Nestlé India
Financial Analyst and Institutional Investor Webcast
26th Feb 2021
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Disclaimer
This presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which holds only as of the date.
The future involves uncertainties and risks that could cause actual results to differ materially from the current views being expressed.
Potential uncertainties and risks include but are not limited to factors such as changes in general economic, political or market conditions, commodities and currency fluctuations, competitive product and pricing pressures, industrial relations and regulatory developments.
Significant disruptions in the operations due to unforeseen events (including as a result of the spread of disease)
Volume and Mix and Organic Growth (OG) are basis Nestlé Internal Reporting Standards.
Figures are regrouped / reclassified to make them comparable.
Calculations are based on non-rounded figures.
‘Analytical data’ are best estimates to facilitate understanding of business and NOT meant to reconcile reported figures.
Answers to Questions may be given basis generally available information.
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Agenda
15.55 – 16.30: Q&A
15.30 – 15.55 : Report Card of a
Resilient Organization –Presentation by
Suresh Narayanan
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Report Card of a Resilient Organization
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Our Vision
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Key Highlights 2020
Strong domestic sales growth, broad based and largely driven by volume and mix.
Nearly two thirds of our key products, boosted by in home consumption, posted double digit growth.
Innovation and Renovation pipeline continues to be a thrust area.
Demand in Out of Home channels continued to improve.
E-Commerce continues to contribute better towards Domestic Sales.
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Prepared dishes and cooking aids
Milk Products and Nutrition
Confectionery
Powdered and liquid beverages
Contribution
8.9%
11.4%
Growth % 10.5%Contribution
Data represents Jan-Dec 2020
Sales: Broad Based Performance Across All Product GroupsFY2020
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Report Card of a Resilient Organization
The Consumption Opportunity
Our Growth ModelA History of Sustainable
PerformanceCreating Shareholder
Value
A Strong Thrust on Innovation
Rapidly Accelerating our Footprint
Consistent Media Support to our Brands
Navigating Commodity Headwinds
Our People Matter
Unwavering Commitment to
Sustainability and Tackling Climate Change
Continuing with Our Proven Growth Model
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
The Consumption Story – Exciting Opportunities Ahead
Source- Bain & Company report on Future of Consumption in India 2018-2030
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Our Growth Model
Strong Cost and Efficiency Management
Penetration Led Growth
Investing and Innovating
Competitive advantage through R&D expertise
Brand Salience
Leadership Position In Seven Out Of Eight Categories in most years
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
10 Years of Sustainable Volume & Mix Led Growth
* Volume and Mix Growth computed as per Internal reporting standards# 2015 impacted by MAGGI Issue
430 432 436 433 269 343 382 424 457 468 116 103 128 121
14.5 9.2 6.8
2.5
(20.9)
1.8 8.4
11.6 9.6 5.7
8.5
(0.3)
6.7 7.8
(70.0)
(60.0)
(50.0)
(40.0)
(30.0)
(20.0)
(10.0)
-
10.0
20.0
-
100
200
300
400
500
600
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20
Domestic Vol ('000 Tons) * Volume & Mix Growth %
#
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
10 Years of Sustainable Domestic Value Growth
* Reported growth rates in 2017 & 2018 are adversely impacted due to lower reported sales by the change in structure of indirect taxes and reduction in realizations to pass on the GST benefits # 2015 impacted by MAGGI Issue
71 79 84 92 75 88 95 105 117 126 31 29 34 33
11.0 7.1 8.6
(18.3)
16.9
8.2 10.9
10.9 8.5 10.7
2.6
10.2 10.1 11.8 14.3
(80.0)
(70.0)
(60.0)
(50.0)
(40.0)
(30.0)
(20.0)
(10.0)
-
10.0
20.0
10
30
50
70
90
110
130
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20
Domestic Sales (Bio) * Reported Growth % Comparable Growth %
#
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
10 Years of Accelerating Profit from Operations
# 2015 impacted by MAGGI Issue
14 15 16 18 13 17 18 24 26 29 7 7 8 7
18.5 18.5 18.1 18.3
16.4 17.6
18.1
21.0 21.1 21.7 21.7 22.0
22.9
20.0
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
2
12
22
32
42
52
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20
Profit from Operations (INR Bio) % of Net Sales
#
Profit from Operations is derived from Profit before Tax less Other Income and adding back Finance Costs (Including Interest Cost on Employee Benefit Plans), Net Provision For Contingencies (Others) and Corporate Social Responsibility Expense.
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
10 Years of Accelerating Net Profit
# 2015 impacted by MAGGI Issue
10 11 11 12 6 10 12 16 20 21 5 5 6 5
12.8 12.9 12.3 12.1
6.9
10.6 12.1
14.3 16.0 15.7 15.9 16.0 16.7
14.1
-
5.0
10.0
15.0
20.0
25.0
-
5
10
15
20
25
30
35
40
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20
Net Profit (INR Bio) % of Net Sales
#
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
14.3 24.2 32.0 32.1 28.4 31.8 33.9 35.8 28.3 20.10
5
10
15
20
25
30
35
40
2011 2012 2013 2014 2015 2016 2017 2018* 2019* 2020
Invested capital : Average Equity + Long Term BorrowingInvested Capital
(INR Billion)
67.6
44.835.6 37.3
19.831.4 36.2
44.9
69.5
103.5
ROIC %
10 Years of Strong Value Creation
Return on Invested Capital (ROIC)
* Restated values post implementation of Accounting Standard on Leases
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Leading to….Creating Significant Value For Investors
*As on 31st Dec 2020
INR Billion is INR 100 crore.
Source: Bombay Stock Exchange.
Market Capitalization
INR1,773 Bn
INR50 Bn
2001 2020*
Total Shareholders Return3,324%
20.3%Annualized Return
USD 24.3 Bn(1 USD= INR 73.1)
USD 1.1 Bn(1 USD= INR 47.2)
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
A Strong Thrust on Innovation
#
1.5
2.7
3.4
4.4 4.3
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2016 2017 2018 2019 2020
New Product Sales % Contribution to Domestic Sales
Over 80 new
products in 5 years
Over 40 New Innovation Projects in Pipeline
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Rapidly Accelerating our Footprint – Our Actions
Availability, Visibility & Consumer Connect
Widen Penetration
Consumer Connect
People/StructurePortfolio Visibility
Map not to scale
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Rapidly Accelerating our Footprint – Overall Reach
4.0
4.2
4.5
4.6
4.7
1.3
1.3
1.3
1.3
1.4
2.7
2.9
3.2
3.3
3.3
2016
2017
2018
2019
2020
Strengthening Our Distribution Muscle
Indirect Nestlé Direct Reach Total Reach (Nielsen)
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Rapidly Accelerating our Footprint - RURBAN
6,486
6,447
6,657
7,012
976
916
1,818
2,780
1000
8,909
51,584
89,288
2016
2017
2018
2019
Enhancing Rural Reach
Villages Covered Wholesale HUB Small Distributors
7935Consistent presence across all Urban towns in last 5 years
~ 120,000 villages by end
2024
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Rapidly Accelerating our Footprint – New Channels
20162017
20182019
2020
Contribution
0.6
0.9
1.3
1.9
3.7
GROWING CONTRIBUTION OF E- COMMERCE TO DOMESTIC SALES
2016 2017 2018 2019 2020
2020E-Commerce grew by
111%
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Consistent Media Support to Our Brands
1.0x 0.9x 1.3x 1.4x 1.3x 1.0y 0.6y 1.3y 1.6y -
1
2
3
4
5
6
7
8
9
2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20
A&SP SpendNote: Year values have been indexed taking 2016 as the base Note: Quarter values have been indexed taking Q1 2020 as the base
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Navigating Commodity Headwinds
100 99 105
114 114
2016 2017 2018 2019 2020
100
119110 112 110
2016 2017 2018 2019 2020
100
111
98
115
123
Wheat
Milk
Green Coffee
Indexed with base 2016
Green Coffee6%
100
118
99
133
166
SMP
SMP10%
Milk27%
Wheat10%
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
People Matter @ Nestlé
9.0 10.2 11.2 12.6 15.0
9.6 10.0 10.0 10.2 11.3
(10.0)
(5.0)
-
5.0
10.0
15.0
20.0
25.0
-
5
10
15
20
25
30
35
40
2016 2017 2018 2019 2020
Employee Cost (INR Bio) % of Net Sales (Indexed to 2016)
7.6 7.5 7.6 7.7 7.8
1.0x1.1x
1.2x1.3x
1.4x
0
20
40
60
80
100
120
140
160
180
-
2
4
6
8
10
12
14
2016 2017 2018 2019 2020
Number of Employees ('000) Turnover per Employee (indexed to 2016)
Higher due to COVID Related Cost and Long Term Compensation
Arrangements
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
Sustainable Packaging
Commitments on Water
Responsible Sourcing
Reach Zero Net Green House Gas Emissions
Unwavering Commitment to Sustainability and Tackling Climate Change
1.0x 1.6x 1.8x -
20
40
60
80
100
120
2018 2019 2020
Accelarating our Sustainability Spend
Indexed 2018
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
We Continue With Our Proven Growth Model
Strong Cost and Efficiency Management
Penetration Led Growth
Investing and Innovating
Competitive advantage through R&D expertise
Brand Salience