Nestlé India Financial Analyst and Institutional Investor Webcast 26 Feb 2021

Nestlé India
Financial Analyst and Institutional Investor Webcast
26th Feb 2021

Disclaimer
This presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward looking
statements. You are cautioned not to place undue reliance on these forward-looking statements, which holds only as of the date.
The future involves uncertainties and risks that could cause actual results to differ materially from the current views being expressed.
Potential uncertainties and risks include but are not limited to factors such as changes in general economic, political or market conditions,
commodities and currency fluctuations, competitive product and pricing pressures, industrial relations and regulatory developments.
Significant disruptions in the operations due to unforeseen events (including as a result of the spread of disease)
Volume and Mix and Organic Growth (OG) are basis Nestlé Internal Reporting Standards.
Figures are regrouped / reclassified to make them comparable.
Calculations are based on non-rounded figures.
‘Analytical data’ are best estimates to facilitate understanding of business and NOT meant to reconcile reported figures.
Answers to Questions may be given basis generally available information.
Nestlé India - Financial Analyst and Institutional Investor Webcast, 26th Feb 2021
15.30 – 15.55 :
Report Card of a
Resilient 15.55 – 16.30:
Organization – Q&A
Presentation by
Suresh Narayanan
Agenda
Report Card of a Resilient Organization
Our Vision
Key Highlights 2020
Strong domestic sales growth, broad based and largely driven by volume and mix.
Nearly two thirds of our key products, boosted by in home consumption, posted
double digit growth.
Innovation and Renovation pipeline continues to be a thrust area.
Demand in Out of Home channels continued to improve.
E-Commerce continues to contribute better towards Domestic Sales.
FY
2020 Sales: Broad Based Performance Across All Product Groups
11.4%
Prepared dishes and
cooking aids
8.9%
Milk Products and Confectionery
Nutrition
Powdered
Contribution
and liquid
Contribution
beverages
Growth % Data represents Jan-Dec 2020 10.5%
Report Card of a Resilient Organization
The Consumption A History of Sustainable Creating Shareholder

Our Growth Model
Opportunity Performance Value
A Strong Thrust on Rapidly Accelerating our Consistent Media Navigating Commodity

Innovation Footprint Support to our Brands Headwinds
Unwavering
Commitment to Continuing with Our
Our People Matter
Sustainability and Proven Growth Model
Tackling Climate Change
The Consumption Story – Exciting Opportunities Ahead
Source- Bain & Company report on Future of Consumption in India 2018-2030
Our Growth Model Brand
Salience
Competitive
advantage
Investing and through R&D
Innovating expertise
Penetration
Led Growth
Strong Cost Leadership Position In Seven Out Of Eight Categories in most years
and Efficiency
Management
10 Years of Sustainable Volume & Mix Led Growth
600
14.5 20.0
9.2 11.6 9.6

6.8 8.4 8.5 6.7 7.8
5.7
2.5
10.0
1.8
500
(0.3)
-
400
(20.9) (10.0)
(20.0)
300
(30.0)
200
(40.0)
(50.0)
100
(60.0)
430 432 436 433 269 343 382 424 457 468 116 103 128 121
- (70.0)
#
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20
Domestic Vol ('000 Tons) * Volume & Mix Growth %

# 2015 impacted by MAGGI Issue * Volume and Mix Growth computed as per Internal reporting standards
10 Years of Sustainable Domestic Value Growth
16.9 14.3
11.8
20.0
11.0 8.6 8.5 10.7 10.2 10.1

130
7.1 10.9
2.6
10.0
10.9
8.2 -
(18.3)
110
(10.0)
90
(20.0)
(30.0)
70
(40.0)
50
(50.0)
(60.0)
30
(70.0)
71 79 84 92 75 88 95 105 117 126 31 29 34 33

10 (80.0)
2011 2012 2013 2014 2015 # 2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20
Domestic Sales (Bio) * Reported Growth % Comparable Growth %

# 2015 impacted by MAGGI Issue * Reported growth rates in 2017 & 2018 are adversely impacted due to lower reported sales by the change in structure of indirect taxes and reduction in realizations to pass on the GST benefits
10 Years of Accelerating Profit from Operations
22.9
24.0
52
21.7 21.7 22.0

21.0 21.1 22.0
42
20.0
20.0
18.5 18.5 18.3 18.1

18.1
17.6 18.0
32
16.4
16.0
22
14.0
12
12.0
14 15 16 18 13 17 18 24 26 29 7 7 8 7
2 10.0
2011 2012 2013 2014 2015 #

2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20
Profit from Operations (INR Bio) % of Net Sales

Profit from Operations is derived from Profit before Tax less Other Income and adding back Finance Costs (Including Interest Cost on Employee Benefit Plans), Net Provision For
# 2015 impacted by MAGGI Issue Contingencies (Others) and Corporate Social Responsibility Expense.
10 Years of Accelerating Net Profit
40 25.0
35
20.0
30
16.0 16.0 16.7

15.7 15.9
25
14.3 14.1 15.0
12.8 12.9 12.3 12.1 12.1

10.6
20
10.0
6.9
15
10
5.0
10 11 11 12 6 10 12 16 20 21 5 5 6 5
- -
#
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20
Net Profit (INR Bio) % of Net Sales

# 2015 impacted by MAGGI Issue
10 Years of Strong Value Creation
Return on Invested Capital (ROIC) 103.5
67.6 69.5
44.8 44.9
35.6 37.3 31.4 36.2
19.8 ROIC %
40
35
30
25
20
15
10
5
14.3 24.2 32.0 32.1 28.4 31.8 33.9 35.8 28.3 20.1
0
2011 2012 2013 2014 2015 2016 2017 2018* 2019* 2020
Invested Capital
(INR Billion) Invested capital : Average Equity + Long Term Borrowing
* Restated values post implementation of Accounting Standard on Leases
Leading to….Creating Significant Value For Investors
Market Capitalization
Total Shareholders Return

3,324%
Annualized Return
20.3%
INR
1,773 Bn
INR
*As on 31st Dec
50 Bn 2020
INR Billion is INR

100 crore.
2001 2020*
Source: Bombay
USD 1.1 Bn USD 24.3 Bn Stock Exchange.
(1 USD= INR 47.2) (1 USD= INR 73.1)
A Strong Thrust on Innovation
7,000 5.0
4.4
4.3 4.5
6,000
4.0
5,000
3.4
3.5
2.7
Over 80 4,000
3.0
2.5
new 3,000
2.0
1.5
products 2,000
1.5
in 5 years 1,000
1.0
0.5
- -
2016 2017 2018 2019 2020
New Product Sales % Contribution to Domestic Sales
#
Over 40 New Innovation Projects in Pipeline
Rapidly Accelerating our Footprint – Our Actions
Availability, Visibility & Consumer Connect
Widen Consumer
Portfolio People/Structure Visibility
Penetration Connect
Map not to scale
Rapidly Accelerating our Footprint – Overall Reach
Strengthening Our Distribution Muscle

Indirect Nestlé Direct Reach Total Reach (Nielsen)
3.3
2020 1.4
4.7
3.3
2019 1.3
4.6
3.2
2018 1.3
4.5
2.9
2017 1.3
4.2
2.7
2016 1.3
4.0
Rapidly Accelerating our Footprint - RURBAN
Enhancing Rural Reach
Villages Covered Wholesale HUB Small Distributors
89,288
2019 2,780
7,012
51,584
2018 1,818
6,657
8,909
2017 916 ~ 120,000
6,447
villages by end
1000 2024
2016 976
6,486
7935
Consistent presence across all Urban towns in last 5 years
Rapidly Accelerating our Footprint – New Channels
GROWING CONTRIBUTION OF E- COMMERCE TO

DOMESTIC SALES
2016 2017 2018 2019 2020
3.7
2020
E-Commerce grew by
111%
1.9
1.3
2020
0.9 2019
2018
0.6
2017
2016
Contribution
Consistent Media Support to Our Brands
9
1.0x 0.9x 1.3x 1.4x 1.3x 1.0y 0.6y 1.3y 1.6y

-
2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20
Note: Year values have been indexed taking 2016 as the base A&SP Spend Note: Quarter values have been indexed taking Q1 2020 as the base
Navigating Commodity Headwinds
Milk SMP
166
123
115 133
111
118
Milk 100 98 SMP
27% 100 99
10%
Wheat Green Coffee
119
110 112 110
100
114 114
105
100 99
Wheat
10% Green Coffee
6%
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Indexed with base 2016
People Matter @ Nestlé
40 25.0
180
Higher due to COVID 14
35
Related Cost and Long 160
Term Compensation
20.0
1.4x
Arrangements 12
30
1.3x 140
15.0
1.2x
11.3 10
1.1x 120
9.6 10.0 10.0 10.2

1.0x
25
10.0
100
20
80
5.0
15
60
10
40
(5.0)
5 2
20
9.0 10.2 11.2 12.6 15.0 7.6 7.5 7.6 7.7 7.8
- (10.0)
- 0
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Employee Cost (INR Bio) Number of Employees ('000)

% of Net Sales (Indexed to 2016) Turnover per Employee (indexed to 2016)
Unwavering Commitment to Sustainability and Tackling Climate Change
Accelarating our Sustainability Spend

120
Sustainable Packaging
100
80
Commitments on Water
60
40
Responsible Sourcing
20
1.0x 1.6x 1.8x

-
2018 2019 2020

Reach Zero Net Green House Gas Emissions
Indexed 2018
We Continue With Our Proven
Growth Model Brand
Salience
Competitive
advantage
Investing and through R&D
Innovating expertise
Penetration
Led Growth
Strong Cost
and
Efficiency
Management

Nestlé India Financial Analyst and Institutional Investor Webcast 26 Feb 2021

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Nestlé India

Financial Analyst and Institutional Investor Webcast

26th Feb 2021

Figures are regrouped / reclassified to make them comparable.

Calculations are based on non-rounded figures.

Answers to Questions may be given basis generally available information.

Demand in Out of Home channels continued to improve.

E-Commerce continues to contribute better towards Domestic Sales.

The Consumption A History of Sustainable Creating Shareholder

A Strong Thrust on Rapidly Accelerating our Consistent Media Navigating Commodity

Source- Bain & Company report on Future of Consumption in India 2018-2030

9.2 11.6 9.6

Domestic Vol ('000 Tons) * Volume & Mix Growth %

11.0 8.6 8.5 10.7 10.2 10.1

71 79 84 92 75 88 95 105 117 126 31 29 34 33

Domestic Sales (Bio) * Reported Growth % Comparable Growth %

21.7 21.7 22.0

18.5 18.5 18.3 18.1

2011 2012 2013 2014 2015 #

Profit from Operations (INR Bio) % of Net Sales

16.0 16.0 16.7

14.3 14.1 15.0

12.8 12.9 12.3 12.1 12.1

Net Profit (INR Bio) % of Net Sales

Return on Invested Capital (ROIC) 103.5

* Restated values post implementation of Accounting Standard on Leases

Total Shareholders Return

INR Billion is INR

2016 2017 2018 2019 2020

New Product Sales % Contribution to Domestic Sales

Availability, Visibility & Consumer Connect

Map not to scale

Strengthening Our Distribution Muscle

GROWING CONTRIBUTION OF E- COMMERCE TO

1.0x 0.9x 1.3x 1.4x 1.3x 1.0y 0.6y 1.3y 1.6y

2016 2017 2018 2019 2020 Q1-20 Q2-20 Q3-20 Q4-20

Wheat Green Coffee

Higher due to COVID 14

9.6 10.0 10.0 10.2

Employee Cost (INR Bio) Number of Employees ('000)

Accelarating our Sustainability Spend

1.0x 1.6x 1.8x

2018 2019 2020

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