Sie sind auf Seite 1von 41

2005 full year results conference call

2005 full year results conference call - February 2006 Name of chairman
2005: Delivering The Nestle Model:
Improvement in key performance measures

¾ Strong organic growth both F&B and Pharma: 6.2%


¾ EBITA margin up 20bps to 12.9%; up 1 Billion CHF
¾ Improvement in Return on invested capital: +50bps
¾ Underlying EPS up 12.9%; dividend 9 CHF up 12.5%
¾ Strong cash flow - 1st buy-back complete; 2nd begun
¾ 4.5 Billion CHF returned to shareholders: up 59% vs 04
¾ Group transformation on track - Health, Nutrition,
Wellness, GLOBE, European Chilled Dairy

2 2005 full year results conference call - February 2006 Name of chairman
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.

3 2005 full year results conference call - February 2006 Name of chairman
Restatement of 2004 results

¾ 2004 results have been restated following


the first application of IFRS 2 share-based
payment and the discontinued operation
resulting from the announcement in
December 2005 for the chilled dairy activities
in Europe, where applicable.

¾ 2005 Full Year RIG & Organic Growth also


restated.

4 2005 full year results conference call - February 2006 Name of chairman
Product groups: organic growth above 5-6% target
12%
10.4 10.2
10
8.2
8
6.7 6.2
6.2
6 5.4 5.2
4.4 4.5
4 3.5 3.2
2.5 2.6
2

0
04 05 04 05 04 05 04 05 04 05 04 05 04 05
Beverages Milk products, Prepared Chocolate, PetCare Pharma Group
Nutrition and dishes and confectionery
2005 Ice cream cooking aids and biscuits
sales 23.8 23.2 16.7 10.8 10.6 6.0 91.1
CHFbn
5 2005 full year results conference call - February 2006 Name of chairman
Zones: organic growth - broad based improvement

12% 11.6
10.4
10
8.6
8 7.7 7.8
6.9 6.6 6.2
6
4.5
4

2 2.0
0.6
0
-0.4
-2
04 05 04 05 04 05 04 05 04 05 04 05
2005
sales America Europe AOA Water Other activities Group
CHFbn 30.8 27.6 15.7 8.8 8.2 91.1
6 2005 full year results conference call - February 2006 Name of chairman
P&L to EBITA: savings compensate cost pressures

FY 2004 FY 2005 Diff. basis points


As % of sales Restated (rounded)

Sales (CHF million) 84'690 91'075


100 100

Cost of goods sold (41.7) (41.7) -


Distribution (8.1) (8.1) -
Marketing & Admin (35.8) (35.7) 10
R&D (1.7) (1.6) 10

EBITA 12.7 12.9 20

2004 restated following the first applicationod IFRS Share-based Payment and the discontinued
operation resulting from the announcement made in December 2005 for the Chilled Dairy activities in
Europe, where applicable.
7 2005 full year results conference call - February 2006 Name of chairman
EBITA influencers

Positive Negative
• Currencies • China
• Efficiency savings • Input costs
• Pharma: Alcon • Russian confectionery
• Portfolio optimisation • Share based payments
• Strong RIG • UK confectionery

8 2005 full year results conference call - February 2006 Name of chairman
Evolution of EBITA margin

13.1
Market Operational
Mix activities
+ 30 - 20

12.9
2005

12.8 12.8
Currencies Share based Portfolio
payments optimisation
12.7 + 10
- 10 + 10
2004 12.7

9 2005 full year results conference call - February 2006 Name of chairman
Product groups: EBITA margins (2004 restated)
30.7
27.4
20
% margin

17.7
17.2
15 14.5 14.3
12.1
12.8 12.7 12.9
12.1
11.2 11.2 11.3
10

0 04 05 04 05 04 05 04 05 04 05 04 05 04 05
Beverages Milk, Nutrition Prep. dishes & Choc., confect. PetCare Pharma Group
EBITA Ice cream cooking aids and biscuits
CHF bn 4.1 2.6 2.1 1.2 1.5 1.8 11.7
10 2005 full year results conference call - February 2006 Name of chairman
P&L: EBITDA to Net profit

FY 2004 FY 2005 Diff. basis points


As % of sales Restated (rounded)
EBITDA 16.0 15.9
EBITA 12.7 12.9 20
Net other income/expenses (0.8) (1.0) (20)
Amortisation of goodwill (1.9) 0 190
Net financing cost (0.8) (0.6) 20
Taxes (2.8) (2.9) (10)
Discontinued operations 0.0 0.0 0
Share of results of Associates 1.9 1.0 (90)
Profit for the period of which
Attributable to Minority interests (0.5) (0.6) (10)
Attrib. to the Group (Net profit) 7.8 8.8 100
Underlying EPS (CHF) 18.82 21.25 +12.9%

2004 restated following the first applicationod IFRS Share-based Payment and the discontinued operation resulting from the announcement
made in December 2005 for the Chilled Dairy activities in Europe, where applicable.
11 2005 full year results conference call - February 2006 Name of chairman
Cash flow and financial position remain strong

¾ Operating and free cash flow decline slightly due to


CHF600 million cash injection to pension funds
¾ Cash conversion cycle unchanged at 47 days
¾ Capital expenditure down 10bps as % of sales
¾ Net debt declines from CHF10.2 bn to CHF9.6 bn
¾ Proposed dividend up 12.5% to CHF 9 per share
¾ 3 billion share buy-back under way

The Nestlé Model:


Creating value for shareholders
12 2005 full year results conference call - February 2006 Name of chairman
Increased EPS reflected in dividend payments

+11.8% CAGR
CHF
per 9
share
9.0
8
8.0
7
7.0 7.2
6 6.4
5
4
3
2
1
0
2001 2002 2003 2004 2005
13 2005 full year results conference call - February 2006 Name of chairman
Actively managed capital structure benefits
shareholders: cash returns
CHF 7.0 Share buy back
bn 10.2 Net d 6.2
eb t
6.0 Dividend
9.6
5.0 2.6
4.5 +39%
4.0
+59% 1.4
3.0 2.8

2.0
3.1 3.6
1.0

0
2004 2005 2006*

* 2006 assumes completion of 2nd buy-back


programme and payment of proposed CHF 9 dividend
14 2005 full year results conference call - February 2006 Name of chairman
Questions & answers

2005 full year results conference call - February 2005 Name of chairman
Roadshow agenda

• Key financials

• Value creation - growth & innovation

• Strategic overview 2005/6

• Management & Corporate governance

• 2006 outlook

16 2005 full year results conference call - February 2006 Name of chairman
Conclusion: successful delivery of
The Nestlé Model

¾ Organic growth ahead of market, driven


by key brands
¾ Margin improvement achieved despite
input cost inflation and one-off issues
¾ The Nestlé Model reconfirmed for 2006:
5-6% growth and consistent
improvement in margin

17 2005 full year results conference call - February 2006 Name of chairman
Background slides

2005 full year results conference call - February 2005 Name of chairman
2005 tax rate & underlying earnings per share*

Underlying tax rate


• decreased from 28.3% to 28.1%
- mainly due to market and currency mix
• ongoing tax rate to be below 30%

Underlying EPS
• increased 12.9% to CHF 21.25

(*definitions on next slide)


19 2005 full year results conference call - February 2006 Name of chairman
Calculation of underlying EPS - methodology

Net profit from continuing operations before


• amortisation and impairment of goodwill
• impairment of property, plant and equipment
• restructuring costs
• results on disposals
• material one-off items incl. in Net other income (expense)
• material one-off tax items

The tax charge used for this calculation is adjusted for the
tax effect of the excluded items (underlying tax charge).

20 2005 full year results conference call - February 2006 Name of chairman
Primary reporting: 2005 RIG and organic growth

% RIG % Organic Growth


12 11.6
% Growth

10.4
10 9.5
8.6
8 7.8
6.6
6 5.4
4
3.0
2 2.0
0.2
0

-2 Americas Europe AOA Waters Other


Sales
CHF bn 30.8 27.6 15.7 8.8 8.2
21 2005 full year results conference call - February 2006 Name of chairman
Primary reporting: EBITA margins (2004 restated)
25.7
% margin

25
21.6
20
17.3 16.7

15 14.9 15.3
12.8 11.8

10
8.3 8.1

0 04 05 04 05 04 05 04 05 04 05

EBITA Americas Europe AOA Waters Other


CHF bn 4.7 3.3 2.6 0.7 2.1
22 2005 full year results conference call - February 2006 Name of chairman
Product groups: 2005 RIG and Organic Growth
10.2
% Growth

10 % RIG % Organic growth


9.5
8.2
8
6.7
6.4
6
5.2
4.4 4.1
4
3.5
2.7 2.6
2

0.2
0
Beverages Milk products, Prepared Chocolate, PetCare Pharma
Nutrition dishes and confectionery
and Ice cream cooking and biscuits
Sales aids
CHF bn 23.8 23.2 16.7 10.8 10.6 6.0
23 2005 full year results conference call - February 2006 Name of chairman
Operating and free cash flow - includes
CHF600mn extra contribution to certain pension funds in 2005
CHF billion

12
10.41
10.25 10.21
10 10.13

8.61
8

4.94 6.28 6.36 6.64 6.56


2

0
2001 2002 2003 2004 2005

Free cash flow Operating cash flow


24 2005 full year results conference call - February 2006 Name of chairman
Cash conversion cycle

70
Days

60 56
50 47 47
50 46
40
30
20
10
0
2001 2002 2003 2004 2005

(AVG trade receivables/sales) x 365 + (AVG inventory/ COGS) x 365


- (AVG trade payables/ COGS) x 365

25 2005 full year results conference call - February 2006 Name of chairman
Net indebtedness
CHF billion

25

20 19.4

15 15.0
14.4
10 10.2 9.6
5

0
2001 2002 2003 2004 2005

* Total financial liabilities minus liquid assets.


Liquid assets do not include the carrying value of treasury shares
(CHF 2.8bn. at year-end 2005)
26 2005 full year results conference call - February 2006 Name of chairman
Currencies

average exchange rates


FY 2004 FY 2005 % change
CHF per

Euro (1) 1.54 1.55 + 0.3


U.S. dollar (1) 1.24 1.25 + 0.6
£ sterling (1) 2.27 2.27 - 0.1
Real (100) 42.49 51.61 +21.5
Yen (100) 1.15 1.13 - 1.6
Mex. Peso (100) 11.02 11.46 + 3.9

27 2005 full year results conference call - February 2006 Name of chairman
Evolution of Group's factories

2005

Number of factories at 31.12.04 500


Acquired/set up 2
Sold/closed (14)
Other (satellised) (1)
Factories at 31.12.05 487

28 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in the zones

2005 RIG OG
% %

Europe 0.2 2.0


Western Europe 0.1 1.7
Eastern Europe 1.3 5.3

Americas 5.4 7.8


US and Canada 5.6 7.0
Latin America 4.9 9.6

Asia, Oceania and Africa 3.0 6.6

29 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in Europe (Food):
- Key Markets
2005 RIG OG
% %

Western Europe 0.1 1.7


France 0.1 1.7
Germany - 0.5 0.2
PetCare Europe 4.0 5.0
GB region - 0.5 3.6

Eastern Europe 1.3 5.3


Russia - 5.6 0.8

30 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in the Americas (Food):
- Key Markets
2005 RIG OG
% %

United States and Canada 5.6 7.0


United States 4.3 6.3
PetCare North America 5.6 6.6
Dreyer's 12.3 10.6
Canada 3.8 7.0

Latin America & Caribbean 4.9 9.6


Brazil 5.5 5.4
Mexico 4.2 10.1

31 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in AOA (Food):
- Key Markets
2005 RIG OG
% %

Oceania and Japan 1.8 1.6


Japan 1.3 - 1.2

Other Asian markets 2.8 7.5


Greater China 3.1 3.7
Philippines - 6.2 3.1

Africa - 0.6 9.1

Middle East 9.4 13.0

32 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in Nestlé Waters

2005 RIG OG
% %

North America 17.7 16.5


Europe 0.9 - 0.2
Rest of the world 18.0 19.8

Total Nestlé Waters 9.5 8.6

33 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in Other activities

2005 RIG OG
% %

Alcon Group 10.2 10.6

JVs including:
- CPW 3.5 5.6
- Galderma 2.1 6.4

Total Other activities 10.4 11.6

34 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in Beverages

2005 RIG OG
% %

Soluble coffee 3.1 6.7


Nestlé Waters 9.5 8.6

Beverages 6.4 8.2

35 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in Milk products,
Nutrition & Ice Cream
2005 RIG OG
% %

Milk products 3.0 8.3


Nutrition 2.2 5.3
Ice cream 5.2 5.8

Milk products, Nutrition, Ice cream 3.5 6.7

36 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in Prepared dishes and
Cooking aids
2005 RIG OG
% %

Frozen and chilled 3.4 4.7


Culinary and others 1.8 4.1

Prepared dishes and cooking aids 2.7 4.4

37 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in Chocolate,
Confectionery & Biscuits
2005 RIG OG
% %

Chocolate 0.5 2.9


Confectionery - 2.1 0.3
Biscuits 1.3 3.4

Chocolate, Confectionery, Biscuits 0.2 2.6

38 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in PetCare

2005 RIG OG
% %

Europe 4.0 5.0


North America 5.6 6.6

PetCare 4.1 5.2

39 2005 full year results conference call - February 2006 Name of chairman
RIG and organic growth in FoodServices

2005 RIG OG
% %

Europe 1.1 3.2


Asia, Oceania & Africa 0.6 5.2
Americas 3.3 5.5

FoodServices 1.6 4.3

40 2005 full year results conference call - February 2006 Name of chairman
2005 full year results conference call

2005 full year results conference call - February 2006 Name of chairman