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Name of chairman

2007 full ear conference call - 21 Februar 2008

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2 Name of chairman2007 full ear conference call - 21 Februar 2008

Disclaimer

This presentation contains forward lookingstatements which reflect Managements currentviews and estimates. The forward lookingstatements involve certain risks and uncertaintiesthat could cause actual results to differ materiallyfrom those contained in the forward looking

statements. Potential risks and uncertaintiesinclude such factors as general economicconditions, foreign exchange fluctuations,competitive product and pricing pressures and

regulatory developments.

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2007 Highlights

Successful delivery of the Nestl ModelFood and Beverages the driver of growth and profitabilitySignificant improvement in key metrics despite environment

Nutrition, health and wellness transformationCompletion of the Healthcare and Gerber acquisitionsAnnualised sales of over CHF 11 billion for Nestl Nutrition

Organisational transformation agile fleetIndividual businesses focused on individual opportunities

Strategic brands drive growth

Billionaire brands enabling both volume growth & pricing First mover advantage

Early identification of input costs & pre-emptive strategies meanthey have no material impact on 07 performance

Hi hli h ll i i

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2007 Highlights all metrics improveDelivering the Nestl Model

Sales total

Organic growth

EBIT

EBIT margin

Net profit

Net profit margin

Working capital

(% of sales)

Operating cash flow

ROIC

- before goodwill

- after goodwill

+ 9.2 %

+ 7.4 %

+ 12.9 %

+ 50 bps

+ 15.8 %

+ 60 bps

- 10 bps

+ 15.1 %

+ 100 bps

+ 50 bps

+ CHF 9.1 bn

+ CHF 1.7 bn

+ CHF 1.4 bn

+ CHF 1.7 bn

CHF 107.6 bn

CHF 15.0 bn

14.0 %

CHF 10.6 bn

9.9 %

6.6 %

CHF 13.4 bn

22.2 %

12.2 %

Improvements FY 07 v 06 FY 07 Total

F d d B

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Food and BeveragesAll metrics improve

2007

2006

RIG OG EBITmarginSales

CHF 100.3 bn

CHF 91.8 bn

+ 9.2 % + 40 bps

12.6 %

12.2 %

Strongon-goinggrowth

4.0 %

7.1 %

5.9 %

4.2 %

EBIT

+ 12.7 %

CHF 12.6 bn

CHF 11.2 bn

C ti d t th

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6/316 Name of chairman2007 full ear conference call - 21 Februar 2008

Continued strong growthGroup and Food & Beverages

CHF 100.3 bn

Food & Beverages

Pricing

Acq./Div.Exchange Rates

CHF 107.6 bn

Total Group

+ CHF 9.1 bn

+ 9.2 %

total+ 3.0 %

+ 1.4 %

+ 0.4 %

+ 4.4 %

+ CHF 8.5 bn

+ 7.1 %

OG + 9.2 %total

+ 4.0 %

+ 0.6 %

+ 1.5 %

+ 3.1 %

+ 7.4 %

OG

RIG

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Total Food & Beverages*

* each region includes sales of Food & Beverages, Nestl Waters and Nestl Nutrition businesses, Nespresso and F&B JVs

Sales

CHF bn

x.x

2.9

4.4

5.3

4.2

8.6

9.6

39.0

Europe

% RIG

% Organic Growth

Americas

42.5

Asia, Oceania, Africa

18.8

0

1

2

3

4

5

6

7

8

9

10

%Growth

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Dairy(incl. Ice cream)

Product groups RIG & organic growth

% RIG % Organic growth

%Growth

7.6

5.0

1.7

6.5

3.2

2.3

3.8

10.210.3

6.6

7.8

9.7

4.0

5.3

7.0

11.0

0

2

4

6

8

10

12

Powdered &Liquid Beverages(ex-Nestl Waters)

NestlWaters

NestlNutrition

Prepareddishes &cooking aids

Confectionery PetCare Pharma

SalesCHF bn 17.9 10.4 20.7 8.4 18.5 12.3 7.312.1

Total Beverages (RIG 6.6 % OG 8.9 %) Total Milk, Nutrition & Ice cream (RIG 2.8 % OG 8.3 %)

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%Growth % RIG % Organic Growth

SalesCHF bn

Primary: RIG & Organic growth

2.0

3.3

4.45.0

6.5

21.4

4.0

3.0

8.1

8.8

6.6

9.7

23.2

7.1

ZoneEurope

28.5

ZoneAmericas

32.9

ZoneAOA

16.6

NestlWaters

10.4

NestlNutrition

8.4

Other F&B

3.5

Total F&B

100.3

0

2

4

6

8

10

12

14

F&B "Billionaire Brands" represent

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F&B Billionaire Brands representabout 70 % of F&B sales

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Accelerating trend in pricing

1.8

2.2

2.6

3.1

07

H1

07

9M

07

FY

07

Q1

% CumulativePricing

F&B

0.5

1

1.5

2

0

2.5

3

3.5

2007 Full Year Results

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2007 Full Year ResultsKey factors of margin improvement

EBIT2006

COGS Distribution Marketing R&D EBIT2007

13.5 %

+ Operation Excellence

+ Mix

- Input costs

- 60

GROUP EBIT MARGIN + 50 bps (+ 60 constant currency)F&B EBIT MARGIN + 40 bps (+ 50 constant currency)

Spend

+ 8.1 %

14.0 %

EBIT + 12.9 %

+ CHF 1.7 bn

+ 20

CHF spend + 1.5 bn

Media % up with sales+ Trade spend efficiencies+ Volume growth

+ 90

+ GNBS+ Growth

+ Efficiencies

Administration- 10

+ 10

+ 50

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High quality results

Increased input cost pressure Currency translation impact of 10 bps

Increased media spend Improved trade spend efficiency Increased R&D spend

Improved management of Admin costs

Increased EBIT by CHF 1.7 bn

Improved EBIT margin by 50 basis points

2007 performance demonstrates value of growth

EBIT P i i

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EBIT Primary reporting

11.7 12.0

ZoneEUR

15.8 16.3

ZoneAMS

16.616.3

ZoneAOA

8.78.2

NestlWaters

16.9

13.6

17.2

15.8

NestlNutrition

OtherF&B

12.2 12.6

TotalF&B

% EBIT 2006 % EBIT 2007

+ 30 bps

+ 30 bps

+ 220 bps

+ 40 bps

- 50 bps

- 30 bps

+ 50 bps

2006 EBIT figuresrestated to reflect internal changes in management responsibility as of 1.01.07

EBIT S d t

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EBIT Secondary segment

% EBIT 2006 % EBIT 2007

Powdered & liquidBeverages

(ex-Nestl Waters)

Dairy (incl.Ice Cream)

Prep.Dishes &

Cook. AidsConfectionery PetCare

Pharma.products

22.4 22.4

0 bps

11.5 11.6

+ 10 bps 15.1 15.5

+ 40 bps

31.9

33.3+ 140 bps

13.2 13.0

- 20 bps

10.211.1

+ 90 bps

Increased earnings per share,

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Increased earnings per share,proposed dividend and payout ratio

Dividend per share CHF

Earnings per share (Full) CHF

19.51

17.04

+ 16.4%

7.20

16.05

8.00

10.40

23.90

20062003 2004 2005 2007

9.00

20.78

12.20

27.81

+ 17.3%

CHF 4.4 bn ofshares bought backin 2007 on going

I d t f ki it l

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Improved management of working capital

Working capital total (in % sales)

6.2

6.4

6.6

6.8

7.0

7.2

7.4

7.6

7.8

Working capital total includes Trade receivables, Inventories, Trade payables, Other receivables, Prepayments,

Accruals, Current tax payables and Other short term payables. Calculation is based on year-end figures.

10 bpsimprovement

2003 2004 2005 2006 2007

7.2

6.9

7.7

6.7 6.6

Strong cash flow generation

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Free cash flow (FCF)

Strong cash flow generation

Operating cash flow (OCF)

0

2

4

6

8

10

6.64

10.41

6.56

10.21

7.02

11.68

2005 2006 20072003 2004

6.36

10.13

CHFbillion 12

OCF

+ CHF 1.76 bn

FCF+ CHF 1.21 bn

8.23

13.4414

2007 Summarised

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2007 Summarised

9.2 % sales growth; 7.4 % organic growth

EBIT margin up 50 bps to 14 %

Nestl generated an additional- CHF 9.1 billion of sales- CHF 1.7 billion of EBIT

- CHF 1.4 billion of net profit- CHF 1.7 billion of operating cash flow

Well placed for further improvement in 2008- another year of delivering the Nestl Model- Strong EPS & share buyback contribute to outperforminglong-term shareholder value creation

Questions & Answers

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Name of chairman2007 full ear conference call - 21 Februar 2008

Questions & Answers

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We plan to deliver the Nestl Modelannually over the next 10 years

5-6 % organic growthSustainable improvement in EBIT

Improving trend in Return on Invested Capital

Background slides

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Background slides

Nestl Raw Materials Packaging & Energy

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Nestl Weighted Average Commodity Price Index

(Raw Materials, Packaging and Energy in CHF)

(Jan 1998=100) to December 2007

50

70

90

110

130

150

170

190

Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08

Price

Index

Nestl Raw Materials, Packaging & Energy

Nestl Main Agricultural Commodities

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Nestl Weighted Average Main Agricultural Commodities Index

in CHF (Jan 1998=100) to end December 2007

50

60

70

80

90

100

110

120

130

140

Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08

PriceIndex

Nestl Main Agricultural Commodities

P&L: EBIT to Net profit

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EBIT 13.5 14.0 + 50

Net other income/expenses (0.5) (0.6) - 10Financial income 0.5 0.6 + 10Financial expense (1.2) (1.4) - 20

Profit before taxes 12.3 12.6 + 30Taxes (3.4) (3.2) + 20Share of results of Associates 1.0 1.2 + 20

Net profit/loss on disc. operations 0.1 0.0 - 10

Profit for the period 10.0 10.6 + 60Attrib. to the shareholdersof the parent (Net profit) 9.3 9.9 + 60

Net profit (CHF million) 9,197 10,649 + 15.8 %

FY 2006 FY 2007 Diff. basis points

As % of sales (rounded)

P&L: EBIT to Net profit

FY 2007 underlying tax rate & EPS

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Underlying full year tax rate

25.7 %, down from 27.8 % in 2006

Underlying EPS CHF 28.01, up 16.1 % from CHF 24.12

Underlying Earning Per Share (EPS) definition:Net profit before, impairments, restructuring costs, results on disposals, significant one-off items.

The above items have been adjusted for tax.

FY 2007 underlying tax rate & EPS

Cash conversion cycle

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0

10

20

30

40

50

60

70

20052002 2003 2004

5650 4746

2001

Days

Definition Cash conversion cycle:(AVG trade receivables/sales) x 365 + (AVG inventory/ COGS) x 365- (AVG trade payables/ COGS) x 365

46

Cash conversion cycle

2006 2007

4034

Return on invested capital improves

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Return on invested capital improves

excluding goodwillincluding goodwill

2005

20.8 %

2002

18.9 %

11.0 %

2003

19.9 %

11.0 %

2004

19.9 %

10.8 %

11.4 %

+ 100 bps

+ 50 bps

2006

21.2 %

11.7 %

12.2 %

22.2 %

2007

Net indebtedness*

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* Total financial liabilities minus liquid assets.Liquid assets do not include the carrying value of treasury shares of CHF 8.0 billion.

** Restated

CHFbn

2003 2004 2005 2006

H1 H2 H1 H1 H1H2 H2

21.1

14.415.4

10.2

12.5**

9.7**

13.5

11.0

13.4

0

5

10

15

20

25

H2 H1

2007Figures atperiod end

21.2

H2

Currencies

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Euro (1) 1.57 1.64 4.4 %U.S. dollar (1) 1.25 1.20 (4.3 %)

sterling (1) 2.31 2.40 3.5 %

Real (100) 57.82 61.81 6.9 %

Yen (100) 1.08 1.02 (5.2 %)

Mex. Pesos (100) 11.47 10.96 (4.4 %)

FY 2006 FY 2007 % changeWeighted average FX ratesCHF per

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