01 - nis 06 c. kuehnec 2 5 2 0 0 4 f e b 1 9 2 0 0 5 a p r 1 6 2 0 0 5 j u n e 1 1 2 0 0 5 a u g 0 6...

Name of chairman

Nestlé Investor Seminar

Nestlé Investor Seminar - Vevey June 8-9, 2006

Health, Nutrition and Wellness at Nestlé

Christiane Kuehne

2 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2006

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.


Our vision

*Peter Brabeck-Letmathe

Blue Print for the Future, October 2001

"We want to grow from the respected and trustworthy food company that

we are known as now, into a respected and trustworthy food,

nutrition and wellness company"*


Building on our heritage

1867: Henri Nestlécreates "Farine Lactée"

for infants, elderly and infirms


Nestlé's approach to Nutrition, Health & Wellness

Drive the Nutrition, Health & Wellness orientation across

the Company

Strengthen our leadership position in the core nutrition

business

Nestlé Nutrition CompanyCorporate Wellness Unit


What the Corporate Wellness Unit does . . .

• The mission: Drive the Nutrition, Health & Wellness orientation across Nestlé to deliver sustainable profitable growth.

• The strategy: Persuade consumers to prefer our brands by adding a superior Nutrition, Health & Wellness dimension to ourFood & Beverage business

• Wellness in Action is about: Accelerating the speed at which our vision and strategy transform into trust & value in the minds and hearts of consumers

• Outcome: A higher propotion of Group sales in added-value, faster growing, more profitable segments


Roadmap


Consumer


Most consumers see a strong link between food and their health

Datamonitor Consumer Survey, October 2004

IMPORTANT VERY IMPORTANT

0 10 20 30 40 50 60 70 80 90 100

France

Germany

ItalyHolland

SpainSweden

UK

USA

Overall


Nutrition increasingly influencing consumer choice

0 10 20 30 40 50 60 70 80 90 100

Relative importance of motivation for main meal choice in US/Europe

Datamonitor Consumer and Industry Opinion Surveys, 2004

Healthy, nutritious

Using up ingredients

HungerQuick, easy

TasteBoredom, stress

Energy

IndulgenceComplements other food

%


60/40+


60/40+ our strategic transformation tool

To increase the nutritional value of our products but not at the

expense of taste

To communicate the taste and nutritional

advantage of our products

60/40+


Which means…

We need to know the product "truth"– the consumer preference– the nutritional value of our product– our nutritional competitive advantage

60/40+ is the X-ray of our products


Consumer Communication

Consumer Insights

Innovation / Renovation

60/40 Taste Assessment

Nutritional Assessment

It is also a powerful Business tool

Nutrition Profiles

Driving Growth, Market Share and EBITA


25% of our Food & Beverage business ...

... goes through 60/40+ testing per year


Success Story: Dairy ChinaNestlé High Calcium High Iron


"I want to keep my body feeling young, and for this I need strong bones!"

66/34 taste preference

"With strong bones, you can face any challenge"

Improved profitability +410 bps, Business turnaround from declineto +4% MS in 10 months

Insight

60/40 Consumer Preference

NutritionalAssessment

Communication

Results

Good Nutritional Foundation

Nutritional Competitive Advantage: Calci-N for bone health

TV Commercial

Success Story: Dairy ChinaNestlé High Calcium High Iron


Success Story: Ice Cream CanadaReal Dairy


"I want to be able to indulge myself and my family, while still feeling like a good Mum"

68/32 taste preference

Good Nutritional Foundation

Ownership of consumer nutritional expectation through the Brand:Real Dairy

Nestlé Real Dairy took leadership from Breyers within 2 years and played a key role in the "Good For You" business

Insight



Communication

Results



0

5

10

15

20

25

30

Apr 1

9 200

3

June

14 20

03

Aug 0

9 20

03

Oct 04

2003

Nov 29

2003

Jan

24 20

04

Mar 20

2004

May 1

5 200

4

July

10 20

04

Sept

04 20

04

Oct 30

2004

Dec 25

2004

Feb 1

9 200

5

Apr 1

6 200

5

June

11 20

05

Aug 0

6 20

05

Oct 01

2005

Nov 26

2005

Jan

21 20

06

Mar 18

2006

BNF NRD

Becoming Number One!

Launch NestlLaunch NestlééReal DairyReal Dairy

BreyersBreyersReformulationReformulation

ACNielsen Marketrack, period ending March 18,2006, $Share of Premium I/C



Real Dairy Vanilla is the flagship for a "Good For You" range

With Omega 3 No sugar added

98% fat free97% fat free

Made with real fruit



Success Story: Maggi FranceSveltesse



" I know I should eat 5 fruits and vegetables a day, but it's not easy... "

Parity vs. regular soup (with fat)

Quick and easy vegetables on the go.

RIG +15%, MS + 0.8%



Great Communication

Results

Insight

Good Nutritional Foundation Nutritional Competitive Advantage: fibers

TV Commercial



Print Ad


Products


Nestlé policies

• Nestlé Policy on the Level of trans Fatty Acids in Foods

• Nestlé Policy on the level of Sodium (Salt) in Foods

• Nestlé Policy on the level of Sugar in Foods

• Nestlé Policy on the Iron Fortification of Foods

• Nestlé Policy on Nutrient Fortification


• Reduce sugar by 15%• New malt extraction• Increase complex carbohydrate• Same taste• Same costs

Renovation Innovation +Communication

R+D Framework+Policies+60/40+ profile

Health & Nutrition strategy in action

Nutrition Insights

Consumer Insights

Nutrition targetsÌ

Obesity concern New Milo

SugarConcern

ÌReduce sugar to meet Nutrition criteria


Health & Nutrition strategy in action

NIDO Nurturing

ALL AGES

AGE SPECIFIC

Full Cream "All in One Growth"

"Right Taste, Right Price,

Right Nutrition"

Affordability

Children’s Health & Nutrition Solutions

NIDO Nurturing


Optimising nutritional profiles

REDUCING SUGAR INCREASING CALCIUM

REDUCING FAT INCREASING FIBER

REDUCING SALT



Optimising nutritional profiles


Optimising nutritional profiles -Reducing

22% reduction in 5 years.Today covers 43 different recipes

Level of sodium in soups per 100 ml 2000

0

100

200

300

400

500

600

700

1 2 3 4 5 6 7 8 9 101112131415161718192021222324252627282930

Sodi

um m

g

Level of sodium in soups per 100 ml 2005

0

100

200

300

400

500

600

700

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

Sodi

um m

g


Optimising nutritional profiles -Increasing


Adding Health Benefits

Vitality / Protection Immunity & Protection

Intestinal Health

Heart Health

Building StrongerBones

Helps EnergyRelease

Long-Lasting Energy

Growth &Development

Feeling Good,& It Shows

Long LastingAlertness

"Refuelling"Growth

Active CholesterolControl

Helps Keep Calciumin your Bones

R

EasyDigestion

Branded Active Benefits accounted for sales of CHF 2.9 Bio in 2005


Branded Active Benefits (BAB)

BABs are registered trademarks related to specific

health benefits whose purpose is to add value to

existing Nestlé products:

Making a good Nestlé brand even better

They are always science-based


Success Story: Powdered Beverages Philippines

Innovations to reinforce Milo as " King of Energy" have helped fuel growth in the last 5 years

1999 2002


Increased growth, market share and EBITA

2002 2003

% Mkt Share

2005

78

2004

78

2001

71

75

77

EBITA doubled in 3 Years

+


Brands & Communication


Our Communication Platform Principle

Encourage and Empower consumers

to make informed choices about their diet and enjoy a

more balanced life


60/40+ Giving transparent information: the Nutritional Compass



Food



Svelty - Chile



LEAN CUISINE - Canada



MILO - Japan



NESCAFE - FoodServices



Maggi- Malaysia

Print Ad



Objective 80% of sales to have the Compass by end

2006


JPMorgan

Going one step beyond, in our view, is Nestlé, which has redesigned its nutrition labels in a more user friendly and easier to read fashion while identifying the benefits of certain ingredients and nutrients.

We believe this certainly is the way forward for the industry."

"A number of large companies already show detailed nutrition labels on their products on a systematic basis.

Others Say ...

Obesity - Reshaping the Food industry January 2006


Nutrition Communication -Nestlé Australia

Nestlé All Natural Yogurt

TV Commercial


Nutrition Communication -Nestlé Australia

Excellent performance in all key areas

• Spontaneous Awareness Nestlé 7%

• Awareness as healthy nutritious food company

6% 15%• Overall weighted WELLNESS score

23% 27%• Increased Prompted awareness of “ Good Food Good Life”

……………………….in just 6 months

Sales increase in all products!


Nutrition Communication -Nestlé Philippines

Nestlé NIDO

TV Commercial


Talking nutrition with our customers everyday

2005: 10 million incoming calls

to our Consumer Services


Nutrition, health & wellness at point of sale

Mexico

Philippines


Nutrition at point of sale

Mexico


Science


Nestlé Nutrition Council

The Nestlé Nutrition Council was founded in 1978 and is currently composed of 10 internationally-renowned scientists working in the field of nutrition

Prof. Dominique BELLI Hôpital des Enfants, Geneva, SwitzerlandProf. Bruce BISTRIAN Harvard Medical School, Boston, USAProf. Günter BLOBEL* The Rockefeller University, New York, USAProf. Michael GIBNEY Trinity College, Dublin, IrelandProf. Eric JÉQUIER Nestlé Foundation, Lausanne, SwitzerlandProf. Robert KROES Soest, The NetherlandsProf. Demetre LABADARIOS University of Stellenbosch, South AfricaProf. Tadashi NOGUCHI Chubu University, Kasugai, JapanProf. Irwin ROSENBERG Tufts University, Boston, USAProf. Bruno VELLAS University of Toulouse, France

*Professor Blobel, winner of the 1999 Nobel Prize in Physiology or Medicine,is a member of the Nestlé Board of Directors


Nestlé Nutrition Council

The main objectives of the Nestlé Nutrition Council is to:

• Review current and developing nutritional issues related to Nestlé's business and to determine what impact they would have on the Company's nutrition policies and its strategyIncluding: obesity (1995), diabetes (1997), childhood obesity (1998), Personalising Foods for health (2003)

• Provide relevant information and continuous advice concerning Nestlé's Corporate position on nutrition


Nestlé bringing together Science, Nutrition and the consumer

3500 people in R&D

1.6% of turnover spend on R&D

The external NRC scientific Network - 2005

103 contracts with universities

262 Scientific publications

International Nutrition Symposium '04, '05 & '06

Venture funds


NestléResearch

Center

Weight Control Healthy Aging

Health and Beauty

Growth & Development

Digestive Comfort

Performance

Protection

Health Benefit areas



Health and Beauty


Digestive Comfort

Performance

Protection





Digestive Comfort

Health and Beauty Performance

Protection





Digestive Comfort

Protection

Health and Beauty Performance




Health and Beauty


Digestive Comfort

Performance

Protection



People


USA

Canada

USA

Brazil

Germany

Chile

UK

Educating Consumers


FRANCE

Fleurbaix-Lavantie Results: Percent Increase in Obesity 1992-2000

0 %

50 %

100 %

150 %

200 %

250 %

95 %

195 %

4 % 1 %Girls

Boys

Fleurbaix-Lavantie

Nord-Pas-de-Calais

68

Educating Consumers


Primary sponsor since 1999 – 8000 schools

Australia

School Canteens Australia

Programme for schools, community and parents

Switzerland

2,000 primary schools Thailand 1,240,000 school

children reached since1999 - Russia

Educative programme forschools -Brazil

16 hours long education programTurkey

Educating Children


Wellness networks & implement "Wellness in Action" strategy and leverage scale

Partners:Provide strategic

input

NUTRITIONISTS:Drive Portfolio

renovation

CorporateCorporateWellnessWellness

UnitUnitZONES:

Lead strategyimplementation for

their respective markets

MARKETS:Transform the strategy

into winning actions

BUSINESS UNITS:Shape and drive the

strategy and innovation


Our transformation is well under way

Nutrition, health and wellness is adding value to ourbusiness by:

• Responding to consumer needs by:– improving the nutritional profile of our products, but

not at the expense of taste– providing reliable nutritional information to guide

consumer choices• Building on our heritage and know-how to capture

value for the Nestlé brand

Nestlé: the right products, the right categories, the best R&D


A CHF 90 billion opportunity that

• differentiates us from competitors and private label

• takes our portfolio to higher growth, higher margin segments

Nutrition, health & wellness Not just tomorrow's opportunity -

but today's reality at Nestlé

Nutrition, health & wellness at Nestlé

Name of chairman

Nestlé Investor Seminar

Nestlé Investor Seminar - Vevey June 8-9, 2006

01 - nis 06 c. kuehnec 2 5 2 0 0 4 f e b 1 9 2 0 0 5 a p r 1 6 2 0 0 5 j u n e 1 1 2 0 0 5 a u g 0 6...

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