239B-41B4-9C95-EE8B20B34194


Nestlé Professional


Nescafé Dolce Gusto




0 1 2 3 4 5 6 7 8 9 10

Quick to prepare

Easy to use

Easy to clean

Made by well-known brand

Suitable for everyday use

Attractive design

Great taste/superior quality

Cream/foam

Each person his choice

Wide range

9.6

9.6

9.5

9.4

9.3

9.2

9.1

9.1

8.3

7.3

Consumer Feedback


• France

• Spain

• Italy

• Portugal

• Austria

• Czech-Slovak

• Japan (test 800 -7/11 stores)

Launch Wave 2


2 Welcome Pack Executions

Germany/France/CH/Austria/UK/Czech/Slovakia

Spain/Portugal/Italy



1 European Packaging Solution

• 16 capsules per box• 8 languages



Same Demo Material



Same POS Material



Innovation Capsules


Innovation Capsules



Next Media Events

21 February 2008 – Spring Press Conference 10 April 2008 – Annual General Meeting21 April 2008 – First Quarter Sales

7 August 2008 – Half-Year Results23 October 2008 – Autumn Press Conference

AUTUMN PRESS CONFERENCE October 18, 2007 - … 2007 9 months sales conference call –October 2007 Name of chairman ... (value-added), WIDER and World Bank; Nestlé F&C; analysis EIR

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