CAGNY 2017

February 23, 2017

Franois-Xavier Roger
EVP, Chief Financial Officer
 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.

2 February 23, 2017 CAGNY 2017

 Agenda

Overview Of Nestl

Long-Term Value Creation

Structural Cost Saving Initiatives

Summary

3 February 23, 2017 CAGNY 2017

 Agenda

Overview Of Nestl

Long-Term Value Creation

Structural Cost Saving Initiatives

Summary

4 February 23, 2017 CAGNY 2017

 The Nestl story 150 years of
portfolio
evolution

Henri Nestl

1867
1905 1938 1960s 1980s 2000s 2011 2014

1929 1947 1970s 1990s 2010 2012

George H. Page
Anglo-Swiss Condensed
Milk Company

1866

5 February 23, 2017 CAGNY 2017

 A strong global footprint Unmatched
geographic
presence

R&D sites
Factories
Illustrative

6 February 23, 2017 CAGNY 2017

 Very diversified and balanced portfolio Diversified
by geography
& category

Sales Contribution 2016

Water
8%
Beverages
Confectionary 22%
10%
Beverages
AOA AOA
25%
AMS AMS
45% Petcare
14%
Nutrition & Nutrition and
Health Science Health Science
EMENA 17%
Prepared
30%
Culinary dishes EMENA
and
cooking aids
Dairy & IC
13% Milk Products
and ice cream
16%

7 February 23, 2017 CAGNY 2017

 Strong global and local brands 34 billionaire
brands; local
jewels

8 February 23, 2017 CAGNY 2017

 Agenda

Overview Of Nestl

Long-Term Value Creation

Structural Cost Saving Initiatives

Summary

9 February 23, 2017 CAGNY 2017

 Commitment to long-term value creation Balanced
top and
bottom line
growth
Nutrition Health and Wellness Strategy

Balanced top and bottom-line growth key to long-term value creation:

Invest selectively in fast-growing categories and regions

Address underperforming businesses
Portfolio management
Product and business model innovation; Embrace digital opportunities
Leverage existing efficiency culture; Execute structural savings projects

Continuous FCF improvement to support sustainable, growth-oriented dividend

Prudent approach to capital allocation, including M&A

10 February 23, 2017 CAGNY 2017

 Quality Organic Growth driven by Real Internal Growth Industry-
leading
volumes
(RIG)
% Pricing
% Real Internal Growth

5%

4%

3%

2%

1%

0%

Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16

11 February 23, 2017 CAGNY 2017

 Cost efficiencies and portfolio management driving Gross
Margin
gross margin evolution +350bps in 4
years

52.0% Gross margin as a % of sales

50.0%
50.6%
49.6%
48.0%
48.1%
47.1% 47.8%
46.0%

44.0%

42.0%
2012* 2013 2014 2015 2016
*Re-stated

12 February 23, 2017 CAGNY 2017

 Continuous margin-improvement over time Consistent
TOP margin
development

Trading Operating Profit (TOP) margin improvement

1
1
in bps 2012-16 (constant currency)
1 +28 bps / year
1
1
1
0
0
0
0
0

2012 2013 2014 2015 2016

13 February 23, 2017 CAGNY 2017

 Consistent industry-leading cash flow generation Industry-
leading FCF
generation
13.0%

12.5% Free cash flow as a % of sales

12.0%

11.5%

11.0%
11.2% 11.3%
10.5% 11.0% 10.9%
10.0%
10.2%
9.5%

9.0%
2012* 2013** 2014*** 2015 2016
*Re-stated
** Adjusted for exceptional income due to Givaudan disposal (CHF 1.1 bn)
*** Adjusted for exceptional income due to Loral transaction (CHF 4.1 bn)

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 Sustainable dividend per share in CHF Long-term
dividend
growth

22nd consecutive year of increase

2.50
2.252.30*
2.15 2.20
2.05
2.00 1.95

Dividend in CHF

1.50

1.00

0.50

0.00

*Proposed dividend 2016

15 February 23, 2017 CAGNY 2017

 Balanced Emerging and Developed Markets Balanced
EM vs DM
exposure

Sales contribution 2007 Sales contribution 2016

Emerging
Markets Emerging
32% Markets
42% Developed
Developed Markets
Markets 58%
68%

16 February 23, 2017 CAGNY 2017

 Driving our profitable growth in emerging markets Balanced
EM vs DM
exposure

Developed Emerging

Sales 58% 42%

Annual Growth 12-16 +1.6% +8.3%

Growth in Marketing
100 115
Spend index

Profit <

17 February 23, 2017 CAGNY 2017

 Industry-
Quality growth: leading in eCommerce leading
e-commerce
development

eCommerce as % of Group Sales

4.9%
eCommerce Sales (FY15 vs FY16):
Group: +18%
Ex-Nespresso: +34%
2.9%

0.0%
2012 2016
18 February 23, 2017 CAGNY 2017
 Playing in the right categories Leading
positions in
growing
Nestl
presence
F&B fastest growing categories (CAGR 2013-16, %) categories
+ Portioned Coffee 13,2

-
Bottled Water 9,0

Milk Formula 8,3

Yogurt 7,4

Baby Food 7,1

Other Plant-based Hot Drinks 7,0

Fruit Snacks & Nuts 6,9

Oils & Fat 6,7

Sports Energy Drinks 6,7

Powder Milk 6,7

Source: Euromonitor
19 February 23, 2017 CAGNY 2017 (categories above $7 bn value RSP)
 and leading these categories Leading
positions in
growing
Nestl
presence
F&B fastest growing categories (CAGR 2013-16, %) categories
+ Portioned Coffee 13,2 #1
-
Bottled Water 9,0 #2
Milk Formula 8,3 #1
Yogurt 7,4 <#2
Baby Food 7,1 #1
Other Plant-based Hot Drinks 7,0 #2
Fruit Snacks & Nuts 6,9

Oils & Fat 6,7

Sports Energy Drinks 6,7

Powder Milk 6,7 #1

Source: Euromonitor
20 February 23, 2017 CAGNY 2017 (categories above $7 bn value RSP)
 Growth driven by innovation Innovation
And
30% of sales come from products innovated or renovated in the last 3 years renovation

Premiumisation Nutrition and Added-value Science

Les Recettes de lAtelier Nescaf Gold Barista Nido FortiGrow ProNourish

Nespresso Vertuoline Coffee-mate Natural Bliss Milo ready-to-drink Wyeth Illuma

21 February 23, 2017 CAGNY 2017
 Focusing on our billionnaire brands* Focus on
34
Billionaire
brands

Billionaire Rest of
brands the Group

Net Sales 77% 23%

Growth +5.2% +1.9%

Marketing spend 80% 20%

Profit 83% 17%

*Figures represent averages 2012 - 2016

22 February 23, 2017 CAGNY 2017

 Addressing the polarization of consumer trends Premium &
Affordable
grow >
mainstream

Premium 16% 19%

Mainstream 71% 67%

Affordability 13% 14%

(PPP*)
2014 2016
Average OG over the period 2014-2016
* PPP: Popularly Positioned Products

23 February 23, 2017 CAGNY 2017

 Driving our NHW profitable growth journey Nutrition
Health and
Wellness
(NHW)
Performance of businesses vs. NHW dimension*

NHW below NHW above

average average

Sales % 50 50

Growth index 100 180

Marketing spend index 100 100

Profit index 100 150

* NHW dimension measured by % of Net Sales with 60/40 win and Nutritional Foundation Analysis excluding categories which are 100% NHW

24 February 23, 2017 CAGNY 2017

 Agenda

Overview Of Nestl

Long-Term Value Creation

Structural Cost Saving Initiatives

Summary

25 February 23, 2017 CAGNY 2017

 Identified eight structural savings beyond NCE 3 Pillars to
our structural
savings
projects

Estimated structural
savings by 2020

1 Operations Raise our asset intensity by 10

percentage points

Leverage on scale through global

2 Procurement sourcing (from 40% today to 60%)
>200bps

Consolidate Nestl in the markets,

delayer functions, improve facility
3 G&A Expenses management and increase shared
services

26 February 23, 2017 CAGNY 2017

 2016 Achievements: Operations Sweating our
assets

Objective Achievements 2016

Sweat assets: Accelerated # of lines under

Reducing conversion and
distribution costs
Optimize our industrial footprint
TPM* from 12% to 22%
Increased asset intensity by
400bps

Increase capacity utilization Full factory footprint review

concluded

8 factories closed or sold

* TPM: Total Performance Management

27 February 23, 2017 CAGNY 2017

 2016 Achievements: Procurement Leveraging
our scale

Objective Achievements 2016

Implementing ONE 3 global hubs of purchasing

procurement model across organization set up: 60% of
Nestl positions staffed

From 40 to 60% of Global 6 markets go-live

Buying
3 categories go-live: Dairy,
Optimize purchasing back-office Metals and Media

28 February 23, 2017 CAGNY 2017

 2016 Achievements: NBE Simplifying
and
leveraging
scale
Objective Achievements 2016

Four out of six new business

process designs completed

Increase in Shared Service

Center coverage +60% (cost
coverage from 6% to 10%)

Set-up two new Shared

Service Centres in China and
Portugal, taking total to nine

29 February 23, 2017 CAGNY 2017

 2016 Achievements: Site Optimization Site
optimization
commenced
in USA
Objective Achievements 2016
Consolidate Nestl in the Announced consolidation of
markets Nestl USA HQ and support
functions in East Coast and
Improve facility management Ohio

De-layer functions Commenced restructuring of

US sales-force

Commenced site optimization

process at Group HQ in Vevey

30 February 23, 2017 CAGNY 2017

 Agenda

Overview Of Nestl

Long-Term Value Creation

Structural Cost Saving Initiatives

Summary

31 February 23, 2017 CAGNY 2017

 Summary
Long-Term value creation through balance of top and bottom line growth

Increased cost discipline and progress structural saving initiatives

Continuous FCF improvement to support sustainable, growth-oriented dividend

Prudent approach to capital allocation, including M&A

Manage change, faster decision-making and execution

32 February 23, 2017 CAGNY 2017

 Thank you !

33 February 23, 2017 CAGNY 2017