NESTLE AT A GLANCE World’s leading food

manufacturer

Founded in 1866 in Vevey, Switzerland

Employs 283,000 people worldwide

Strengths:

Wide product and brand portfolio

Extensive investments in R&D (employs over 5,000 scientists and technicians)

Global geographic presence

NESTLE - GROWTH DRIVERS

• EM Sales 35%, sales growth 15% in 2008;

• Double-digit growth in PPP.

• Nespresso sales accounted for 2% of 2008 total sales; 30% average annual increase

• 6% growth in 2008

• Adding nutritional expertise through Gerber and Novartis medical acquisitions

NESTLE - OVERALL ASSESSMENT

Why?

Highly profitable company

Sound financial position

Predictable cash flows

…One of the best-in-class businesses in the food space.

FINANCIAL HIGHLIGHTS 2008

REVENUES US$ 104.1 b

EBIT US$ 14.8 b

ORGANIC GROWTH

8.3%

MARKET CAP.

US$ 172 b.

DEBT/ASSETS

16%

NESTLE - A PROFITABLE COMPANY…

2004 2005 2006 2007 2008

Nestlé

0.1713 0.1605 0.1726 0.2045 0.355300000000001

Kraft Foods

0.089230000000000

2

0.098130000000000

3

0.1072 0.094890000000000

5

0.083300000000000

1

General Mills

0.2185 0.1888 0.2151 0.2083 0.2521

Danone

0.069300000000000

3

0.187900000000001

0.2059 0.098500000000000

6

0.1208

Cadbury

0.1508 0.2301 0.1429 0.0973 0.1045

3%

13%

23%

33%

ROE - Comparative Analysis Best performer in terms of ROE

2008 exceptional year

Disposal of 24.8% of Alcon

Cost-cutting strategy: GLOBE Program

WHY IS NESTLE PROFITABLE?

2004 2005 2006 2007 20080%

2%

4%

6%

8%

10%

12%

14%

16%

18%

ROA - Comparative Analysis

Nestlé Kraft Foods General MillsDanone Cadbury

Constantly lower than industry margin;

Not exploiting the leverage effect

Trade-off risk profitability.

Continuous growth in ROA 04-08;

04-08: Highest ROA among Competitors;

General Mills 2nd best performer.

2004 2005 2006 2007 2008

2.22.1

1.92.2 2.1

2.7 2.82.6 2.7 2.8

Asset-to-Equity Ratio

Nestlé Yr Av.

WHY IS NESTLE PROFITABLE?

Company that best manages its margins;

Assets turnover stands in the industry average;

Brand Loyalty;GLOBE program.

2004 2005 2006 2007 20080%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Operational Profit Margin

NestléYr Av.

Operational Profit Margin increases over time, while most competitors decrease;

Not the main responsible for 2008 exceptional year.

2004 2005 2006 2007 20080%2%4%6%8%

10%12%14%16%18%

Net Profit Margin - Com-parative Analysis

NestléKraft FoodsGeneral MillsDanoneCadbury

…A DEEPER LOOK TO NESTLE ACTIVITY…

Payables period highest in the industry

Inventory Strategic decision to increase it in

2008, still the highest

Working Capital18 days

Financing the WC mostly by means of suppliers

…A STRONG FINANCIAL POSITION

Nestlé

General Mills

Cadbury

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Debt-to-Asset - 2007 and 2008 Comparative Analysis

2008 2007

Least leveraged in the industry

High credit quality

Conservative strategy

NESTLE - LIQUIDITY

2004 2005 2006 2007 20080.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

Current Ratio

NestléKraft FoodsGeneral MillsDanoneCadbury

Safe cash position. Why?

Nestle Current Ratio 2008: 0.99

Industry average (≈1)

Strong cash flows from operating activities

…taking out the inventories, Nestle shows the highest level of liquidity.

2004 2005 2006 2007 20080.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Quick Ratio

NestléKraft FoodsGeneral MillsDanoneCadbury

CONCLUSION!

THANK YOU FOR YOUR TIME

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