30 March 2011 CAGE

Nestlé:a unique capability to win

CAGE 2011

30 March 2011 CAGE

DisclaimerThis 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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30 March 2011 CAGE

Paul BulckeCEO

Nestlé:a unique capability to win

30 March 2011 CAGE

The Nestlé Roadmap: an aligning dimension...

Operational Pillars

Growth Drivers

CompetitiveAdvantages

...more relevantthan ever before

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Leveraging our competitive advantagesfor today’s environment...

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Unmatched product and brand portfolio

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Unmatched product and brand portfolio - China

Mass Affluent100 - 200

Chinese UrbanHousehold

Annual Income(‘000 RMB)

Upper MiddleClass

40 - 100

Lower MiddleClass25 - 40

Poor<25

Global Affluent>200

AMBIENT DAIRY& CEREALS

COFFEE BEVERAGES CULINARY CONFECTIONERY ICE CREAM

3% 17%

Share of UrbanIncome

2005 to 2015

24% 28%

15% 39%

51% 10%

~7%

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Nutrition, Health and Wellness

Nestlé’s portfolio is positioned to drive growth and value

in all categories asthe Nutrition, Healthand Wellness leader

Pleasure Balance

Understanding

Consumer preference (60/40+)∼ 70% win rate

43% of F&B portfoliotested over last 3 years

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Over 6,500 products renovatedfor nutrition or health

considerations in 2010

e.g. fortified servings94 billion of culinary products

43 billion of ambient dairy products25 billion of chocolate-malt beverages

+13.2% consumer facing media investment in 2010

in constant currencies

Consumer communicationAdditional nutritional arguments

& product differentiation

Driving competitive differentiation &enhanced value

Increased investment in consumer communication

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Innovation Sweet-spot

Creating shared valueCan we create value for the society and Nestlé?

Consumer/Shopper InsightsWhat is needed by consumers?

Commercial CapabilityDo we have the commercial

capabilities to do this?

Scientific/Technological Capacity

What is scientifically feasible and technologically

possible?

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Nestlé innovation model

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Survival/HungerAroma Taste

Variety

Annual secured food & nutrient supply

FoodSupply

FoodSecurity

FoodPleasure

DiseasePrevention

HealthScience

Treatment and disease management

Health andWell-being

Avoidance of deficiencies

Strategic positioning in R&D

Nutrition

Health Science

Food Science Technology

Preservation Technology

Agriculture/Biotechnology

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2 Science Centres (Lausanne)2 Science Centres (Lausanne)27 PTC and R&D Centres

Nestlé’s global R&D footprint

ILLUSTRATIVE

2 Science Centres (Lausanne)27 PTC and R&D Centres

320 Application Groups

2 Science Centres (Lausanne)27 PTC and R&D Centres

320 Application Groups (significant EM presence)

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Drivingresearch globally,

enhancing performance

locally

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Health Science/

HCN

NutritionInfant

Nutrition Meals

& Drinks

DairyAmbient Dairy Chilled Cereals Beverages

Nespresso Waters CulinaryAmbient

Culinary Frozen/Chilled

Confec-tionery Ice Cream Petcare Professional

BeverageProfessional

Food

Science & Research

Institute of Health Sciences

NRC

NRC NRC NRC NRC NRC NRC NRC NRC NRC NRC NRCNRC

St. LouisNRC NRC

PTC /Lead Centre Konolfingen Konolfingen Fremont Konolfingen Lisieux Orbe Orbe Vittel Singen Solon York Beauvais St. Louis

St. JoeBeverage

Center Singen

SupportingCentres Minneapolis Beijing

SingenQueretaro

Orbe

MarysvilleBeijingDelhi

-

DelhiAbidjanBeijingSderot

MarysvilleSingapore

Delhi

MarysvilleBeijing

DelhiSingaporeShanghai

SingenSan Sepolcro

BrocSantiagoSderot

Bakersfield Amiens

BeijingKonolfing.MarysvilleShanghai

FremontSingaporeShanghai

Solon

Agriculture & Plant Science - - Tours - - Tours

AbidjanTours

Abidjan - ToursAbidjan - Tours

Abidjan Tours - - -

System TechnologyCentre Orbe

✔ ✔ - ✔ - - ✔ ✔ ✔ - - ✔ ✔ ✔ ✔

RTD Marysville ✔ ✔ ✔ ✔ ✔ - ✔ ✔ - - - - - ✔ -

Business&

Categories

Nestlé’s global R&D footprint

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Nestlé’s ‘5 generation I&R Pipeline’TodayVision

Product Technology Centres

Generation 3

Productdevelopment

Generation 1

Launched

Generation 2

Launchpreparation

Generation 4

Early stageresearch

Generation 5

Research withinnovationpartners

Nestlé Research Centre &External partners

Markets

Value & EBIT – year 3

Risk/Reward

Lucy

Heidi

Copacabana

HappyDays

Everest

Himalaya

Model T

Galaxy

LemonAdvanced

Neo

ScoopExpress

Impact*

TexturedIC

Satellite

Back to the Future

Rash*

0% Sugars

Pre Rash

Pole Position

Champion

Harmony

2 Step Acidification

MOM & Me

Althéra

Sinlac2 Stage Preemie

Pickwick

Diamond Halal

Garuda

Sesame Street

Lucy OrganicZorro 25 % 30 %0 %

EBIT Margin Year 3

Incr

emen

tal N

PS Y

ear

3 (C

HF

mio

.)

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Consumer value from Nestlé’s I&R PipelinePersonalised

Dematerialisation

33% of sales from products introduced or renovated

in the last 3 years

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Unmatched geographic presence

1867

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Unmatched geographic presence

18751874

1899 1899

1871

1899

1899

1872

1899

1899

18731912

18751899

1874

ILLUSTRATIVE

1867

1870

1899

1899

1868

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Historical presence

(first sales of infant formula)

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Unmatched geographic presence

Historical presenceR&D sites

ILLUSTRATIVE

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Unmatched geographic presence

Historical presenceR&D sitesFactories

91150

77

139

13

910

6

6

195

ILLUSTRATIVE

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150

Unmatched geographic presence

Historical presenceR&D sitesFactories

Operations

91

77

139

13

910

6

6

195

ILLUSTRATIVE

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15091

77

139

13

910

6

6

195

Emerging markets Capital Expenditure

CHF billion

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Unmatched geographic presence

Brands ‘owned’ by consumers locally:Creates deep roots and an unmatched

base forprofitable growth

% Nestlé trust score indexed to the category

Brazil228

South Africa154

India118

Switzerland119

Russia185

Malaysia213

Philippines240

China173Mexico

258UAE268

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People, culture, values and attitude

Europe32.4%

AOA27.3%

AMS40.3%

Total Employees: 281,000Nationalities: 150

Nationalities at HQ: 97Languages at HQ: 50Exec. Board nationalities: 11

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Interchange of cultures, ideas & best practices

2600 Expatriates originate and are

received in97 different countries

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North America

Latin America

Western Europe

Eastern Europe

Switzerland

Africa & Middle East

Asia

Oceania

154 104

315 113

389 367

778 704

123 34

352 155

404 13853 6

= In-patriates

= Ex-patriates

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Principle led, action driven

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Respect for Nestlé values will assure our longstanding success

Nestlé Management & Leadership Principles

High commitment to high-quality products and brands

Respect of other cultures and traditions

The Nestlé culture: strong work ethic, integrity, trust and mutual respect, tolerance, pragmatism, openness and curiosity, loyalty…

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Long-termthinking

Short-termactionsand

People, culture, values and attitude

Devolvedaccountabilities

Shared valuesand

Aligned Entrepreneurialand

Society Shareholdersand

Delivering the Nestlé Model

year after year

Fast Flexibleand

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30 March 2011 CAGE

Historical Commodity Prices since 1845 to 2010: Economist Industrial Index in US $ Nominal Terms.

A global challenge

Increased volatility in raw material prices

1,400

0

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A truly holistic approach

Creating competitive gaps at all steps in the

value chainleading to competitive

advantagein the market place

Nestlé Continuous Excellence

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Nestlé NCE gaining momentumNCE has reached just over

1/3 of our people...

340 out of 443 Factories have launched Goal Alignment

114 Factories have launchedFocused Improvement43 Markets trained inFocused Improvement

Roll-out continues across Finance, HR, Head Office functions, Sales, R&D…

...focused on NCE foundations

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Creating value from farm to fork

Farmers trained 144,926Markets covered by SAIN +23%

Average working cap -110 bpsLost time injuries -10%Recordable injuries -18%

Freshness at shipment +70 bpsCustomer survey +3 placesBad goods -21%

Packaging weight reduction -17%Output per factory +5%Distribution costs -20 bpsCase fill rate +30 bpsStock cover (Raw) -14%Stock cover (Finished) -3%

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SAIN = Sustainable Agriculture Initiative Nestlé.

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Over the last 10 years:+73% more production volume

-61% less water-44% less energy-51% less CO2

(Percentages per tonne of product)31

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10%DailyTasks

10%Fire

Fighting

60%Continuous Improvement

(Entrepreneurship & Creativity)

20%Strategy

10%Entrepre-neurship

&Creativity

50%Fire Fighting

40%Daily Tasks

Driving positive energy through the organisation

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The Nestlé Roadmap: a unifying dimension281,000 people aligned

Its power – our differentiation from peers – is in our ability to deliver in all areas:

Leveraging our competitive advantages

Optimising our drivers for accelerated growth

Excelling in our operational pillarsEnabling consistentout-performance

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30 March 2011 CAGE

Nestlé: a unique capability to winMarket share performance: all geographies & categories

Profitable growth in emerging & developed markets

Competitive gaps across the value chain

Rich pipeline of innovation with accelerating roll-outs

Consistent delivery of the Nestlé Model

Delivering shareholder returns in the short & long-term

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Discussion

Nestlé:a unique capability to win