Nestle Financial Analysis

TABLE OF CONTENTS

 Acknowledgement……………………………………………………………

 History …………………………………………………………………………7

 Mission...………………………………………………………………..……. 9

 Vision…………...………………………………………………………...…...9

 Objective ……………………………………………………………………..10

 Company Profile ………………………...……………………....................11

 Brand...………………………………………………………………………..12

 Performance.…………………………………………………………………12

Page 1
Nestle Financial Analysis

Acknowledgments

All praises for almighty Allah whose uniqueness oneness is unchallengeable countless thanks to
the the lords of lords who blessed us with the courage and power to complete this report.

We feel great pleasure in expressing our profound and cordial gratitude to our respected teacher
and taught supervisors Sir Mohsin Farooq for his admirable cooperation guidance for us and
sympathetic attitude which enable us in the formulation of and compilation of report.

Our special thanks and favor for our esteemed friends for their everlasting cooperation and
giving us the homely atmosphere. Last but not the least we thank full to our parents and our
family members for their cooperation guidance and inspiration throughout the course

Page 2
Nestle Financial Analysis

History

he key factor which drove the early history of the enterprise that would become the Nestlé
Company was Henri Nestlé's search for a healthy, economical alternative to breastfeeding for
mothers who could not feed their infants at the breast.
In the mid-1860s Nestlé, a trained pharmacist began experimenting with various combinations of
cow's milk, wheat flour and sugar in an attempt to develop an alternative source of infant
nutrition for mothers who were unable to breast feed. His ultimate goal was to help combat the
problem of infant mortality due to malnutrition.
He called the new product Farine Lactee Henri Nestlé. Nestlé's first customer was a premature
infant who could tolerate neither his mother's milk nor any of the conventional substitutes, and
had been given up for lost by local physicians. People quickly recognized the value of the new
product, after Nestlé's new formula saved the child's life and within a few years, Farine Lactee
Nestlé was being marketed in much of Europe.
Henri Nestlé also showed early understanding of the power of branding. He had adopted his own
coat of arms as a trademark; in his German dialect, Nestlé means 'little nest'. One of his agents
suggested that the nest could be exchanged for the white cross of the Swiss flag. His response
was firm: "I regret that I cannot allow you to change my nest for a Swiss cross .... I cannot have a
different trademark in every country; anyone can make use of a cross, but no-one else may use
my coat of arms."
Meanwhile, the Anglo-Swiss Condensed Milk Company, founded in 1866 by Americans Charles
and George Page, broadened its product line in the mid-1870s to include cheese and infant
formulas. The Nestlé Company, which had been purchased from Henri Nestlé by Jules Monnerat
in 1874, responded by launching a condensed milk product of its own. The two companies
remained fierce competitors until their merger in 1905.
Some other important firsts occurred during those years. In 1875 Vevey resident Daniel Peter
figured out how to combine milk and cocoa powder to create milk chocolate. Peter, a friend and
neighbor of Henri Nestlé, started a company that quickly became the world's leading maker of
chocolate and later merged with Nestlé. In 1882 Swiss miller Julius Maggi created a food
product utilizing legumes that was 

Page 3
Nestle Financial Analysis

Our Vision

Nestlé’s global vision is to be the recognized leading Nutrition, Health and Wellness Company.
Nestlé Pakistan subscribes fully to this vision of being the number one Nutrition, Health, and
Wellness Company in Pakistan. In particular, we envision to.

• Lead a dynamic, motivated and professional workforce – Proud of our heritage and positive
about the future.

• Meet the nutrition needs of consumers of all ages – from Infancy to old age, from nutrition to
pleasure, through an Innovative portfolio of branded food and beverage products Of the highest
quality.

• Deliver shareholder value through profitable long-term Growth, while continuing to play a
significant and Responsible role in the social, economic, and environmental Sectors of Pakistan

Our Mission

To positively enhance the quality of life of the people of Pakistan by all that we do through our
people, our brands and products and our CSV activities.

Our Ambition

GOOD FOOD GOOD LIFE

Page 4
Nestle Financial Analysis

To be the leading Nutrition, Health and Wellness Company in

Pakistan.

QUALITY FACTORS
Nestle is one of the world's leading food companies. There passion for understanding what
people want and need from their food - and what they love about it - makes there brands a trusted
part of people's lives. Nestle is famous for its high quality, taste, good packaging and
distribution, purity, creamy, innovative and fresh products, cleanliness and hygiene.

Financial Performance
Financial performance of the Company is summarized below:

PKR Million 2010 2009 Change

Sales 51,487 41,156 +25%
Gross Profit margin 27.0% 28.9% -190 bps
Operating Profit margin 13.3% 13.5% -20 bps
Net Profit margin 8.0% 7.3% +70 bps
Net Profit 4,1 1 3 3,005 +36.9%
Earnings per share 90.69 66.27 +36.9%

Marketing And Sales

We want Nestlé products to be within reach for every single Pakistani. Yet nutritional value and
quality remain the most essential ingredients in all our brands. Over the years, food products
have evolved from mere commodities to a statement of lifestyle. As consumers get more health
and quality conscious, consumer empowerment surges.

We continue to play our part in facilitating this revolution by launching value-added products
such as CERELAC, NESTLÉ Raita, NESVITAand NIDO NNS and many other dairy and non-

Page 5
Nestle Financial Analysis

dairy products. Consumers can avail many of our products with branded active benefits that no
competitor product offers. Nestlé brands are designed to suit your lifestyle and your needs. You
can take advantage of the best nutrition in a way that is suitable for your tastes and lifestyle. For
instance, you can purchase NESTLÉ Juices in several different sizes depending on your needs: a
personal-sized 200 ml for on-the-go consumption, or a litre pack for your fridge.

All our key brands are equipped with the Nutritional Compass that ensures all the nutritional
information about the product is accessible thanks to our user-friendly nutritional labeling and
guidelines. We're proud to be among the only companies in Pakistan to venture outside the
commercial mode of communication, offering programmers catering to better child nutrition and
good parenting. We have developed an intensive distribution strategy that brings our products to
your door, through effective communication, door-to-door sampling, and exciting consumer
promotions. We focus especially on Pakistan's smaller towns, where activities such as town
storming, distribution drives and intensive distributor training ensure that products are easily
accessible and visible, giving us a strong competitive edge. Our widespread global network
presents opportunities to learn from innovative techniques used in faraway countries. Pakistan
has contributed in a big way towards this by introducing Nestlé NESTLÉ PURE LIFE to the
world. Pakistan’s favourite water is now available all around the world!

Supply Chain

Nestlé Pakistan's supply chain makes sure that Nestlé products are available, no matter where
you are in Pakistan. We integrate processes from the farm to markets, and ensure products are
delivered to you at the right time, the right cost and in the right quantities. In the first quarter of
2006 alone, we delivered an astonishing 136 million kg of Nestlé products in Pakistan.

Supply chain was established as a separate department in 2001. Since then, we've achieved a
number of milestones, including a cold-chain in 2002, centralized demand and supply planning
in 2003, and implementation of GLOBE in 2005.

Page 6
Nestle Financial Analysis

We were selected for a Best in Class repository study, and three of our best practices were
subsequently incorporated into the Best Practices Library

Human Resource management

HR is dedicated to our employees, and ensures that we have all the right people with the right
skills, in the right places at the right time.

Understanding that our people are the bedrock of all our business strategies, it is our mandate to
enhance their skills with cutting-edge training and provide them with world-standard facilities.
We select flexible, innovative people who are ready to confront new challenges and make a
difference. Our groundbreaking Management Trainee Programmed aims to develop talented
young men and women and help them achieve their potential in a dynamic and enabling
environment.
Over a hundred people travel out of the country every year to take advantage of our international
Training and development events.

Nestle Food Services

Whether it's in a restaurant, a café, a university or an office, we have a range of solutions to fit
your needs, from economical bulk packaging to ready-to-serve individual servings. Our
Foodservices team is there to help businesses and food and beverage professionals. We provide
high quality solutions that are convenient, economical and easy to use. We add value by offering
the ideal solution for your business. Our diverse products are known for their consistent quality
and are designed to optimize on utility and usage. When you partner with us, you work with a
company with 10 years of expertise, trust and the credibility of being the number 1 food and
beverage solutions provider in the world. Nestlé Foodservices operates in more than 60 countries
worldwide, on all 7 continents.

Consumer services
At Nestlé, our chief commitment is to our consumers, and we make every effort to make sure
that their voices are heard. When Henri Nestlé prepared his first boxes of infant formula for sale,

Page 7
Nestle Financial Analysis

he put his address on the packages. Today, our Consumer Relationship Panel exhorts people to
"Talk to Nestlé", expressing the same belief in openness and accessibility. Our consumer
services department is staffed by experts in every area related to our products and wellness, and
is poised to provide prompt and relevant service to our consumers.

We believe that consumer services requires us to talk to consumers and also, above all, to listen
to them. Only by listening to what people say can we understand what they want and need. Only
by understanding their needs can we serve our consumers to the fullest?

Page 8