Nestlé Investor Seminar Nestlé Purina PetCare Europe - John Harris · 2019-07-14 · The European...

1 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005

Nestlé Investor SeminarNestlé Purina PetCare Europe - John Harris


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.

Disclaimer


NPPE recent performance headlines


We are delivering double digit growth on strategic focus brands (% increase in sales)

0% 10% 20% 30% 40% 50% 60%

Friskies dry c a t

P ro P l a n

Gourme t

D o g C h o w

Felix single serve

B a k e r s

ONE/VB

2003 vs. 2002

ONE

Bakers

Felix single serve

Dog Chow

Gourmet

ProPlan

Friskies Dry Cat

0% 10% 20% 30% 40% 50% 60%

Friskies dry c a t

P ro P l a n

Gourmet

D o g C h o w

Felix single serve

B a k e r s

ONE/VB

2004 vs. 2003


Sales % increase 2005 through April

0% 10% 20% 30% 40% 50% 60%

Friskies dry c a t

Pro Plan

Gourmet

Dog Chow

Felix single serve

Bakers

ONE/VB

2005 vs. 2004 YTDONE

Bakers

Felix single serve

Dog Chow

Gourmet

ProPlan

Friskies Dry Cat


YTD2002 2003 2004 Mar ‘05

42.4% 41.3% 40.1% 38.9%

24.7% 24.5% 24.5% 25.2%

21.2% 22.3% 23.5% 23.9%

Amid private label expansion, NPPE is delivering better market share performance than the market leader Mars

Mars

NPP Europe

Private Label

Source: AC Nielsen Grocery – 18 markets


We are pressuring Mars in Europe’s two biggest markets –UK and France

20%

25%

30%

35%

40%

45%

50%

MATON 02

MATON 03

MATON 04

FM 04 AM04

JJ 04 AS 04ON 04DJ 05 FM 05

Mars NPPE

20%

25%

30%

35%

40%

45%

50%

MATON 02

MATON 03

MATON 04

FM 04 AM04

JJ 04 AS 04ON 04DJ 04 FM 05

Mars NPPE

UK – Value Market Share100% Total Cat & Dog incl. Snacks

France – Value Market Share100% Total Cat & Dog incl. Snacks

Source: AC Nielsen Grocery


We have seized leadership from P&G/Iams in premium dry cat food sold through grocery stores

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

MAT AN-2

MAT AN-1

MAT AN

DJ04

FM04AM04

JJ04

AS04ON04

DJ05

FM05

Purina ONEIams

Value market share

Total Europe Dry Cat food



We are succeeding everywhere with Purina ONE dry cat food

0

5

10

15

20

25

30

MAT AN-2

MAT AN-1

MAT AN

DJ 04

FM 04AM 04 JJ

04AS04

ON04DJ0

4FM05

Val

ue m

arke

t sha

re o

f dry

cat

food

ItalyHollandGermanyPortugalFranceUKSwitzerland

Note: Vital Balance in France & part of SwitzerlandSource: AC Nielsen Grocery


We have launched Beneful dry dog food in Holland with encouraging initial results

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Wk 36

Wk 38

Wk 40

Wk 42

WK 44

Wk 46

Wk 48

Wk 50

Wk 52

Wk 1

Wk 3

Wk 5

Wk 7

Wk 9

Wk 11

Valu

esha

re D

ry D

og (%

)

Beneful Value share

5.5%

• Aided awareness of Beneful improved drastically to 25% amongst total population, amongst IN’s it increased to 40%

TV Campaign


9 Factory disposals since 2001

Factory Project Date of disposal ordate of impact

Cornard (UK) Closure 2002Hetton (UK) Closure 2002Southall (UK) Closure 2002Northwich (UK) Closure 2002

Veghel (NL) Closure 2003Guingamp (Fr) Sale of factory 2003Leuth (Ger) Sale of factory 2003

Barrhead (UK) Closure 2004

Worksop (UK) Closure 2005


NPPE Profit % (indexed to 2001 = 100)

50

60

70

80

90

100

110

120

130

140

150

160

170

2001 2002 2004 2007 objective

100

170

149

Supply Chain savingsVolume/MixOverhead reduction

140


The European Pet Care Market


European cat and dog food market vs. other regions

3.6

7.4

18.717.4

0

2

4

6

8

10

12

14

16

18

20

North America Europe AOA Latin America

Sal

es '0

00 C

HFCat and dog food 2004 retail sales

All channels and markets

Source: Euromonitor Feb 2005


European cat and dog food market vs. other Nestlé categories in Europe


720

2,1652,7613,015

3,7104,517

5,572

12,575

13,978

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Chilled D

airy

Chocolate

Pet food

Froze

n food

Ice cr

eam

Infant N

utrition

Chilled c

ulinary

Soluble coff

ee

Milk m

odifier

Val

ue s

ales

€m

European 2004 category salesGrocery only, Western Europe (7 countries)


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


Opportunities to increase commercial pet food usage in Europe are substantial

80%

50%

32%

5%0%

10%

20%

30%

40%

50%

60%

70%

80%

USA Western Europe Southern Europe Central/EasternEurope

Commercial food

penetration

Source: Euromonitor estimates


Industrial food coverage continues to grow even in developed markets…

UK - Industrial food coverage

70.5%69.0%64.5%

61.0%

51.0%47.5%45.0%44.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2001 2002 2003 2004

Cat Dog

France - Industrial food coverage

61.0%60.2%60.0%59.3%

53.2%52.5%52.0%51.4%

0%

10%

20%

30%

40%

50%

60%

70%

2001 2002 2003 2004

Cat Dog

Source: Euromonitor, Feb 2005


…and can increase rapidly in emerging markets

Russia - Industrial food coverage

8.9%

8.1%

7.0%

6.0%

4.0%3.5%

3.0%2.5%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2001 2002 2003 2004

Cat Dog

15.0%

38.0%

13.5%12.5%11.5%

33.0%

29.0%

26.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2001 2002 2003 2004

Cat Dog

Source: Euromonitor, Feb 2005

Czech Republic - Industrial food coverage


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

90

95

100

105

110

115

120

ON01FM02 JJ

02ON02

FM03 JJ03

ON03FM

04 JJ04

ON04FM

05

Wet Dry

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

ON01FM02 JJ

02ON02

FM03 JJ03

ON03FM

04 JJ04

ON04FM

05

Superpremium Non Superpremium

Value sales index toOct/Nov ‘01

Value sales % change vs. YAG

Source: AC Nielsen Grocery – 18 markets


NPPE portfolio well positioned for future growth

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005* 2006* 2007* 2008*

Premium value added Multiserve wet cat + wet dog Snacks & Accessories

SnacksMultiserve wet

Premium added value

*Estimates


The shift from wet to dry food is global

Source: Euromonitor, Nielsen Grocery

0

200

400

600

800

1000

1200

1998 1999 2000 2001 2002 2003

Tons

000

0

1 0 0 0

2 0 0 0

3 0 0 0

4 0 0 0

5 0 0 0

6 0 0 0

7 0 0 0

8 0 0 0

1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3

Tons

000 D ry

W e t

AMERICAS

0

500

1000

1500

2000

2500

3000

1995 1996 1997 1998 1999 2000 2001 2002 2003

Tons

000

EUR AOA


Our objectives and strategies


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


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


Our know how in pleasing pets is world class


And the results show …

7573

76

2725 24

0%

25%

50%

75%

100%

Chicken Lam b T una

7684 83

2416 17

0

20

40

60

80

100 Royal Canin Adult

Pro Plan dry dog

food

7972 72

2828

21

0%

25%

50%

75%

100%

Oct-04 Nov-04 Dec-04

Pedigree

Beneful

Sheba

Gourmet Perle

Food consumption ratios

Test 1 Test 2 Test 3


Pet owner food appeal strongly influences brand choice, and NPPE is leading the way


NPPE is helping pets live longer, healthier lives …. and we’ve proved it


The success of Gourmet wet cat food

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2002 2003 2004

Sal

es (C

HF

'000

)

+9.7%

+15.5%



Gourmet Diamante and Etoile: stretching the potential for premium pricing

0.54

0.98

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Pric

e €

Average Gourmet Gold Average Gourmet Diamante/Etoile

Source: AC Nielsen, internal auditing

Average price / 85g can – Italy


Gourmet Etoile: encouraging launch results

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

15/02

/2004

07/03

/2004

28/03

/2004

18/04/2

004

09/05

/2004

30/05

/2004

20/06

/2004

11/07

/2004

01/08

/2004

22/08

/2004

12/09

/2004

03/10

/2004

24/10

/2004

14/11/2

004

05/12

/2004

26/12

/2004

16/01

/2005

06/02

/2005

27/02

/2005

20/03

/2005

Source: AC Nielsen

Value share of Wet Cat food – single serve, Italy


Felix “As Good As It Looks”: encouraging launch results in the UK

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%07

/08/

2004

21/0

8/20

04

04/0

9/20

04

18/0

9/20

04

02/1

0/20

04

16/1

0/20

04

30/1

0/20

04

13/1

1/20

04

27/1

1/20

04

11/1

2/20

04

25/1

2/20

04

08/0

1/20

05

22/0

1/20

05

05/0

2/20

05

19/0

2/20

05

05/0

3/20

05

19/0

3/20

05

02/0

4/20

05

16/0

4/20

05

Value share of Wet Cat food – single serve

Source: AC Nielsen UK


We serve three unique sales channels

Grocery Specialist Discount

• Hypermarkets

• Supermarkets

• Small grocery/convenience stores

• Pet shops

• Garden Centres

• Agri-stores

• Veterinary clinics

• Hard discount

• Soft discount

<To be added>


Our selling approach varies based on channel dynamics

Narrow Broad

Low

High

Discount stores

Supermarkets

Veterinary clinics

Pet shops

Hypermarkets

Degree of in-store information and support

Proposedassortment

Pet Superstores


Each channel serves a specific role for NPPE

Grocery Specialist Discount

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

<To be added>


To consumers, Purina is the company behind everything we do

`

`

`

`

`

`

Product endorsement

Print tag

Consumer relationship panel

Events & sponsorship

Websites

TV tag


NPPE upcoming innovations


Beneful Healthy Weight

March ’05 on shelf in Europe

• 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


New snacks & treats

Dental Fresh– Proven to reduce tartar

build-up by 45%.– Helps to freshen breath. – Ideal for daily usage

MegaboneChewy, long-lasting treat with a meaty filling

FuntastixTasty meaty treat with ham and cheese flavour

- Superior palatability to competitors

- Low in fat- Unique shape


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 withrestricted protein source to reduce riskof allergic reaction


ONE cat: Sensitive formula – March 05

• For sensitive digestion & palate• Superior digestibility (>90%)

• Optimal faecal consistency

• Higher palatability than adult

• Unique product within the channelWithTURKEY


New: with chunks made with fresh meat

• Consumers associate freshness with high quality

• Significant increase in palatability

Friskies dry dog food with fresh meaty chunks


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 improvingoperating margin

Strong innovation track record and pipeline

Clear potential for continued profit improvement


Nestlé Investor SeminarNestlé Purina PetCare Europe - John Harris

Nestlé Investor Seminar Nestlé Purina PetCare Europe - John Harris · 2019-07-14 · The European...

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