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Nestlé in CWAR winning in the new reality

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Presentation to the 2012 Nestlé Investor Seminar, September 25, Shanghai, China

Presentation to the 2012 Nestlé Investor Seminar, September 25, Shanghai, China

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  • 1. Nestlé in Centraland West Africa:Winning in theNew RealityEtienne BenetCEONestlé Central and West Africa RegionNestlé Investor Seminar, ShanghaiSeptember 25th, 2012
  • 2. Agenda1. Introducing Central and West Africa2. Winning in The New Reality3. Performance1 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 3. CWAR: a region of limitless possibilities350 million consumers in a land mass…larger thanEurope orChina…2 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 4. CWAR: a region of limitless diversity The region of population size diversity The region of limitless ethnic diversity The region of consumer wealth disparity And unequal consumer literacy levels3 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 5. CWAR: a region of limitless resources 2011 GDP growth All countries above world average (3.7%), including 4 in top 30: Ghana (13.5%), Equatorial Mauritania Cape Verde Guinea (7.1%), Liberia (6.9%) and Nigeria Niger Chad (6.9%) Senegal Gambia Mali Burkina Faso Guinea Bissau Ghana Guinea Conakry Côte d’Ivoire Nigeria Central African Ease of doing business Sierra Leone Liberia Benin Cameroon Republic All countries in the bottom tier except Ghana and Togo Equatorial Guinea Cape Verde Gabon Gold Wood São Tomé & Copper Cocoa Principe Bauxite Cotton Uranium Oil Diamond Gas4 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 6. In a very traditional tradeenvironment…Small shops and outlets dominateCWAR’s trade environment Open Small Pharmacies/ Modern Market Shops Drugstores Trade 46% 50% 3% 1%5 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 7. There are obvious daily challenges…6 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 8. A region at the verge of exponential development? World’s fastest growing Fast Growing GDP population $1,317 billion by 2020, 440 million by 2020, CAGR 2.4% CAGR 6.8% World’s youngest population Emerging middle class 40% under 14 50% of spend on food and CPG Large working population >50% of GDP in the largest cities Healthy urbanization Stabilizing democracies 33 cities over 1 million in 2010, Better governance, increased foreign Developing infrastructures investments, more competition Source: ‘Rise of the African Consumer’; McKinsey & Company; UN Habitat7 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 9. CWAR: a region entering the “Hot Zone”8 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 10. Agenda1. Introducing Central and West Africa2. Winning in The New Reality3. Performance9 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 11. We know the place… We’re capitalizing on 50 years of experience! Trusted by consumers, customers, suppliers, authorities, civil society, investors…10 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 12. The largest Nestlé Region in Africa11 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 13. With simple and focused businesses…A few BIG 2%categories – with 4%great potential for 9%growth… 9% 41%Strong consumer knowledge,Leading in all businesses, driving 17%innovation from PPP to premium,addressing local tastes andnutritional needs. 18%12 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 14. Already ahead of food competition… Top 10 Food Companies in Central & West Africa Source : Euromonitor 2011* - Sales at Retail Price in m USD * Packaged Food and Hot drinks in Nigeria and Cameroon; not an exclusive list of companies (indicative list only)13 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 15. …however, competing for the share of wallet14 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 16. We are structured according to business realities……and according to otherelements: geography,language, product supply,trade zones, etc. Nigeria Tropical Cluster Savanna Cluster Côte dIvoire Coastal Cluster Western Cluster15 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 17. We have a comprehensive industrial footprint…90% of what wesell is producedin the region• Cost and supply advantage• Better response to local consumer tastes and needs• Local raw and packing material use• Local integration16 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 18. And we are continuously investing in all areas of thebusiness…Stayingahead,always• Continuous investment in our brands, assets and people• Expanding sales force to cover growing points of sales• Reaching people wherever they are• Developing local sourcing to ensure future supply17 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 19. 60,000 people directly earn their living from Nestlé in CWAR …and more 6,000 6,000 Nestlé + 54,000 households Nestlé employees employees Farmers, Sales & Distributors Staff, Third party dependants (drivers, security, agencies…)18 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 20. The development of our people is of utmost importance… In 2011: 90% of CWAR employees received formal training 170 employees participated in international trainings Training is one of the many ways that Nestlé best practices are shared and people are developed in CWAR19 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 21. Agenda1. Introducing Central and West Africa2. Winning in The New Reality3. Performance20 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 22. The Nestlé Strategic Roadmap toWin in The New Reality21 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 23. Leading change in CWAR by fighting local Nutrition, Health and Emerging markets and Popularlynutritional deficiencies with MAGGI® Wellness Positioned ProductsBecause 62% of non pregnantwomen in Nigeria are iron Consumer communicationdeficient, MAGGI® innovates withan iron fortified cube launchedfirst in Nigeria March 2012The MAGGI® business, sellingmore than100 million cubes perday has the ability to reach morethan 200 million consumers everyday.22 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 24. Leading change in CWAR by ensuring the Unmatched research &long-term supply of high-quality green coffee development capabilityIn Côte d’Ivoire, Nestlé is haslaunched the NESCAFÉ® Planto train and support over17’000 coffee farmers to make coffee farmingeconomically more attractive, for more agriculturalproductivity from less land andwater, to reduce the environmentalfootprint.23 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 25. Leading change in CWAR by engaging consumers Consumerthrough sport development with MILO® communicationMILO® provides sports Nutrition,development opportunities Health and Wellnessamong the youth with theGrassroots Sports Developmentstrategy, addressing the gaps inthe funding of sportsdevelopment programs acrossCWAR.… unearthing talents forvarious national teams, andbuilding strong equity for ourbusiness.24 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 26. Leading change in CWAR by educating, and Consumerenabling mothers to secure a better future for their communicationchildren Nutrition, Health andOvercoming the high illiteracy Wellnessrate prevalent in CWAR, NIDO®uses market and neighborhoodcaravans to educate mothers onthe threats of micronutrientdeficiencies facing childrenEducating them on how to bestnourish children for healthy growth25 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 27. Consumer communicationWith aunique wayto talk tolocalconsumers…26 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 28. CWAR: a strong contributor to the Nestlé model  Double digit Organic  Consumer facing Growth for the past 5 investment doubling in years last 3 years  Trading Operating  PPP is 63 % of total profit margin above sales with double digit Group / Zone average growth  CAPEX of 600 million  ROIC above the CHF in the past 5 years Group’s average Positive outlook for the future27 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 29. In summary…1. The potential of Central and West Africa is limitless2. Nestlé is extremely well placed to take advantage of this3. With its expected future performance CWAR will contribute even more to the Nestlé Model28 September 25th, 2012 Nestlé Investor Seminar, Shanghai
  • 30. During this presentation, 3’125’000 MAGGI cubes were consumed in Central and West Africa…29 September 25th, 2012 Nestlé Investor Seminar, Shanghai