The Indian FMCG sector is the fourth largest sector in the Indian economy worth over US$13.1 billion. Nestlé is the largest food company in the world by revenue. In India, Nestlé holds leading market positions across several categories including infant cereals, infant formula, dairy whitener, instant noodles, sauces, and coffee. Nestlé has a wide product portfolio distributed across India through various channels and has numerous manufacturing facilities across the country. Nestlé continues to grow its business in India through innovation, market expansion, and manufacturing investments.

1. Nestlé India
Company Profile & Business Environment Analysis
Sudeep Kumar

2. • The Indian FMCG sector is the fourth largest sector in the economy with a
total market size in excess of US$ 13.1 billion.
• Fast moving consumer goods (FMCG) is the 4th largest sector in the Indian
economy. There are three main segments in the sector – food and beverages
which accounts for 19% of the sector, healthcare which accounts for 31% and
household and personal care which accounts for the remaining 50%.
• Accounting for a revenue share of around 45%, rural segment is a large
contributor to the overall revenue generated by the FMCG sector in India.
• Urban segment accounted for a revenue share of 55% in the overall revenues
recorded by FMCG sector in India. The Government of India has approved
100% Foreign Direct Investment (FDI) in the cash and carry segment and in
single-brand retail along with 51% FDI in multi-brand retail.
Industry Overview

3. • GST rate for products of mass consumption such as aata, edible oils,
cereals, milk, etc was pegged at 5%
• medicines, fruit juices, pencils ball point pens, GST rate was pegged at
12%.
• hair oils, soaps, tooth pastes, kajal sticks, were classified in the 18%
• Distribution cost of the FMCG sector currently amounts to 2-7% of total
cost, which is expected to drop to 1.5% after implementation of GST.
• Due to the smoother supply chain management, payment of tax, claiming
input credit, removal of CST under the GST regime there will be a cost
reduction in terms of transportation and storage of goods.
GST implication

7. • Nestle,world largest food company Started with baby food in a
small city Vevey,Switzerland now had Revenue of $ 89.46
Billion with rank of 54th most valuable brand in the world.
Here are some more facts about Nestle.
Trivia

8. • 1959
- On 28th March, the Company was incorporated at New Delhi. The company was promoted by Nestle Alimentana S.A. through a
wholly owned subsidiary, Nestle Holdings Ltd., Nassau, Bahama Islands.
•
1989
- The name of the company was changed from `Food Specialities Ltd.' to `Nestle India Ltd.' on 24th March.
• 1990
- During the year company entered into chocolate business by introducing Nestle premium chocolates.
• 1994
- During the year company launched a number of new products viz., Cerelac Soya, Milk maid, Dessert Mixes, Maggo Tonit's Special
Cooking Bases, Maggi 1-2-3 noodles, And also launched, Bonus and Polo.
• 1995
- During the year company commenced construction of a new factory at Bicholim, Goa. At the same year, instant noodles factory was
installed and commissioned at Samalkha factory. - During the year company launched Kit Kat manufactures at the new factory at
Ponda, Goa
• - During the year company launched MILO-Chocolate energy food drink in South India and a range of culinary products like, Dosa and
Sampar mixes, pickles and new varieties of soups under the brand "Maggi".
Timeline

9. • 1997
- After the success of KitKat and Polo, Nestle India has launched its first product in the hard boiled sugar confectionery market, Allen's
Splash.
- Nestle's wafer chocolate brand, Kit Kat, which created a major dent in the market with its launch, its international milk drink brand
Milo has garnered a mere three per cent share (value terms) in the Rs 500 crore market, a year after its launch in India.
- Nestle India Ltd. (NIL) leads the list of the country's top 15 coffee exporters for the ongoing calendar year in terms of both quantum
and value for the period January 1 - October 23. 1998
- Nestle SA and the BM Khaitan group set up a joint venture, Nutritional Food Products India Ltd, in 1990 which was amalgamated with
NIL in 1993.
• 2015
-Nestle begins Maggi production in 3 states after the brand cleared court-directed safety tests -Nestle India resumes manufacturing at
Pantnagar (Uttarakhand) Factory -Nestle resumes manufacturing of MAGGI at Tahliwal, HP unit
Timeline Cont…

10. 1. The first product sold by the company was baby food: Henri Nestlé’s Infant Cereal
2. Nestlé is one of the main shareholders of L’Oreal which is, in case you forgot, the biggest cosmetics company in the
world.
3. Even more impressive is the fact that 29 of those brands generate annual sales of more than $1 billion. They include
Nespresso, Smarties, Nesquik and Kit Kat.
4. Nestlé employees more than 300,000 people worldwide.
5. Nestlé is It’s the world’s largest food company in terms of revenues.
6. It’s Gone Through Many Name Changes. Earlier name were Condensed Milk Co. and Nestle Alimentana S.A.
7. Nestle sells their products in 196 world countries.
8. Good Food, Good Life : In 2016 Nestle celebrating their 150th anniversary of "Good Food, Good Life“.
9. While the employee strength is majorly present in Asia, Oceania, and Africa, the company has its most number of
factories in America with a total of 163 out of 442.
10. Although Nestle has products in almost all categories, the highest selling category is Powdered and Liquid Beverages and
Milk Products and Ice Creams come in second.
11. Nestle Has More Than 2,000 Brands
Interesting Facts !!!

11. Variety
Cooking
Aid
Nutrition
Health Comfort In
Between
Meals
Indulgence
TasteNESTLE
Product Portfolio

12. Market Position (Value)
• No. 1 in Baby Foods
• No. 2 in Infant Formula
• No. 1 in Dairy Whitener
• No. 1 in Sweetened
Condensed Milk
Innovation & Renovation
Milk Products & Nutrition

13. Market Position (Value)
• No. 1 in Instant Noodles
• No. 1 Sauces
• No. 1 Pasta
• No. 2 in Soups
Innovation & Renovation
Prepared Dishes & Cooking Aids

14. Market Position (Value)
• No. 1 in Wafers and Whites
Innovation & Renovation
Chocolate & Confectionery

15. Market Position (Value)
• No. 1 in Instant Coffee
• Strong presence in Vending
Innovation & Renovation
Beverages

16. Health Care
F & B
Beverages Dairy Confectionary Dishes
Cerelac Milo Everyday Kitkat Maggi
Coffee Nestle Nourish Munch Masala e magic
Nescafe Gold Milkmaid Alpino Pazzta
Nescafe Classic Barone
Nescafe Sunrise Milkybar
Nestea Eclairs
Polo
Product Line

17. Name Last Price Market Cap. Sales Net Profit Total Assets
(Rs. cr.) Turnover
Nestle 16,356.45 157,701.88 12,368.90 1,966.55 3,708.88
Britannia 3,096.65 74,464.61 10,482.45 1,122.20 4,039.71
GlaxoSmith Con 9,690.25 40,752.87 4,782.01 982.8 4,094.72
Jubilant Food 1,812.60 23,920.71 3,530.67 322.8 1,323.72
Hatsun Agro 659.6 10,664.34 4,760.30 114.85 1,541.29
Godrej Agrovet 520.75 10,000.58 4,286.41 207.88 1,499.58
Zydus Wellness 1,478.90 8,527.95 254.61 96.3 4,891.74
Future Consumer 21.6 4,149.60 2,989.96 60.53 2,066.22
Tasty Bite 11,485.85 2,947.27 336.93 30.06 163.82
Prataap Snacks 756.3 1,773.75 1,068.92 46.46 591.71
Heritage Foods 330.9 1,535.31 2,613.45 83.44 1,051.44
DFM Foods 274.55 1,375.73 483.62 32.76 216.48
Hindustan Foods 727.8 981.98 236.6 10.2 125.78
Parag Milk Food 102.7 863.86 2,346.13 114.05 1,034.10
Market Cap – Business Environment

18. Note: 1) Source A.C. Nielsen. 2) Excludes Amulspray 3) Internal Estimates
Infant Cereals 96.7
Infant Formula2 66.3
Tea Creamer 43.8
Instant Noodles 59.6
Ketchups & Sauces 19.8
Instant Pasta 76.2
White & Wafers 64.1
Instant Coffee 50.9
Condensed Milk >70.03
Category Brand Market Share (Value)¹ H1 2019
Product portfolio holding leading positions

19. 61
innovations
since 2016
A9nd the Innovation Journey Continues since 2016…
3.7%
Contribution
to Domestic
Sales in H1
2019

20. Seizing The Out of Home Opportunity
Where was Nestle
Traditional Hot
Beverages
Powder Based
Solutions
Limited Category
play - Coconut
Milk Powder &
Milkmaid
Where Is Nestle
Entry into
Premium
beverages with
Liquid Milk
DigitalPayment
based Vending
Leadership in
Cold Vending
Wider Portfolio

21. KIT KAT - Transformation

22. Moga (1961)
Pantnagar (2006)Ponda (1995) Bicholim (1997) Tahliwal (2012)
Samalkha (1992)Choladi (1967) Nanjangud (1989)
Instant Tea largely for exports
Manufacturing
Citadels

23. Make In India Continues ….
98% of what Nestle sells is
‘Made in India’
Our diversity
ambition –50%
women workforce
at the factory
Sanand, Gujarat
- our ‘navratna’
Construction to
commence soon
–a dedicated
MAGGI factory
State of the Art -
reinforcing our
sustainability
journey
Initial Investment
over two years
INR 700 Crore
Employment
Generation
around 400
people
Map not to scale

24. Touchpoints
100,000
dairy
farmers
2500 coffee
farmers
4600 suppliers and
1700 distributors
1200 spice
farmers

25. In a nutshell…
 The market momentum somewhat moderates.
 Largely sustained market leadership. KITKAT gains market share.
 Organic growth broad based across regions driven by strong real internal
growth aided by superior performance of premium products.
 KITKAT, MUNCH, NAN, MAGGI Noodles & Masala-ae-magic are
outperformers within our overall product portfolio.
 Operating margins impacted by headwinds in commodities and investments
in new products.
 Value creation model generates strong operating cash flows.
 Stepped up dividend per share over the years post the MAGGI issue.
 Return on equity to improve after the special interim dividend.
 Built back capital efficiency and economic profitability.

26. North
27
East
31
South
24
West
18
Growth%
H1’18 H1’19
North 7.9 12.2
East 9.4 11.3
South 3.9 11.4
West 6.9 11.8
Total 7.1 11.6
% Contribution to Domestic Sales
Balanced growth across regions

27. Domestic Sales: INR 56.6 Billion
Contribution (%) Products & Product Groups H1’19 Growth%
46.8 8.5
Milk Products & Nutrition
28.9 15.0
Prepared Dishes & Cooking Aids
13.9 22.5
Confectionery
10.4 4.2
Powdered & Liquid Beverages
Domestic Growth 11.6
Category wise domestic performance

28. 65.4 66.824.4 26.5
46.8%
Value (INR Bio)
8.5%
Volume (000’ Tons)
RIG
8.1%
OG and RIG
favourably
impacted by higher
sales of Surplus Fat
(+60 bps each)
H1’19Growth% H1’18
Key products performed well
Sustained performance of I&R : CEREGROW & NANGROW.
Organic Cereals launched
Milk products & nutrition - Domestic

29. 111.3 124.214.2 16.3
28.9%
Slide 13
Value (INR Bio) Volume (000’ Tons)
15.0% RIG
12.9%
H1’18 H1’19Growth%
Strong growth in MAGGI Noodles & Masala–ae–Magic
MAGGI Noodles surpass pre-crisis level of value & volume
Prepared dishes & cooking aids - Domestic

30. 19.5 24.06.4 7.9
Value (INR Bio) Volume (000’ Tons)
13.9%
Strong Growth aided by market momentum. Kitkat gains market share.
I&R : Kitkat Dessert Delight, Milkybar Moosha, limited editions yield good results
22.5%
RIG
22.8%
H1’18 H1’19Growth%
Confectionery - Domestic

31. No. of villages
Villages under direct
coverage
~ 600,000 52,000 +
1. Re Distributor Model
- 7000+ Redistributors
2. Whole sale Hub Model
- 2600+ Wholesale Hub’s
*Source : census 2011
Unlocking Rural Market : Reaching Rural customer

32. Source: Nielsen June 2019. Market Size in USD Bio for 2018 (1 USD = INR 68.4)
Infant Formula and Infant Cereal included. Water, Juices and Carbonated soft drinks excluded from the above data.
Channels excluded: E-commerce, CSD, OOH, institutional sales to hospitals, hotels.
11.4 10.6
16.2 15.7
13.4
10.0
12.5 11.7
17.4 17.0
14.7
11.6
11.4 10.8
17.2
16.0
13.8
10.1 8.7 8.3
15.2
13.6 13.5
10.5
Q1 Q2 Q3 Q4 Q1 Q2
FMCG (57.8 bio) F&B (32.8 bio) Processed Food* (18.7 bio) Nestlé Categories (5.4 bio)
Q1 Q2 Q3 Q4 Q1 Q2 2018
2019
Q1 Q2 Q3 Q4 Q1 Q2 2018
2019
Q1 Q2 Q3 Q4 Q1 Q2 2018
2019 2018 2019
2018 Market Size (USD)
YoY Market Growth%
CY’18: 13.5% CY’18: 14.7% CY’18: 13.9% CY’18: 11.5%
*Excluding commodities
Market momentum somewhat moderates

33. Total Comprehensive Income
14.7 14.7
7.9 8.8
EPS (INR)
INR +8.5
Growth +10.0%
85.0 93.5
RIG (%) OG (%)
9.9 10.8
7.3 /13.9
11.7
Net Profit
Margin +0 bps
15.1 15.1
8.2 9.0
H1’18
Profit from Operations
Margin -40 bps
22.1 21.7
11.9 13.0
Total Sales
Growth +10.2 %
54.2 59.7
H1’19% ofSales Amount in INR billion unless otherwise stated
a) RIG & OG % are based on Nestlé Internal Reporting Standards in relation to third party sales
b) Figures in maroon colour represents comparable numbers
Growth & Returns : Jan – June

34. 50.7 56.6 206.1 225.9
3.5 3.1 11.6 10.6
H1’18 H1’19
Value
(INR Billion)
Volume
(in ‘000 Tons)
-11.4%
11.6%
Domestic
Contribution:95%
Exports
Contribution:5%
Growth%
RIG
10.8%
Domestic & Export sales

35. 10.0 11.05.7 5.9
Volume (000’ Tons)
10.4%
Value (INR Bio)
4.2%
RIG
3.4%
H1’18 H1’19Growth%
Growth adversely impacted by lower sales of instant coffee to CSD (220 bps)
Nescafe RTD continues to grow strongly
Powdered & liquid beverages - Domestic

36. Reaching out to Rural customer

37. Thank You