Title: Nestlé Equatorial African Region an overview. Name: Pierre Trouilhat. Date: 28th January 2011

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2 Title: Nestlé Equatorial African Region an overview Name: Pierre Trouilhat Date: 28th January 2011

3 My Background 1. Pierre Trouilhat, married to Pascale and father of 2 children 2. Graduated from EMLyon with a Masters in Business in Joined Nestlé in France in Worked in Switzerland, Togo, Algeria, Guinea, Syria, Iran before being tasked with the creation of the Equatorial African Region in 2008 To update photo 5. One employer for 31 years: Nestlé

4 The Nestlé Group 1. The World s Largest Nutrition, Health and Wellness Company 2. Sales over CHF 109 billion in Market Capitalization of USD 175 bio ,000 employees worldwide 5. 10,000 products worldwide bio products sold daily 7. CHF 2 bio invested in R&D every year people in R&D factories in 81 countries

5 The Nestlé Group

6 Nestlé in Africa 1. Nestlé commercially present in Africa since 1880s 2. First factory in South Africa in Today, 28 factories and 4 more under construction. One R&D Centre in Abidjan, Ivory Coast employees. To update 4. USD 850 mio investment the last 5 years and USD 1 billion in the next 2 years 5. Africa divided into 5 different regions 1. North Africa 2. Central & West Africa 3. North Eastern Africa 4. South African Region 5. Equatorial Africa

7 Nestlé s strategy in Equatorial Africa Our Ambition: To be recognized in Equatorial Africa as a highly respected and trusted Nutrition, Health and Wellness company Our Objective: To provide affordable nutrition to our emerging consumers through our NHW and PPP strategies Our Must Win Battles: 1. Industrialization: Invest in Finishing Factories to reduce dependence on imports, to have flexibility on formats and labels, and to ensure improved product availability at the most optimal cost 2. Route-To-Warehouse: Deliver the right products at the most efficient cost: either from inside/outside region, relying on the most efficient regulatory scheme (trade agreements) and delivery corridors 3. Route-To-Market: Structuring Channel Management and fostering sales through Distributor Management Best Practice supported by strong Brand Activation 4. Accelerating Through PILLAR Brands based on Consumer Insight: PPP growth drive through brand activation 5. Performance Culture and People s Plan: Induct, develop and retain regional talent

8 Nestlé in Equatorial Africa Total Population: million Operating Companies in 7 countries Representative Offices: 4 countries 900 employees 3 factories Headquart ers Nairobi 10 Distribution Centers CHF 150 mio investment package announced in 2010

9 Our investment plans Upgrade of Existing Factories In Nairobi and Harare Kingabua Factory in DRCongo 2 more factories in Angola and Mozambique New product portfolio based on PPP & Nutrition Strategies New distribution model to ensure adequate product coverage in the region Increase in local raw material sourcing. Strategy was to move from 75% imports in 2008 to 75% local production by 2016 Headquart ers Nairobi

10 Challenges 1. In many countries, unstable political and economic environment 2. Inefficiencies in infrastructure, logistics, legislation and governance 3. High cost of doing business 4. No feeling of national interest 5. Distribution and Route-to-Market 6. Limited talent pool

11 Why is Nestlé investing in Equatorial Africa LIMITLESS OPPORTUNITIES 1. Strong Economic Growth in most EAR countries 2. Demographics: Population Growth and Age 3. Rising Income 4. Highly aspirational emerging class, more conscious about nutrition 5. Food and Beverage will account for more than 50% of their expenditure 6. As we move up the social ladder, increasing demand for packaged foods and convenience products

12 Why is Nestlé investing in Equatorial Africa >$500 p. mth 3% 12 Mio >$200 p. mth >$50 p. mth Total Population 400+ mio 12% 48 Mio 46% 184 Mio Human Poverty Line 39% 156 Mio <$38 p. mth A/B C1 C2 D E Global Africa Rising Africa 13% 10 Mio Emerging Africa To update Urban Population 106 mio 19% 15 Mio Deprived Africa 50% 40 Mio Human Poverty Line 18% 14 Mio Sources: CIA World Fact book (2008), UNDP Human Development Report (2006), Research International Pan African LSM study ( ), US Census Bureau, International Database (2007)

13 Our Values: Creating Shared Value CSV is a way of life at Nestlé: In whatever we do, we must bring value to both our shareholders and society at the same time.

14 Creating Shared Value Some of our key projects in EAR: RURAL DEVELOPMENT East Africa Dairy Development Project: Kenya Coffee SAIN Projects: Uganda, Tanzania, soon in Kenya and in Ethiopia Nestlé Dairy Empowerment Scheme: Zimbabwe Community Development: Mozambique NUTRITION Nestlé Healthy Kids Program: Mauritius, Kenya, Zimbabwe, Mozambique, DRC WATER Nutrition and Fortification Awareness Campaigns: Mauritius and Mozambique Water & Environmental Sustainability: Kenya Water to Rural Dairy Communities : Kenya

15 Our Values 1. Our people: The Management and Leadership Principles 2. Our people: The Code of Business Conduct 3. Our Partners: The Corporate Business Principles 4. Our Supply-Chain: The Commitment to Responsible Sourcing 5. Our Ethics: Responsible advertising to children 6. Many other policies that dictate our way of doing business

16 Key Messages for today 1. This is a business venture that represents immense business opportunities 2. The time to invest in Africa is NOW 3. We must think long term 4. We must have the right strategy, systems and resources to operate 5. We must operate with the highest ethical standards 6. We must create shared value and be a good corporate citizen in the countries in which we operate 7. We must be patient

17 Thank You