Nestlé Investor Seminar Nestlé Purina PetCare Europe - John Harris

Transcription

1 Nestlé Investor Seminar Nestlé Purina PetCare Europe - John Harris 1 Nestlé Investor Seminar - Vevey June 8-9, 2005

2 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. 2 Nestlé Investor Seminar - Vevey June 8-9, 2005

3 NPPE recent performance headlines 3 Nestlé Investor Seminar - Vevey June 8-9, 2005

4 ONE/VB Bakers Felix single serve Dog Chow Gourmet Pro Plan Friskies dry cat ONE/VB Bakers Felix single serve Dog Chow Gourmet Pro Plan Friskies dry c a t We are delivering double digit growth on strategic focus brands (% increase in sales) 2003 vs vs ONE Bakers Felix single serve Dog Chow Gourmet ProPlan Friskies Dry Cat 0% 10% 20% 30% 40% 50% 60% 0% 10% 20% 30% 40% 50% 60% 4 Nestlé Investor Seminar - Vevey June 8-9, 2005

5 Sales % increase 2005 through April 2005 vs YTD ONE ONE/VB Bakers Bakers Felix single serve Felix single serve Dog Chow Dog Chow Gourmet Gourmet ProPlan Pro Plan Friskies Dry Cat Friskies dry cat 0% 10% 20% 30% 40% 50% 60% 5 Nestlé Investor Seminar - Vevey June 8-9, 2005

6 Amid private label expansion, NPPE is delivering better market share performance than the market leader Mars YTD Mar 05 Mars 42.4% 41.3% 40.1% 38.9% NPP Europe 24.7% 24.5% 24.5% 25.2% Private Label 21.2% 22.3% 23.5% 23.9% Source: AC Nielsen Grocery 18 markets 6 Nestlé Investor Seminar - Vevey June 8-9, 2005

7 We are pressuring Mars in Europe s two biggest markets UK and France UK Value Market Share 100% Total Cat & Dog incl. Snacks France Value Market Share 100% Total Cat & Dog incl. Snacks 50% 50% 45% 45% 40% 40% 35% 35% 30% 30% 25% 25% 20% MAT MAT MAT ON 02ON 03ON 04 FM 04 AM 04 JJ 04 AS 04 ON 04 DJ 05 FM 05 20% MAT MAT MAT ON 02ON 03ON 04 FM 04 AM 04 JJ 04 AS 04 ON 04 DJ 04 FM 05 Mars NPPE Mars NPPE Source: AC Nielsen Grocery 7 Nestlé Investor Seminar - Vevey June 8-9, 2005

8 We have seized leadership from P&G/Iams in premium dry cat food sold through grocery stores Value market share 14.0% Total Europe Dry Cat food 12.0% 10.0% 8.0% 6.0% Purina ONE Iams 4.0% 2.0% 0.0% MAT AN-2 MAT AN-1 MAT AN DJ04 FM04 AM04 8 Nestlé Investor Seminar - Vevey June 8-9, 2005 JJ04 AS04 ON04 Source: AC Nielsen Grocery DJ05 FM05

9 We are succeeding everywhere with Purina ONE dry cat food 30 Value market share of dry cat food Italy Holland Germany Portugal France UK Switzerland 0 MAT AN-2 MAT AN-1 MAT AN DJ 04 FM 04 AM 04 9 Nestlé Investor Seminar - Vevey June 8-9, 2005 JJ 04 AS04 ON04 DJ04 FM05 Note: Vital Balance in France & part of Switzerland Source: AC Nielsen Grocery

10 We have launched Beneful dry dog food in Holland with encouraging initial results 7.0% TV Campaign Valueshare Dry Dog (%) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% Beneful Value share 5.5% 0.0% Wk 38 Wk 36 Wk 42 Wk 40 Wk 46 WK 44 Wk 50 Wk 48 Wk 1 Wk 52 Wk 3 Wk 5 Wk 7 Wk 9 Wk 11 Aided awareness of Beneful improved drastically to 25% amongst total population, amongst IN s it increased to 40% 10 Nestlé Investor Seminar - Vevey June 8-9, 2005

11 9 Factory disposals since 2001 Factory Project Date of disposal or date of impact Cornard (UK) Closure 2002 Hetton (UK) Closure 2002 Southall (UK) Closure 2002 Northwich (UK) Closure 2002 Veghel (NL) Closure 2003 Guingamp (Fr) Sale of factory 2003 Leuth (Ger) Sale of factory 2003 Barrhead (UK) Closure 2004 Worksop (UK) Closure Nestlé Investor Seminar - Vevey June 8-9, 2005

12 NPPE Profit % (indexed to 2001 = 100) Supply Chain savings Volume/Mix Overhead reduction objective 12 Nestlé Investor Seminar - Vevey June 8-9, 2005

13 The European Pet Care Market 13 Nestlé Investor Seminar - Vevey June 8-9, 2005

14 European cat and dog food market vs. other regions Cat and dog food 2004 retail sales All channels and markets Sales '000 CHF North America Europe AOA Latin America Source: Euromonitor Feb Nestlé Investor Seminar - Vevey June 8-9, 2005

15 European cat and dog food market vs. other Nestlé categories in Europe European 2004 category sales Grocery only, Western Europe (7 countries) 16,000 14,000 12,000 13,978 12,575 Value sales m 10,000 8,000 6,000 4,000 2,000 5,572 4,517 3,710 3,015 2,761 2, Chilled Dairy Chocolate Pet food Frozen food Ice cream Infant N utrition Chilled culinary Soluble coffee Milk modifie r Source: AC Nielsen Grocery 15 Nestlé Investor Seminar - Vevey June 8-9, 2005

16 Europe has more cats and dogs than North America Europe North America Cats 86.3 million 85.3 million Dogs 77.2 million 65.9 million 16 Nestlé Investor Seminar - Vevey June 8-9, 2005

17 Opportunities to increase commercial pet food usage in Europe are substantial 80% 70% 60% Commercial food penetration 50% 40% 80% 50% 30% 20% 32% 10% 0% 5% USA Western Europe Southern Europe Central/Eastern Europe Source: Euromonitor estimates 17 Nestlé Investor Seminar - Vevey June 8-9, 2005

18 Industrial food coverage continues to grow even in developed markets UK - Industrial food coverage France - Industrial food coverage 80% 70% 70% 60% 61.0% 64.5% 69.0% 70.5% 60% 50% 59.3% 51.4% 60.0% 52.0% 60.2% 52.5% 61.0% 53.2% 50% 44.0% 45.0% 47.5% 51.0% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Cat Dog Source: Euromonitor, Feb Nestlé Investor Seminar - Vevey June 8-9, 2005 Cat Dog

19 and can increase rapidly in emerging markets Russia - Industrial food coverage 10% 40% Czech Republic - Industrial food coverage 9% 8% 7% 7.0% 8.1% 8.9% 35% 30% 26.0% 29.0% 33.0% 38.0% 6% 6.0% 25% 5% 20% 4% 3% 2.5% 3.0% 3.5% 4.0% 15% 10% 11.5% 12.5% 13.5% 15.0% 2% 1% 5% 0% % Cat Dog Cat Dog Source: Euromonitor, Feb Nestlé Investor Seminar - Vevey June 8-9, 2005

20 The European cat and dog food market profile is evolving in two important respects Dry food is growing faster than wet food Superpremium food is growing faster than non-superpremium food 120 Value sales index to Oct/Nov % Value sales % change vs. YAG % % ON01 FM02 JJ02 ON02 FM03 JJ03 Wet ON03 Dry FM04 JJ04 ON04 FM05 Source: AC Nielsen Grocery 18 markets 20 Nestlé Investor Seminar - Vevey June 8-9, % 0.0% -5.0% ON01 FM02 JJ02 ON02 FM03 Superpremium JJ03 ON03 Non Superpremium FM04 JJ04 ON04 FM05

21 NPPE portfolio well positioned for future growth 100% 90% 80% 70% 60% 50% Snacks Multiserve wet Premium added value 40% 30% 20% 10% 0% * 2006* 2007* 2008* Premium value added Multiserve wet cat + wet dog Snacks & Accessories *Estimates 21 Nestlé Investor Seminar - Vevey June 8-9, 2005

22 The shift from wet to dry food is global 3000 EUR 1200 AOA Tons Tons AMERICAS Tons D ry W e t Source: Euromonitor, Nielsen Grocery 22 Nestlé Investor Seminar - Vevey June 8-9, 2005

23 Our objectives and strategies 23 Nestlé Investor Seminar - Vevey June 8-9, 2005

24 Our objectives 1. To strengthen our number two overall position to Mars 2. To build upon or establish leading positions where it matters most In dry food In premium food 3. To improve our operating margins to the average of Nestlé Europe 24 Nestlé Investor Seminar - Vevey June 8-9, 2005

25 Our strategies 1. Leverage Nestlé Purina know-how to deliver superior performing dog and cat foods More pleasing to pets More appealing to pet owners Healthier, for better and longer lives 2. Commercialise this performance via strong range brands targeted to unique consumer segments Pro Plan Gourmet ONE Felix Beneful Friskies Bakers 3. Serve priority consumers where they shop, and adapt selling approaches to key sales channels 4. Build trust in the entire range via the Purina corporate brand 25 Nestlé Investor Seminar - Vevey June 8-9, 2005

26 Our know how in pleasing pets is world class 26 Nestlé Investor Seminar - Vevey June 8-9, 2005

27 And the results show Food consumption ratios 100% Sheba 75% 50% Gourmet Perle 25% 0% C hicken Lamb T una Royal Canin Adult 100% 75% Pedigree Pro Plan dry dog food 50% 25% Beneful 0 Test 1 Test 2 Test 3 0% Oct-04 Nov-04 Dec Nestlé Investor Seminar - Vevey June 8-9, 2005

28 Pet owner food appeal strongly influences brand choice, and NPPE is leading the way 28 Nestlé Investor Seminar - Vevey June 8-9, 2005

29 NPPE is helping pets live longer, healthier lives. and we ve proved it 29 Nestlé Investor Seminar - Vevey June 8-9, 2005

30 The success of Gourmet wet cat food 450, , , % +15.5% 300,000 Sales (CHF '000) 250, , , ,000 50, Source: AC Nielsen Grocery 30 Nestlé Investor Seminar - Vevey June 8-9, 2005

31 Gourmet Diamante and Etoile: stretching the potential for premium pricing Average price / 85g can Italy Price Average Gourmet Gold Average Gourmet Diamante/Etoile Source: AC Nielsen, internal auditing 31 Nestlé Investor Seminar - Vevey June 8-9, 2005

32 Gourmet Etoile: encouraging launch results 6.0% Value share of Wet Cat food single serve, Italy 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 15/02/ /03/ /03/ /04/ /05/ /05/ /06/ /07/ /08/2004 Source: AC Nielsen 22/08/ /09/ /10/ /10/ /11/ /12/ /12/ /01/ /02/ /02/ /03/ Nestlé Investor Seminar - Vevey June 8-9, 2005

33 Felix As Good As It Looks : encouraging launch results in the UK 9.0% Value share of Wet Cat food single serve 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 07/08/ /08/ /09/ /09/ /10/ /10/ /10/ /11/ /11/ /12/ /12/ /01/ /01/ /02/ /02/ /03/ /03/ /04/ /04/2005 Source: AC Nielsen UK 33 Nestlé Investor Seminar - Vevey June 8-9, 2005

34 We serve three unique sales channels Grocery Specialist Discount <To be added> Hypermarkets Supermarkets Small grocery/convenience stores Pet shops Garden Centres Agri-stores Veterinary clinics Hard discount Soft discount 34 Nestlé Investor Seminar - Vevey June 8-9, 2005

35 Our selling approach varies based on channel dynamics Veterinary clinics High Degree of in-store information and support Pet shops Pet Superstores Proposed assortment Narrow Hypermarkets Broad Supermarkets Discount stores Low 35 Nestlé Investor Seminar - Vevey June 8-9, 2005

36 Each channel serves a specific role for NPPE Grocery Specialist Discount <To be added> Access to a broad shopper base for the majority of our brands and products Information and personal selling for more specialised and sophisticated products and ranges Access to convenience and cost-minded shoppers for our most popular products 36 Nestlé Investor Seminar - Vevey June 8-9, 2005

37 To consumers, Purina is the company behind everything we do Product endorsement Print tag ` ` Consumer relationship panel ` TV tag ` ` Events & sponsorship ` Websites 37 Nestlé Investor Seminar - Vevey June 8-9, 2005

38 NPPE upcoming innovations 38 Nestlé Investor Seminar - Vevey June 8-9, 2005

39 Beneful Healthy Weight Indulgent Nutritionists dogs tend to be overweight because of their indulgent behaviour Beneful Healthy Weight offers: Perfect balance of healthful ingredients Calorie smart nutrition Excellent taste Healthy Weight will increase penetration and shelf space for the brand March 05 on shelf in Europe 39 Nestlé Investor Seminar - Vevey June 8-9, 2005

40 New snacks & treats Dental Fresh Proven to reduce tartar build-up by 45%. Helps to freshen breath. Ideal for daily usage Funtastix Tasty meaty treat with ham and cheese flavour Megabone Chewy, long-lasting treat with a meaty filling - Superior palatability to competitors - Low in fat - Unique shape 40 Nestlé Investor Seminar - Vevey June 8-9, 2005

41 Pro Plan Dog: Sensitive range launch July 05 Consumer insight / opportunity Allergies are a top health concern for Expert Driven Providers Sensitive category already represents 12% of super premium dog sales Leverage Nestle R&D knowledge The first pet specialty product with restricted protein source to reduce risk of allergic reaction 41 Nestlé Investor Seminar - Vevey June 8-9, 2005

42 ONE cat: Sensitive formula March 05 For sensitive digestion & palate Superior digestibility (>90%) Optimal faecal consistency Higher palatability than adult Unique product within the channel With TURKEY 42 Nestlé Investor Seminar - Vevey June 8-9, 2005

43 Friskies dry dog food with fresh meaty chunks New: with chunks made with fresh meat Consumers associate freshness with high quality Significant increase in palatability 43 Nestlé Investor Seminar - Vevey June 8-9, 2005

44 Summary Pet care in Europe a large category with good growth potential Consumer purchase and feeding behaviour evolving in our favour NPPE closing the market share gap to Mars while improving operating margin Strong innovation track record and pipeline Clear potential for continued profit improvement 44 Nestlé Investor Seminar - Vevey June 8-9, 2005

45 Nestlé Investor Seminar Nestlé Purina PetCare Europe - John Harris 45 Nestlé Investor Seminar - Vevey June 8-9, 2005