2013 half year results presentation - nestlé · august 8th, 2013 half year results 2013 half year...
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August 8th, 2013 Half Year Results
2013 Half Year Results
Wan Ling Martello
Chief Financial Officer
Roddy Child-Villiers
Head of Investor Relations
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August 8th, 2013 Half Year Results
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.
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August 8th, 2013 Half Year Results
2013 Half Year Highlights
RIG acceleration to 2.7%, all regions contributed
Trading operating profit margin +20 bps to 15.1%
Operating cash flow of CHF 5 billion
Input cost environment:
reduced pricing but benefit to margin
EPS up 3.4% reported;
underlying +7.2% in constant currencies
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August 8th, 2013 Half Year Results
2013 Half Year Highlights
Developed markets continued to grow
Emerging markets up over 8%
Double digit in Latin America, Russia, parts of AOA
Outlook:
We expect the growth momentum seen in the first half to
continue in the second half, allowing us for the full year to
deliver, in line with our commitments, around 5% organic
growth with an improvement in margins and underlying
earnings per share in constant currencies
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August 8th, 2013 Half Year Results
Operating Segments Growth
1.8 1.5
4.0
1.8
4.3 3.9
0.5
5.0 5.0
2.2
6.5
5.0
ZoneEurope
ZoneAmericas
ZoneAsia, Oceania
& Africa
NestléWaters
NestléNutrition
Other
% RIG % OG
3.7 9.4 6.0 5.0 13.6 7.5 Sales CHF bn rounded
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August 8th, 2013 Half Year Results
Operating Segments Margin Evolution
14.9 17.8 19.1
10.0
20.0 19.2
ZoneEurope
ZoneAmericas
ZoneAsia, Oceania
& Africa
NestléWaters
NestléNutrition
Other
H1 2012 TOP% H1 2013 TOP%
+20 bps +60 bps
No change
+30 bps
-10 bps
-60bps
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TOP = Trading Operating Profit
August 8th, 2013 Half Year Results
Product Groups Growth
4.6
2.4
-0.6
2.4 3.6
4.7 4.5
-0.2
4.7
7.1
% RIG % OG
Prepared Dishes
& Cooking Aids
PetCare Confectionery Milk Products
& Ice Cream
Powdered &
Liquid Beverages
6.9 5.5 4.6 8.6 10.1 Sales CHF bn rounded
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August 8th, 2013 Half Year Results
Product Groups Margin Evolution
24.0
15.9 13.5 12.7
19.0
Powdered& Liquid…
Milk Products& Ice Cream
Prepared Dishes& Cooking Aids
Confectionery PetCare
H1 2012 TOP% H1 2013 TOP%
+30 bps -110 bps +80 bps
+100 bps
-120 bps
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TOP = Trading Operating Profit
August 8th, 2013 Half Year Results
Each region includes Zones, Nestlé Waters, Nestlé Nutrition, Nestlé Professional, Nespresso and NHSc; OG = Organic Growth, RIG = Real Internal growth
Asia,
Oceania &
Africa
13.4 bn
+6.3%
+5.0%
Americas
19.4 bn
+5.0%
+2.1%
Europe
12.4 bn
+0.6%
+1.5%
Sales
OG
RIG
(CHF)
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August 8th, 2013 Half Year Results
Americas
Challenges:
Ice Cream
PetCare Speciality & Dog
Frozen versus Fresh
Frozen “nutritionals”
Water competitive
environment
In Latin America
Economic environment
Input costs
Positives:
PetCare Growth & Cats,
Treats & Litter
Stouffer’s & DiGiorno
Water market growth
Infant Nutrition
Coffee, Chocolate,
Coffee-Mate
Key categories in
Latin America
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August 8th, 2013 Half Year Results
Europe
Challenges:
The Macro situation
Southern Europe
Water & Ice Cream
Nestlé Professional
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Positives:
Growth & reinvestment
Customer service levels,
innovation
Premiumisation, value
focused offers
Russia, Germany
& Great Britain
PetCare & Coffee
Infant Nutrition
August 8th, 2013 Half Year Results
Challenges:
The Macro situation
Competitive environment in
some categories
Nestlé Professional in China
Asia, Oceania & Africa
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Positives:
Growth slower,
but dynamic
China, South Asia,
Indonesia, Malaysia
& Singapore
Powdered Beverages & Dairy
Key developed market categories
Nestlé & Wyeth Infant Nutrition
Water
August 8th, 2013 Half Year Results
Trading Operating Profit Margin
HY 2012 OtherRevenue
COGS Distribution Marketing Admin. R&D Net OtherTradingExpense
HY 2013
+100
+110
0
TOP
14.9%*
+70
TOP
15.1%
+20 bps
TOP = Trading Operating Profit
-60 +10
-10 -30 0
* 2012 figures fully restated as per IAS 19 and IFRS 11;
Trading Operating Profit
margin improves 20 bps
to 15.1%
Marketing investment +60 bps
Constant currency consumer
facing spend +15%
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August 8th, 2013 Half Year Results
Income Statement As % of sales
June 30
2012*
June 30
2013
Difference in
basis points/%
(rounded)
Trading operating profit 14.9 15.1 +20
Net other operating income/expense (0.1) (0.2) -10
Operating profit 14.8 14.9 +10
Net financial income/expense (0.8) (0.7) +10
Profit before taxes, associates and JVs 14.0 14.2 +20
Taxes (3.6) (3.9) -30
Share of results of associates and JVs 1.6 1.5 -10
Profit for the period 12.0 11.8 -20
Attributable to non-controlling interests 0.5 0.5 0
Attributable to shareholders of the parent 11.5 11.3 -20
Basic EPS (CHF) as reported 1.55 1.60 +3.4%
Underlying EPS (CHF) constant currencies +7.2%
* 2012 figures fully restated as per IAS 19 and IFRS 11
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August 8th, 2013 Half Year Results
Operating Cash Flow
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OperatingCash Flow
30 June 2012
Operatingimprovement
Variationof working
capital
Others OperatingCash Flow
30 June 2013
5.2
5.0
+ 0.6 - 0.5
- 0.3
- 0.2
in CHF bn (rounded)
August 8th, 2013 Half Year Results
1. Group – High Quality Performance
RIG acceleration
Margin improvement & increased
marketing spend
Strong cash flow performance &
positive trend in working capital
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August 8th, 2013 Half Year Results
2. Broad Based Operational Performance
Americas: Progress on top & bottom line;
investment for growth
Europe: continued growth & investment for growth
AOA: Driving RIG & improving margin
Infant Nutrition: good growth globally;
Wyeth on track
Water: progress in tough season
Nespresso: double digit
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August 8th, 2013 Half Year Results
3. 2013 Outlook
We expect the growth momentum seen in the first half to continue
in the second half, allowing us for the full year to deliver, in line
with our commitments, around 5% organic growth with an
improvement in margins and underlying earnings per share in
constant currencies
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August 8th, 2013 Half Year Results 18
2013 Half Year Results
Discussion
August 8th, 2013 Half Year Results
Appendix
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August 8th, 2013 Half Year Results
Net Debt
18.1 22.2
0.2 6.6
3.1
Net debtJanuary 1st*
Treasury shares(net)
Acquisitionnet
disposals(incl. Minority)
Dividends Exchange rates &other
Free Cash Flow Net DebtJune 30th
+ 0.1
-0.5
CHF bn
* Net Debt excluding JVs since 1 January 2013 following adoption of IFRS 11 new accounting rules
- -
- -
+
20
∆4.1bn
August 8th, 2013 Half Year Results
Translational Impact of Swiss Franc
Weighted Average Exchange Rates
CHF per 1H 2012 1H 2013 (%)
US Dollar (1) 0.93 0.94 +0.9
Euro (1) 1.20 1.23 +2.1
£ Sterling (1) 1.46 1.44 -1.4
Real (100) 49.90 46.22 -7.4
Mex. Peso (100) 7.01 7.46 +6.4
Yen (100) 1.16 0.98 -15.8
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August 8th, 2013 Half Year Results
FX Impact on All Businesses
(%) 1Q 2013 1H 2013
Zone Americas -2.6 -2.4
Zone Europe +1.2 +1.3
Zone AOA -1.0 -1.4
Nestlé Waters +0.9 +0.8
Nestlé Nutrition -1.9 -1.8
Other +0.2 +0.3
Total -0.9 -0.9
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