Returning to growth in the USA Steve Presley, Chairman & CEO, Nestlé in the USA 1 1 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Disclaimer This 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. This presentation contains certain financial performance measures which are not defined by IFRS. Management believes that these non-IFRS measures provide additional useful information to assess the financial and operational performance of the Group. Such measures may not be comparable to similar measures presented by other companies and are explained and/or reconciled with our IFRS measures (Consolidated Financial Stat ements) in the Nestlé Group Alternative Performance Measures (APMs) document available on our Investor Website. 2017 figures have been restated to reflect: • The implementation of IFRS 15 - Revenue from contract with customers, IFRS 16 - Leases and IFRIC 23 - Uncertainty over income tax treatments as well as other accounting policies and presentation changes; and • The change in organization of infant nutrition business. Effective January 1, 2018 Nestlé Nutrition is reported in the Zones as a regionally managed business, with Gerber Life Insurance business reported in Other Businesses. 2 2 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Revived growth in the USA Underlying Trading Organic Operating Profit Growth 2.6% 0.2% 2017 2018 $28 bn Total USA sales 30% of Global sales 3 3 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Broad-based growth across strategic categories Repositioning Accelerating growth platforms for growth Coffee Frozen Meals Waters Health Science 4 4 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Fundamental shifts in consumer behavior Fluid and exploratory How we eat Traditional Omnichannel CPG model is savvy and quickly informed How we shop evolving Personalized, digital 1 st engagement How we engage 5 5 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Three priorities to win Growth Capabilities People & Culture 6 6 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Fueling our hybrid growth model Reimagine the 1 base business Transform our 2 portfolio Pursue new 3 innovation models 7 7 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Fundamentals as a growth driver CONSUMER RELEVANCE both iconic and emerging brands must be on trend EXECUTE enhance Marketing & Sales fundamentals INVEST opportunity-based resourcing to maximize ROI INNOVATE faster, agile, and more effective 8 8 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Naturalization and science-based innovation Making natural accessible to all Elevating life-changing nutrition 9 9 9 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
#1 in health food channel in e-commerce supplements Gaining mainstream channel distribution Empowering extraordinary health 10 10 10 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Expanding Well- premium in positioned sparkling in premium still water Delighting consumers through taste Premiumizing to win in high growth segments 11 11 11 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Right Price Right Product Right Communication Relentlessly renovating legacy brands 12 12 12 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Contemporizing with natural, organic, and fresh offerings Reinventing a Spokesbaby that beloved icon reflects our values 13 13 13 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Elevated consumer experiences 14 14 14 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
TRADITIONAL EMERGING DIRECT TO Pure Play, Click & Collect, Bricks-to-Clicks Concierge, Same Day CONSUMER Delivery Win the Win omni Personalize and digital shelf shopping early drive loyalty E-commerce eContent Reviews Setting the direction eSearch Assortment 9% of total sales 15 15 15 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Build new business models Personalization Provide services Tailoring to individual Anticipate consumer needs consumer Communication customized to machine needs and purchasing behavior 16 16 16 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Fueling our hybrid growth model 1 Reimagine the 1 base business 2 Transform our 2 portfolio Pursue new 3 innovation models 17 17 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Transform our portfolio Divesting Acquiring 6% 12% businesses with leverageable low ability to win growth platforms Acquired brands growing double-digit 1 (1) Aggregated full calendar year sales growth versus 2017 18 18 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Starbucks Alliance creates a powerhouse US Coffee #1 company 19 19 19 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Starbucks Alliance unlocks significant opportunities Consumer brand continuum Channel development Portfolio growth Retail : Signature Aisle Omnichannel Out of Home : Premium On- The-Go Experience 20 20 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Fueling our hybrid growth model Reimagine the 1 base business Transform our 2 portfolio Pursue new 3 innovation models 21 21 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Pursue new innovation models INTERNAL OPEN CROWD- INNOVATION SOURCING INCUBATOR Use lean development model to Support and coach startups with Harness the collective intelligence of launch on-point products innovative ideas our employees Leveraging incubation to Assessing & engaging 5 new products enter new growth spaces with startups launching soon 22 22 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Three priorities to win Growth Capabilities People & Culture 23 23 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
Organizational redesign Portfolio management Continuously driving the Lean supply Virtuous chain Circle Revenue > $600 m management savings 2016-2020 Shared service optimization 24 24 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
DRIVING GROWTH ABOVE INDUSTRY AVERAGE Revived US Driving the Powerful Talent & Mindset of growth, hybrid growth Capabilities Perform & contributing to growth platforms to as growth Transform & 2020 targets model leverage drivers Experiment Consumer obsessed and customer focused 25 25 | February 22, 2019 | CAGNY | February 22, 2019 | CAGNY
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