Laurent Freixe

Nestl Europe CEO

Brussels, 9th May 2012

Disclaimer
This presentation contains forward looking statements
which reflect Managements 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.

Our mission, Our Objective:

Consumers to trust Nestl to always offer
the tastiest and healthiest choices

Nestl in Europe
21.5 billion in sales in 2011
95 000 employees
88 factories in 19 countries
Brands and Products for every age, every
occasion
215 000 Customers

Our passion for

Consumers
Shoppers is at
the heart of all
what we do,
everyday
5

our passion for

our Customers is at
the heart of our
engagement and
commitment to
collaboration,
everyday, everywhere
6

A Global Initiative with Local

Implementations

SHOPPER &

CUSTOMER

EXCELLING IN

CUSTOMER FACING

CATEGORY

RELATIONSHIPS

EXECUTION

SUPPLY CHAIN

Nestl Shopper Insight Centres

Setting the stage for engagement and collaboration

The power of alignment....

Nestl
Strategy

Customer
Strategy

Trade & Industry

Best Practices &
Standards

...for a sustainable
collaboration
9

Our engagement with Industry & Trade Organisations

to drive collaboration along the value chain
The Consumer Goods Forum
GS1

Global

Industry & Trade Collaborative Platforms

(ECR Europe, ECR Asia Pacific, etc.)

Manufacturer Associations

Regional

(GMA, AIM, FoodDrink Europe, FCPC, FIA, etc)

Industry & Trade Collaborative Platforms

Local

(ECR Nationals)

Manufacturer Associations

10

Innovative practices

Advanced practices

Foundations
11

A New Reality

Challenging
times may
slow down
efforts for
collaboration and
implementation
12

Europe is increasingly challenging

Debt exposure without borders

Results in austerity measures increasing

Debt in euro-zone countries in 2010, as a percentage of GDP

UK

150 bio cuts in 2016

France

114 bio cuts by 2016

Netherlands

18 bio cuts by 2015

Germany

80 bio cuts by 2014

Italy

74 bio austerity package by 2013

Spain

90 bio by 2014

Source: Financial Times

And impacting on economic prospects

No growth in Euroland forecast in 2012

5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
Source: EU

5.1

EUROLAND

4.7

4.5

4.2

3.8

1.7

WORL
D
3.5

2.0
1.6

2.0

1.5

-0.3
2010

Source: Goldman Sachs/EU

2011

2012

2013

2014

2015

13

Understanding the needs and consequences

of ageing populations

14

The Middle Class on the move in CEE

2010-2015
CAGR

70M+
2005-2015

1,769.5 B
1,316.2 B

2,247.0 B

5%

640.6

4%

532.6

446.8

1,172.1

5%

940.1
667.7

Middle Class Consumption:

CEE*

201.7

296.7

434.3

2005

2010

2015

Middle Class Consumption:

Russia

8%

Middle Class Consumption:

CIS ex Russia

Source: AC Nielsen
15

Increasing time spent online

290
TV

Minutes/day

270
250

Internet and
Mobile

230
210
190

170
150
2008

2009

2010

2011
Source: eMarketer (March 2012)

16

Internet access increasingly

Mobile (and Smarter)
Shopper Purchase / Retailer Sales

In-Home
Digital
coupons
Retailer
websites
SEO/SEM
E-commerce
Shopping
apps

Social conversation and commerce increasingly linked

On-the-Go
GPS
Mobile
search
Mobile sites
Shopping
apps

In-Store
QR codes
RFID
Paperless
coupons
Mobile
scanner
Kiosks/Digital
signage

Digital and the path to purchase are interconnected

17

Consumer Online Purchase is booming

E-commerce
sales growing by
more than 19% a
year and will be
almost $1.4
trillion by 2015
Note: Numbers in Billions USD, Source: Forrester (2011)

18

New Realities,
New Opportunities

19

Focus collaboration on value creation and

waste elimination along the supply chain
Innovating

Adapting
shopper
solutions
Capitalising the
Knowhow to excel
in execution

20

Innovation is a game changer

Customized

Solutions

Addressing
increasingly
complex
consumer
needs
Standardised
Products

Systems

Services
21

Collaboration is a game changer

Jointly Agreed Growth (JAG)
Approach focused on Shopper Value
3 year + joint category development plan
DataAsharing
Framework
Demand & Supply
In-store execution
On-Shelf Availability: A
service
to the
shopper
Pragmatic
Approach
for Developing and
Monitoring / Joint KPIs
Joint investment plansImplementing Jointly

Step 1
Review the economic and
shopper environment

Step 5
Monitor &
adapt

Step 2
Review
performance
and agree
growth
strategy

Conditions
for success
Step 3
Define and
agree 3-year
JAG plan

Step 4
Execute the
JAG plan

Successfully
implemented with

Agreed Growth Plans

22

LEAN Supply Chain

Design and execute the most optimal
and efficient value stream
Raw Material

Mapped material and information

flows from orders to store shelf

Packaging

Manufacturing

Distribution

Customer

Consumer

Eliminate Non Value Added activities

Identified non value added activities in

the value stream
Identified key initiatives to eliminate
waste and deliver improvements
across a balanced scorecard of KPIs

Value Stream

Suppliers

Consumers

Reduce Lead Time

Higher
flexibility

Less
stocks

Better
service

Less
Reduced
cost
Complexity

Improved
Freshness

23

Improved
Service to
Shoppers

Sustainable Supply Chain

Reducing the overall environmental footprint

Transport
Packaging
Warehousing
Etc.

Example of Sustainable Packaging

Leverage The Consumer Goods Forum work
in Europe
One language for common understanding
and metrics
Reconcile the requirements for Shelf Ready
Packaging and Sustainable Packaging
24

Open
perspectives
for the future

25

Manufacturers and Retailers collaborating

Trade & Industry Agenda
Accelerating implementation
of existing best practices
Product & service Innovation
Health & Wellness /Ageing
Populations
Environmental Sustainability

EU 2020 agenda
Single Market
Digital Market
Innovation to boost
consumption and recover
growth
Green and inclusive
growth

26

Thank You

27