Procurement   f   Mr. Kevin Petrie   Head of ProcurementThese slides differ to those shown at the Nestlé Investor Seminar ...
DisclaimerThis presentation contains forward lookingstatements which reflect Management’s currentviews and estimates. The ...
Agenda   Procurement objectives and Nestlé spend   Changing environment and managing commodity price trends   Value cha...
Nestlé Spend 2010                                l                   CHF 60 Billion    S&IM others including Marketing, Sa...
The Changing Environment and Price Trends   Global Growth (IMF)     – 4.4% 2011     – +/- 4.5% through 2014   Investment...
Agricultural Feedstock to Biofuel is SignificantShare of Feedstock Used Globally in 2010 for Biofuel    %    45.0         ...
Unprecedented Price Increases in Nominal Terms6   7 June, 2011   Nestlé Investor Seminar
Inflation adjusted: In 5th Commodity Boom Cycle7   7 June, 2011   Nestlé Investor Seminar
Commodity Market Volatility has IncreasedNestlé Monthly Commodities Index and Volatility %Nestlé weighted                 ...
Responsible Sourcing                                                                                         Nestlé Respon...
Summary - Anticipating the ChangingEnvironment and Creating Competitive Gaps    Provide forward looking information by bu...
Procurement                 fMr. Kevin Petrie  Head of Procurement7 June, 2011   Nestlé Investor Seminar
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NIS 2011 Procurement Kevin Petrie

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Procurement, Kevin Petrie, head of procurement, at the Nestlé Investor Seminar, June 7 2011

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NIS 2011 Procurement Kevin Petrie

  1. 1. Procurement f Mr. Kevin Petrie Head of ProcurementThese slides differ to those shown at the Nestlé Investor Seminar 2011 7 June, 2011 Nestlé Investor Seminar
  2. 2. DisclaimerThis presentation contains forward lookingstatements which reflect Management’s currentviews and estimates. The forward lookingstatements involve certain risks and uncertaintiesthat could cause actual results to differ materiallyfrom those contained in the forward lookingstatements. Potential risks and uncertaintiesinclude such factors as general economicconditions, foreign exchange fluctuations,competitive product and pricing pressures andregulatory developments.1 7 June, 2011 Nestlé Investor Seminar
  3. 3. Agenda Procurement objectives and Nestlé spend Changing environment and managing commodity price trends Value chain and Procurement impact Accelerating leverage Responsible Sourcing Building on our People’s Capabilities2 7 June, 2011 Nestlé Investor Seminar
  4. 4. Nestlé Spend 2010 l CHF 60 Billion S&IM others including Marketing, Sales, Contract Manufacturing3 7 June, 2011 Nestlé Investor Seminar
  5. 5. The Changing Environment and Price Trends Global Growth (IMF) – 4.4% 2011 – +/- 4.5% through 2014 Investment funds Currency Political Crisis Weather (El Niño/La Niña) Biofuel Increased Volatility4 7 June, 2011 Nestlé Investor Seminar
  6. 6. Agricultural Feedstock to Biofuel is SignificantShare of Feedstock Used Globally in 2010 for Biofuel % 45.0 40.8 40.0 35.0 30.0 25.0 21.4 20.0 18.4 15.0 13.1 10.0 5.7 5.0 2.9 0.5 0.0 FeedstockSources: OECD, FAO, EIA5 7 June, 2011 Nestlé Investor Seminar
  7. 7. Unprecedented Price Increases in Nominal Terms6 7 June, 2011 Nestlé Investor Seminar
  8. 8. Inflation adjusted: In 5th Commodity Boom Cycle7 7 June, 2011 Nestlé Investor Seminar
  9. 9. Commodity Market Volatility has IncreasedNestlé Monthly Commodities Index and Volatility %Nestlé weighted Monthly high-lowprice index* change % High Low Volatility % Average Volatility Period CHF Value (Bil)* and Range 2000 - 2005 12.4 (8 - 22) (0.8 - 2.2)* Market price, not price 2006 - 2010 16.4 (8 - 35) (0.8 - 3.5)paid by Nestlé8 7 June, 2011 Nestlé Investor Seminar
  10. 10. Responsible Sourcing Nestlé Responsible Sourcing Traceability Programme For high risk spend categories Direct engagement with 556,000 farmers Audit E.g. coffee, cocoa, Milk Programme vs. NSC 2010/2011: 1735 3rd party audits of key suppliers9 7 June, 2011 Nestlé Investor Seminar
  11. 11. Summary - Anticipating the ChangingEnvironment and Creating Competitive Gaps Provide forward looking information by business & commodity Dynamic Forecast 6 quarters forward and annual 3 year view – Nestlé began managing 2011 in Summer 2010 Risk management strategies – futures and options Total Cost Optimization - Procurement with technical, with R&D specifications, yields, recipes,… Strategic Sourcing enables the delivery of competitive gaps in the value chain Accelerating Leverage – GLOBE, Procurement Best Practices, and NCE. Responsible Sourcing Building on the Capabilities of our People10 7 June, 2011 Nestlé Investor Seminar
  12. 12. Procurement fMr. Kevin Petrie Head of Procurement7 June, 2011 Nestlé Investor Seminar

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