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NIS 2011 competitive gaps through manufacturing José Lopez
1. Creating
Competitive
Gaps Through
Manufacturing
Mr. José Lopez
Executive VP,
Operations & GLOBE
These slides differ to those shown at
the Nestlé Investor Seminar 2011
June 7, 2011 Nestlé Investor Seminar
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.
1 June 7, 2011 Nestlé Investor Seminar
4. We are coming from a long-term commitment
to Operational Excellence…
Performance
Operation
EXCELLENCE
2007
Target 2004+
MH'97 Performance Improvement is
part of our DNA and sustains on-going
CI savings to support business growth
Average annual savings of CHF 1 Bn over 10 years
1997 2001 2005 2008 Time
3 June 7, 2011 Nestlé Investor Seminar
5. Increasing Production Volume with fewer
Factories
123
113 117
481 480
108
456
100 449
443
2006 2007 2008 2009 2010
#Number of factories
of factories Index production volume per factory
Index of production volume
4 June 7, 2011 Nestlé Investor Seminar
6. Achieving Efficiency throughout the whole
Value Chain
Case Fill Rate FreshNes Bad Goods
Index Index [a] Index
106 100
105
79
100 100
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010
[a] FreshNes Index calculated as FreshNes at Shipment (% of Remaining Shelf Life) multiplied by
Case Fill Rate.
5 June 7, 2011 Nestlé Investor Seminar
7. Improving trend in Finished Goods and Raw
& Packaging stock
Stock Value
Index
100
96
88
2008 2009 2010
6 June 7, 2011 Nestlé Investor Seminar
8. Contributing to positive trend in Working
Capital
TNWC
Index
100
78
2006 2007 2008 2009 2010
7 June 7, 2011 Nestlé Investor Seminar
9. Strong Performance on the major Environment
Indicators over the last 10 years…
Production Volume: + 73%
(absolute change) -32%
Water
(m3/ton) (per tonne of product) -61%
(absolute change) -3%
Energy
(gigajoules/ton) (per tonne of product) -44%
Green House (absolute change) -16%
Gas (per tonne of product) -51%
(kg CO2/ton)
8 June 7, 2011 Nestlé Investor Seminar
10. …Whilst driving Excellence in Safety
Lost time injuries [a]
5
4.8
4
3.7
-63%
3
2.8
2
2.0
1.8
1
0
2006 2007 2008 2009 2010
[a] per million of hours worked
9 June 7, 2011 Nestlé Investor Seminar
12. A unique and unmatched spread of Factories
around the World
Europe
150
(Sales 34%)
Americas
168
(Sales 45%)
Asia, Oceania, Africa
125
(Sales 21%)
443 Factories
81 Markets
> 150,000 Employees
11 June 7, 2011 Nestlé Investor Seminar
13. Our Manufacturing Footprint…
Araras – Brazil Feira de Santana – Brazil
World’s largest Soluble Coffee exporting Tailored to fit regional needs and boost
Factory economy
…One Strategy does not fit all !
12 June 7, 2011 Nestlé Investor Seminar
14. Brazil – World’s Biggest Soluble Coffee Plant
Araras Leveraging economies of scale and
expertise whilst increasing flexibility
of supply
Production: 237,000 T
13 June 7, 2011 Nestlé Investor Seminar
15. Switzerland – World’s Biggest Center of Coffee
Excellence
Nespresso – Avenches Leveraging economies of scale and
expertise to deliver exclusivity
and differentiation
Production Capacity: 8.8 Bn Capsules
(incl. extension to 2012)
14 June 7, 2011 Nestlé Investor Seminar
16. North America – World’s Biggest Water Plant
Hollis Maine
Leveraging economies of scale to
market the uniqueness of the source
Production Capacity: 4.1 Bn Bottles
15 June 7, 2011 Nestlé Investor Seminar
17. China – World’s Biggest Culinary Factory
Newly launched product
Totole’s best selling
product
Totole, Shanghai
Leveraging economies of scale whilst
being local for local
Production Capacity: 206,000 T
(incl. extension to 2015)
16 June 7, 2011 Nestlé Investor Seminar
18. Producing closer to our Consumers and
localising Opportunity
Feira de Santana
Feira de Santana, Brazil Leveraging economies of scale
PPP Factory whilst servicing one consumer
at a time
Production Capacity: 92,500 T
17 June 7, 2011 Nestlé Investor Seminar
21. Summary
Nestlé has delivered significant improvements in operational
efficiency over many years
Our Manufacturing Strategy follows what best serves our
Consumer and Customer needs
Nestlé Continuous Excellence (NCE) is accelerating efficiency
improvements
And we expect to deliver this for many years to come…
20 June 7, 2011 Nestlé Investor Seminar