Nestlé S.A. (SWX:NESN)
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Apr 27, 2026, 5:30 PM CET
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AGM 2016

Apr 7, 2016

Speaker 1

15 and the 1st months of 20 16. Shareholders, ladies and gentlemen, in 2015, your company once again achieved operational and financial results that position it as one of the best businesses in its industry. And these results have been achieved against a backdrop of political and economic challenges and volatility in many parts of the world and of deflation in Western Europe. These results are further evidence of your company's solidity and reliability and of its ability to grow its business sustainably and profitably whilst at the same time preparing for the future. Indeed, we have continued to invest in developing our brands, in innovation, in research and especially our employees.

And we intend to continue these investments in the future. Our CEO, Mr. Paul Boolke will in a moment outline the operating results for 2015 and he will provide further details of your company's activities. But allow me to pay tribute to the fine management and leadership of our management team here at my side and to the hard work and dedication of the 335,000 Nestle employees all over the world. I would like to thank them all on behalf of the Board of Directors and I'm sure on behalf of every one of you.

Thank you very much indeed for this round of applause for our employees. Dear shareholders, both the Board of Directors of your company and its Executive Board value your trust in them, your loyalty and your concern for the company's long term interests. Continuing our long term policy, the Board of Directors is proposing once again an increased dividend, a dividend increased to CHF2.25 per share. If you accept this proposal, the total amount of the dividend paid out to shareholders will come to, ladies and gentlemen, to CHF7 1,000,000,000. The return offered by our company's stock is 1st rate and is worth emphasizing, especially in view of the volatility of the financial markets and the foreign exchange rate situation.

Since 1942, your company has never cut the dividend it pays its shareholders. And for over 20 years now to be precise, since 1995, the dividend paid out has increased every year. And the total shareholder return, the return for you, has amounted to 8 80% over the same period. I would now like to hand over to Paul Boolke, another member of the Board of Directors, and he will speak to you about the company's performance in 2015. Thank you, Peter.

Thank you, Peter. Ladies and gentlemen, dear shareholders, good afternoon. It's well known that each year brings its own challenges, and 2015 was no exception. In a difficult environment, Nestle, your company, our company, delivered solid and profitable growth at the higher end of the industry, building on the consistent and sustainable performance in previous years. It should be noted, and you know this well, that the strength of the Swiss francs in recent years, last year included, has not been favorable to us.

Nevertheless, total group sales reached CHF 88,800,000,000 in 2015 with organic growth of 4.2%. Our growth was mainly driven by higher volumes and market share gains rather than by price increases. The group's trading operating profit increased to CHF 13 point 4,000,000,000 representing a margin of 15.1 percent or an improvement of 10 basis points in constant currencies. The group delivered a net profit of CHF9.1 billion, and our earnings per share amounted to CHF2.90 Centimes. At CHF14.3 billion, our operating cash flow remains strong among the best in the industry.

We delivered this performance in 2015, while at the same time continuing to invest substantially in the future in research and development, in our brands, in our new health and nutrition platforms as well as in our organization and our employees. In this way, we ensure that we have the right initiatives, skills and expertise to grasp the numerous opportunities around us to continue to deliver profitable growth. And it's this balance between delivering today and building for the future that characterizes Nestle. Such a performance doesn't just happen by itself and it bears witness to the talent, creativity, alignment and hard work of our 335,000 employees around the world. Ladies and gentlemen, as we celebrate our 100 and 50th anniversary, we remain true to Henri Nestle's original mission, which is to enhance lives and to help consumers care for themselves and their families by offering health and nutrition solutions for all stages of life, solutions that are increasingly based on scientific knowledge.

To guarantee our long term success, we must recognize the many changes around us, understand them and anticipate them. Society is currently undergoing important transformations that intersect and that confirm more than ever the validity of our nutrition, health and wellness strategy. We see the development of emerging countries, which is resulting in a growing middle class and strong urbanization. We see aging populations, which are creating specific nutritional needs and putting pressure on health care costs. We also see an accelerated evolution of consumers' expectations and preferences when it comes to their diets.

At the same time, science continues to make huge strides with significant progress being made in understanding the impact of nutrition on health and how nutrients interact with the human body. Finally, digital is fundamentally revolutionizing society in the way we communicate, the way we offer services and products to consumers. Our Chairman will come back later on to the long term effects of these transformations. All of these factors clearly pose challenges certainly. But also and more importantly, they also offer opportunities for Nestle.

And it's up to us to recognize them, understand them and get organized in order to anticipate and seize them. And this is exactly what we're doing. Hence, the importance of research and development in which we continue to invest heavily. We invested CHF 1,700,000,000 and filed for 3 100 patents in 2015. With 39 R and D centers around the world and more than 5,000 people directly we are collaborating with distinguished scientists from universities, biotech companies and startups.

And all these investments are aimed at driving innovation, at ensuring the relevance of our products and meeting the changing needs of society. Thanks to continued renovation of our portfolio of food and beverage products, we improved the nutritional profile of 8,000 products last year. In 2015, we removed 800 tons of salt, 18,000 tons of sugar and 1900 tons of saturated fats from our products. We're also responding to new expectations of consumers who are looking for more natural products with simple ingredients without gluten, for example. The positive reaction of consumers to the relaunch of our frozen food brands, Stauffer's and Lean Cuisine in the United States is a testament to this.

In addition, we're continuing to develop and invest in the research, innovation and expansion of 2 of our new promising and significant platforms. First, Nestle Health Science created in 2011 on the opportunity to confer a major therapeutic role to Nutrition and Health Management and Nestle Skin Health created in 2014 and based on Galderma, which offers science based solutions for the health of skin. All these initiatives are part of the active portfolio management of our products and brands aimed at ensuring that our resources are allocated to our best ideas, products and categories to deliver growth and sustainable financial performance. In this context, we have, amongst other things, significantly increased our support behind our brands such as Nescafe and Nespresso. Furthermore, we have discontinued certain activities such as Davigel frozen food, and we have implemented other business models as shown by our intention to create a joint venture for ice cream in Europe.

And finally, we have deepened our commitment in the digital world. One of our company's priorities for the past several years. First, regarding social media, we've built throughout the organization the necessary skills for this new form of listening, communication and dialogue with consumers and society in general terms. And thanks to our internal network of digital specialists, our office in Silicon Valley and partnerships with Facebook, Twitter and Google, we're keeping abreast of the latest developments in this area. We've done the same in e commerce online, commerce online.

We're already strongly involved in this area by Nespresso, for example, and here too, we've developed the necessary skills internally. And we're working with major e commerce players such as Alibaba, Amazon JD and the Rocket Internet Group, for example. Our e commerce activities are already today accounting for more than CHF4 1,000,000,000 with strong growth of 20%, which is accelerating, for example, in China, where our sales in e commerce have doubled in the course of 1 year. Ladies and gentlemen, dear shareholders, trust. Trust is the basis on which we build our success, the trust of our consumers and that of society in general.

This trust is linked to the quality of our products, but also to the quality of our interactions with society at large. And for Nestle, clearly, our way of working is based on creating a shared value. To be successful, we must have a long term vision, a long term vision based on solid principles and values founded on respect, respect for people and diversity, respect for the environment and respect for the world in which we live. To do this, we are transparent in our activities and our societal commitments in regards to nutrition, health and wellness, rural development, water, environmental sustainability and our employees. We communicate our ambitions and progress in these areas every year in our Nestle in Society report.

Thus, we have shared the information that we have reduced by almost 30% the energy consumption per ton of product manufactured over 10 years. During the same period, we decreased by more than 40% our water consumption and our direct greenhouse gas emissions, and more than 100 of our factories no longer send waste to landfill. Moreover, in the area of nutrition, we have provided 192,000,000,000 servings of micronutrient enriched foods, And Nestle Healthy Kids, our global program based on nutritional training and physical activity, is active in 84 countries, and it benefits more than 8,000,000 children. That's Nestle Healthy Kids. Finally, in Rural Development, we've trained 400,000 farmers through our Farmer Connect program, and we've purchased almost half our dairy ingredients and significant volumes of coffee and cocoa directly from farmers and cooperatives.

Our efforts and contributions to society are increasingly being recognized, and we rate highly in indices and rankings such as FTSE For Good, Access to Nutrition, Dow Jones Sustainability, Oxfam Behind the Brand and many others. And this proof of recognition motivates us. Ladies and gentlemen, in 2016, we're celebrating NESA's 150th anniversary, 150 years of passion for nutrition and passion for quality that builds trust. These are also 150 years of consistent performance, 150 years that we can be proud of. 2016 is the opportunity to thank all those who have built Nestle over 1.5 centuries.

And by this, I mean both our employees and you, dear shareholders. I would like to thank you for your trust in Nestle over all those years. We're aware of the many challenges ahead, but we're also aware of the many opportunities and we are organizing getting organized to grasp these opportunities. All of us, the men and women who make Nestle, we commit each day all over the world to continue to make Nestle the world leader in Nutrition, Health and Wellness. Thank you for your attention.

Speaker 2

Thank you, Paul. Ladies and gentlemen, as RCU was just saying, 2016 is an important year for Nestle. It's the year that marks the 150th anniversary of its foundation. And as Paul was saying, that's 150 years of passion for nutrition and quality, 150 years of development and success, 150 years of creating shared value for you, our shareholders and also for the society at large. And as was said earlier, we'll come back to the high point of these celebrations, namely society and the role of diet and nutrition for our health.

Nest will be located in Vevey on the very spot where Henry Nestle developed his original product, infant cereal. The 150th anniversary of our company is not only an opportunity to chart and celebrate its history, above all, it also allows us to look to the future. The world around us is in a state of flux, with progress and change continuing at ever increasing speed. Over the last 150 years, the Nestle Group has lived through all the world's major political, economic and social upheavals. It is thus now ready to face the future with confidence.

Our company was born at the start of the 2nd Industrial Revolution, which transformed manufacturing methods and encouraged the development of economic activity. Our company successfully adapted to the challenges of the 3rd Industrial Revolution, which since 1960s and the arrival of the computer and then the Internet has profoundly altered management practice, communication and our way of life. Since then, our company has seen 4 decades of remarkable development during which it has reinforced its leading positions geographically as well as in its product categories and also in its operational management. Today, we are at the dawn of what people are calling the 4th Industrial Revolution, which is bringing change with unprecedented speed and force and on a scale never seen before. We are currently witnessing the remarkable development of new insights in the fields of life sciences, the genome, artificial intelligence and even robotics.

It is the convergence of these different kinds of knowledge and their interaction with the digital world that makes this 4th Industrial Revolution unique. Ladies and gentlemen, I'd like to put before you some of the challenges as well as certain opportunities that will be presented to us over the coming years, thanks to the development of new technologies and of a world that is not just more and more interconnected and smart, but also more and more interested in health and well-being. Digitization will open the door to major advances in fields with which we are directly concerned, such as education, agriculture, food security and health. First of all, with new technologies emerging, consumption habits and behaviors are going to evolve immensely. Instant access whenever and wherever, not only to information but also to services and consumer goods, is gradually going to become the norm.

These needs and these new expectations and ways of behaving will encourage the creation of products and services that do not at present exist and that we cannot even imagine right now. Secondly, businesses' capacity to innovate will be the factor determining their ability to succeed and enjoy future growth. Innovation will rely more and more on an immense network made up of higher educational institutions, research institutes, startups and other sorts of companies. Big businesses will have to adapt and open themselves up to these new ways of working, cooperating and finding solutions together. In the area of health and wellness, which lies at the heart of the Nestle promise, there will be profound changes.

Digitization and technology progressively more present in our everyday lives will define new ways of managing our health with more prevention, greater personalization, and an increase in continuous monitoring through all sorts of connected objects and devices that will play an integral part of our daily routine. Ladies and gentlemen, a healthy and balanced diet will play a crucial role in health management. Finally, digitization will have a profound impact on the entire supply chain. The combination of artificial intelligence and robotization will lead to increasingly more efficient and safer industrial production methods. Making good use of large quantities of data, so called big data, and of new technologies will enable us to manage natural resources and agricultural production more efficiently.

This will likewise encourage a more efficient use of land and water while reducing greenhouse gas emissions. As part of our relationship with the agricultural world, which has always been a preferred partner of Nestle, we have a real opportunity to become involved in the rollout and adoption of these new technologies. They will enable us not only to increase production of foodstuffs, but also to improve, and that's very important, to improve quality, reduce waste, ensure full traceability of raw materials and give direct market access for small scale producers, thereby increasing their earnings. This will be particularly important for small farmers in emerging countries who are the heart of our commitment to rural development. This will ultimately improve employment conditions in this industry, and in particular, will help put an end to child labor where it still exists.

For Nestle, this 4th Industrial Revolution represents an outstanding opportunity for development, innovation and growth. Our investments in Health Science, Innovation and Digitization will enable us to prepare for the future, as our CEO, Paul Boolkur, just pointed out. The only certainty we have is that the economic, social, environmental models we know today will change profoundly. In particular, the world of labor and employment will undergo a significant transformation The prediction that over 60% of children starting primary school today will in future practice a trade or profession that does not currently exist. This is an indication of the changes yet to come.

As a result, and beyond developing an ability to adapt, innovate and grow, we must, at the same time, develop an ability to contribute positively to an inclusive society. A more inclusive society is what we need. This 4th Industrial is being driven above all by young entrepreneurs, young innovators and young consumers. They are asking us to reinforce our sense of responsibility towards future generations, our planet and our natural resources. This young generation considers that businesses and the private sector in general have a responsibility and a real opportunity to help develop a world that is more sustainable and more inclusive.

With this in mind, 2015 will probably be regarded as a landmark year in matters of sustainable development. The United Nations has published the Sustainable Development Goals for 2,030, And the COP21 Conference in Paris ended last December on a comprehensive and binding agreement to combat global warming. These developments are highly encouraging and have the potential and need to make a real impact in the coming years. And this is something we at Nestle are very pleased with, and we commit actively to contribute to these efforts. We've always been convinced that our activities and our success will benefit not only you, our shareholders, but also society as a whole.

We call this approach creating shared value, and it is by focusing on the fundamentals of this approach, namely nutrition, water and the environment, rural development and human rights that we will help to achieve a healthier diet and a lifestyle and a more sustainable environment and a more inclusive society. We are committed to these fundamental issues, not because we have to be, but because we believe in them. And this conviction is shared by our consumers, by the communities in which we are present, and also by all our employees. So ladies and gentlemen, by being a Nestle shareholder, as well as investing in a company capable of guaranteeing you a 1st rate financial return, you are also putting your faith in a company that is having a positive impact on society and its future. Everyone agrees that the private sector has an opportunity and a duty to contribute to society.

It is also worth asking ourselves how society and, in particular, governments and regulators will put incentives in place to encourage an increasing number of players in the business world and also in the community to develop behaviors and measures that favor sustainable and inclusive development in the long term. We also need a financial sector and investors that reward not only a company's economic performance, but also its contribution to society. This is also why we have published our report. This has been the case for the last 12 years. Our report on creating shared value, it's a key part of our annual report.

It provides a detailed account of our commitments and achievements in a way that is both transparent and in line with the highest standards of non financial reporting. These convictions are also reflected in our corporate governance. We have indeed extended the responsibility of the nomination committee within the Board of Directors to include the monitoring of the long term sustainability of the company in terms of its economic, social and environmental aspects. It will also monitor non financial and other aspects associated with our corporate social responsibility. The extended role of this committee likewise confirms the importance that Nestle attaches not only to the commitments made and reported in the Nestle and Society Report, but also the seriousness with which your company treats the real and effective implementation of those commitments.

As regards our corporate governance during 2015, the Board, your Board of Directors, of Directors, has studied the active management of Nestle's business portfolio, which our CEO spoke about just now. The Board of Directors has also examined the strategy of the group, as well as that of research and development. It has reviewed the major acquisitions made by the group over the last few years and its activities in China. Furthermore, and reflecting our belief in the importance of our people, the Board of Directors has been considering also paid a visit to our Nestle operations in the Middle East, a region that plays a strategic role in the new zone, M and R. Lastly, the Board has devoted an important part of its work in 2015, and this will continue to succession planning the Board of Directors.

Ladies and gentlemen, I should like to make a few comments on certain political developments in Switzerland, the impact of which is crucial for our company as they directly affect the legal framework within which we conduct our business. First of all, I should like to commend the judicial decisions taken by the Swiss Federal Council at the end of last year and the resolution not to make any new amendments to the Minda Law. The latter is essential for the country's legal stability, as even without amendment, the Swiss voting system for compensation remains the most stringent in the world. The consequences of the Minda Law are not favorable, as I've said many times in the past, but I can tell you that we can live with these new requirements. With regard to the taxation reform or company taxation reform in Switzerland, we praise the clear decision made by the population of the Canton Le Vaux to approve such a reform, and we hope this is a good omen for the reform to come at the national level.

Finally, as far as the relationship between Switzerland and the European Union is concerned, 2016 is a very important year for the future. This relationship is extremely successful for both sides. Switzerland benefits from its access to the European free trade area and 1,600,000 EU citizens have settled in Switzerland or go there every day as cross border commuters, and they make a good living here. There are clear advantages for Switzerland as well as for the European Union, and that is why we should all play our part in finding a solution that preserves the key elements of the bilateral agreements whilst also respecting the essential points of decisions made by the Swiss people. Dear shareholders, before I conclude, I should like to emphasize Nestle's key strengths, which enable it to look to the future with confidence.

Firstly, Nestle has a clear strategic plan based on the firm concept of nutrition, health and wellness and a determination to contribute to a healthier, more sustainable and more inclusive society. To put this strategy into practice, we can count on a team of people that is unique in terms of expertise, experience and diversity and also its loyalty. This confirms our company's capacity not only to develop its in house talent, but also to recruit expertise from outside whenever necessary. In the research and development field, we have an unmatched network of research centers with capabilities, technologies, and partnerships that allow us to continue to innovate in our historical product categories whilst develop being the requisite knowledge to redefine the role of food and nutrition in health management. We benefit from a world famous brand portfolio, which we are continuing to develop and strengthen.

Our corporate governance is strong and is recognized as such. It is based on clear convictions and principles which guide the management of our company and guarantee effective risk management and reporting which accurately reflects reality in all areas. Finally, all these aspects of Nestle's short term and long term success are anchored in strong values and principles shared not only by everyone who works for the company, but also by its stakeholders. These values and principles underpin all that we do, our success and our future commitments. I invite you, dear shareholders, to journey onward with us as we work to make our vision of nutrition, health and wellness a reality and to celebrate with us the 150 years of our company, not as an achievement, but as a basis, a foundation on which to build the future.

I invite you to share our enthusiasm for Nestle and our pride in working for its advancement. After all, it's what moves you, ladies and gentlemen, that moves us forward. Thank you for your attention. Thank you. Thank you for that.

I now have the pleasure of welcoming Madame Catherine Sorey. She's Director of the new Discovery Center, Nestle's new Discovery Center, NEST. She's going to make a short presentation. Sir, ladies and gentlemen, dear shareholders, in the famous Lewis Carroll story, there's this rather strange intriguing sentence that the White Queen says to Alice. It's a poor sort of memory that only works backwards.

To perceive and feel differently a logo emblematic of Switzerland by going behind the scenes of NEST, which means NEST in German as well. In a world that's increasingly complex and fast, we are increasingly looking for these precious moments that reveal to us what is essential and brings us close to that and those we love or even hosts and triggers these moments throughout an entrepreneurial odyssey of 3 centuries across several generations and across the world. Most see NEST as a Nestle Museum. However, the objective is not to go back in time and just tell the story for the sake of telling the story to remind us of memories just for the sake of reminding them or to celebrate just for the sake of celebrating. NEST wants to take you on a journey to wander around the meanders of history that belong to you, to openly explore questions about nutrition and to experience in a fun way our passionate vision of nutrition.

These are a few pictures which will wet your But let's now go to the Bosque area to discover the architecture of the Bosquee. In the 19th century, when Henri Nestle started industrial production of an infant cereal made up of milk, sugar and wheat flour. He chose its premises as close as possible to the railway station of VV for the transport of goods and as close as possible to the VVs for his energy supply just in front opposite the mechanic workshops. The dress is charming, Chaucer de la Gangette. It's a magical spot.

It seems to still be inhabited by the genie of the place. It's an industrial as well as cultural heritage that we want to preserve by rehabilitating these 3 historical buildings. First of all, La Fabrique, the factory, the original beams can be discovered gradually by the visitors as they walk up the floors. Then the villa with its pretty sculpted balconies and magnificent cast iron pillars, that's where Henry Nestle opened his first office premises. They've now become conference rooms.

Finally, La Boulangerie, the bakery where the bread necessary for making up the infant cereal was produced. The original metalwork is very simple and light, and this is where we are going to have the Henry Cafe. And to bring together these 3 buildings, we have built a huge, unique fan shaped contemporary atrium. It is going to cover a open and welcoming esplanade as well as an intriguing innovative structure. It's almost floating in space, which is going to confer a contemporary organic dynamic feel to these 3 historical buildings.

On this authentic industrial site, the metallic structures, historical structures have simply been cleaned and left as is, so that visitors constantly go back and forth from the past to the present and back again. And now for the visit. We will start by foundations, and we will be immediately and movingly plunged into 19th century Vive. We will cross several rooms to understand the very humble beginnings of the company by discovering Henri Nestle's laboratory. We'll also come to understand the role played by the Page Brothers in the birth of the Nestle Nestle company, but also in the development of the values, the founding values, which still remain relevant today.

We go up a floor to get to the Zeitgeist. It's a living library or contemporary archive of personalities, brands, icons, anecdotes and all the treasures that have marked the entrepreneurial adventure of Nestle from 1866 to today. There, the children will find a space set aside for them to weigh, sort, scan the boxes of products like in a mini factory. And this is where you will see advertisements of yore like this one. Let's leave the past behind to come back to the present.

Welcome to Forum, around a light show dedicated to major themes and food challenges of our time, environment, nutrition, agriculture, water, we will explore in a live in a fun and interactive way the questions that are relevant to us to better understand how together Nestle Society and each and every one of us we can all contribute to find a solution. And our visit ends with visions. It's a floating structure, skylit. It's a symbol of the perpetual movement of innovation. With surprising examples of Vanessa Innovations, personal testimonies of passionate such as poetic explorations in the infinitely small amusing perspectives on the food security at a global level and other surprising interactions at every step of these visions of nutrition, its relevance to health and well-being will become obvious to all.

NEST is a celebration of this continuous engagement commitment when the important times of the past lead to the knowledge of today, which lead to positive ideas for tomorrow. On the very spot where Nestle Henry Nestle had his vision, where he exercised his passion for nutrition, as today, our innovators do the same thing to offer balanced harmony and food quality. Nest continues in the founding spirit of its founder that puts humanity at the heart of its identity. Thank you, Catherine. I'm sure you have indeed whetted the appetite of all our shareholders, and they're all going to run along to see this extraordinary place.

And I imagine you'll take the whole family along, children and grandchildren alike, and they'll learn a great deal. So we await you at the new Discovery Center Nestle's gift to you all and to Verve and to the French speaking part of Switzerland to together celebrate these 150 years. Ladies and gentlemen, if you

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