Nestlé (NESN) Nestlé Investor Seminar Day 2 summary

Consumer-led innovation and AOA growth agenda

• Zone AOA spans 92 countries across three continents; 2015 sales were CHF 14.2bn, or CHF 22.2bn including NiM.

• Priorities included accelerating Maggi and Milo in sub-Saharan Africa, improving Nescafé and Milo in ASEAN, restoring Yinlu in China and relaunching Maggi noodles in India.

• ASEAN launches reflected local flavor preferences; new Philippine coffee variants reached 2.4% market share, while Blend and Brew preference tests scored 65/35 in the Philippines and 80/20 in Thailand.

• Milo lunchbox expansion grew 35% in Q1 with minimal powder cannibalization; Milo Champions launched in Australia and was rolling out in Malaysia, with Indonesia planned for Q3.

• KitKat Studio introduced limited-edition flavors and personalized bars in Australia; Angola’s locally produced NESTUM exceeded capacity expectations within six months.

Market priorities

• India Maggi retail share recovered from 35% in Nov 2015 to 53% in Mar 2016; brand trust recovered from 3% at the crisis peak to 83%.

• China’s slower-growth market was shifting toward digital, premium and cross-border shopping; Yinlu’s plan emphasized healthier premium products, Milo and Shakissimo launches, and demand-led execution.

• Yinlu’s recovery was expected to take time and weigh on results through the balance of 2016.

• Japan Food and Beverages delivered 3.4% CAGR in 2011–15, with profitability 44% higher than in 2011; KitKat Chocolatory generated CHF 20m across eight shops.

• Vietnam sales grew 21.4% in Q1 2016; Nigeria reported 13.6% five-year CAGR and 47.8% ROIC.

Digital and commerce

• E-commerce reached 3.9% of sales in 2015 and 4.5% in Q1 2016, with sales growing more than 20% year over year.

• eContent plans called for 70,000 pieces across 20 brands in 2016; a global eContent factory was planned to take over creation and distribution in 2017.

• Digital channels received 25% of media spend; digital work lifted Coffee-mate Natural Bliss awareness 23% after campaign refinement.

• Digital acceleration training reached 91 graduates across 47 markets, with the program embedded in 23 markets; HENRI was planned for soft launch in June 2016.

• Nestlé Smart Buy was to be piloted in the U.S. and Japan to streamline checkout and retain first-party consumer data.