158th Annual General Meeting

This transcript may have been edited for clarity

Address by Mr. Paul Bulcke
Chairman of the Board of Directors

Ladies and gentlemen,

And, dear shareholders, 2024 was also a year like no other for Nestlé. This has impacted you as well, and we care deeply about this.

As we saw Nestlé’s growth engine lose some pace last year, something precious to us has suffered: your trust. We recognize that trust is fragile… trust is hard to earn and easily lost. We are determined to earn it back fully.

Dear Shareholders,

Nestlé’s Board of Directors is responsible for the strategy of our company. It is fully engaged in reviewing, refining and overseeing the strategic direction of your company, the alignment and efficient execution behind it, and in taking decisive action when necessary.

Last year, the Board took one of the most important decisions a Board can take. It took the decision to nominate a new CEO, Laurent Freixe. Let me take this opportunity to thank Mark Schneider for his years with Nestlé.

Laurent is the right leader at the right time. With almost 40 years at Nestlé and in our industry, he knows our company inside out, our culture, our values, and our people. He knows what works now and what is needed for our future. He embraces new opportunities and knows how to align and motivate the organization. Laurent is all about performing today while we transform to ensure our long-term success.

Together, we are working hard to reinforce our reputation as a dependable, reliable company that consistently creates value for all stakeholders.

Since his appointment, Laurent and his executive team have moved quickly to align and refocus the organization. They developed a strong plan and have already taken decisive actions to accelerate our growth. All these actions are anchored in the Nestlé Virtuous Circle. Laurent will talk more about this later.

I am happy to say, and you may have noticed it yourselves, that for several months now, we have seen promising signs linked to these actions.

As I said at other occasions, we are going Forward to basics, with the emphasis on moving forward. The "basics" is the engine that has always driven Nestlé: a good strategy, our people, our brands, our innovation, our execution. It is about playing to our strengths. But "forward to basics" is, above all, about focusing on the future. Being open, agile, curious and enthusiastic to embrace new opportunities.

Dear Shareholders,

Nestlé’s 2024 performance was solid and in line with our latest guidance. We delivered this in a challenging macroeconomic context and soft consumer environment. Our CEO will comment on these 2024 results in a few moments.

I would like to warmly thank the entire Executive Board and all Nestlé employees around the world for their commitment and tireless work.

Based on these results, the Board of Directors proposes to you today a dividend of 3.05 Swiss francs per share. This represents an increase of 5 centimes compared to last year.

We remain committed to the long-held practice of increasing the dividend in Swiss francs every year. If today’s proposal is approved, Nestlé will have maintained or increased the dividend in Swiss francs over the last 65 years, of which the last 29 will have seen consecutive dividend increases. Ladies and gentlemen.

With our people, our global presence, with our strong portfolio of iconic brands, our focus on consumers, and our research and development capabilities, we are confident in our ability to unlock growth through our Nutrition, Health and Wellness strategy and our Creating Shared Value approach to business.

We are the Good food, Good life company. Nutrition has always been our raison d’être, has always been the driving force at Nestlé - from Henri Nestlé’s infant cereal almost 160 years ago, to the present day. Across the communities we are part of, the need for nutritious, high-quality, accessible, convenient and affordable foods remains as relevant as ever. It is a need that plays to our strengths and projects us forward.

We are unique in this sense: no other company offers products and services for every phase – every moment - of life, for every moment of the day, and this all around the world.

Our ambition is to help billions of people enjoy tasty and balanced diets. And, thanks to our extensive R&D and innovation, we are ideally placed to respond to the needs of today and to the evolving needs of the future as well.

In today’s world, with rising obesity rates, undernourishment and food scarcity affecting millions of children and adults worldwide, it is more important than ever to widen access to balanced and affordable nutrition, in full transparency, and to create sustainable and resilient food systems. We will continue to play our role in helping address these challenges. We have been and will continue to be part of the solution by:

• leveraging our scientific and nutritional expertise, manufacturing excellence and strong supply chain experience;
• using high-quality ingredients;
• offering a wide choice of safe, affordable, convenient and tasty food all year round.

Yes, we are all about Nutrition, Health and Wellness. But we are also the company that creates shared value, that wants to be a force for good.

It is our conviction that a company should create value for all its stakeholders - for you, our shareholders, as well as for society at large. This is deeply embedded in our company and has been our way of doing business since our company was founded all those years ago.

In today’s ever-changing and, unfortunately, increasingly polarized world, the role of a company like Nestlé is even more important. Our steady and reliable presence spans across the globe. We focus on feeding and nourishing people and pets, and we produce locally in partnership with local communities.

We understand the significance of being there, even and, especially in, challenging times. We are a global company, but we firmly believe in our responsibility to serve local consumers and local communities. This commitment fosters trust and creates lasting connections.

With a presence in 185 countries and over a billion products sold each day, we take great pride in the positive impact we are making globally.

Allow me to share a few examples:

• We continue to reformulate our products and to enrich them with micronutrients such as iron, vitamin A, iodine, and zinc. In 2024, we provided around 200 billion servings of micronutrient fortified foods and beverages, addressing nutritional needs.
• Because we care for the environment, we continue making strong progress on reducing our absolute GHG emissions within our supply chain. We reduced our net GHG emissions by over 20% compared to 2018.
• And with the challenges food systems are facing, we continued to foster regenerative agriculture practices. Already more than 21% of our raw materials are sourced from farmers adopting such practices.

And there is so much more. These examples represent only a fraction of our global impact. You can find further details in our extensive Non-Financial Statement, which you will vote on later today. With the publication of this document, we continue our tradition of transparency, in accordance with Swiss law and in anticipation of future requirements of the European CSRD regulation.

Furthermore, I have the pleasure of presenting the Creating Shared Value at Nestlé 2024 document. This document illustrates concretely – with examples, stories and testimonials - how our Creating Shared Value approach to business is coming to life around the world. I hope you will find it useful, informative and inspiring.

Before concluding, I would like to address the composition of our Board of Directors. Over the years, we have continued to strengthen our Board by adding new independent directors who bring diverse experience and skillsets directly relevant to Nestlé. These areas include for instance, fast-moving consumer goods, marketing, digitalization, food systems, sustainability, geopolitics, and financial and operational expertise.

On September 1st, 2024, Laurent Freixe was nominated CEO of the Nestlé Group. Today, we are proposing to elect him to the Board. Under Nestlé’s governance model, the Board delegates the operational management of the company to one of its members ("administrateur délégué"). This ensures the CEO’s complete strategic alignment with the Board and gives him full authority.

The Board we are proposing for election and reelection today is well-equipped to guide Nestlé towards a successful future. It is a Board of Directors that possesses the expertise and experience needed. It is a Board with the ability to ask the right questions at the right time, considering all perspectives of our industry and society. It is a Board of Directors that ensures the right strategic direction and structure to keep our company healthy, now and in the future.

Dear Shareholders,

Let me close by repeating what I said at the beginning: we are working tirelessly to reinforce our reputation as a dependable, reliable company that consistently creates value for all stakeholders.

And we will do this because:

• We have a relevant and compelling strategy… Nutrition, Health and Wellness
• We have unmatched strengths… products and portfolio, iconic brands, global presence, local knowledge and in-market capabilities
• We have the R&D expertise to develop the products our consumers want and that meet their needs
• We have the people… committed and passionate

And we all, as a company, have the willingness, determination and agility to succeed, looking for new opportunities and permanently challenging ourselves. On behalf of the Board of Directors, Nestlé’s executive management and all employees around the world: thank you for your trust and ongoing support. Together, we will continue to build a sustainable and successful future for Nestlé.

I would now like to invite our CEO, Laurent Freixe, to share more details about our 2024 performance as well as our plan to accelerate growth. Thank you for your attention.

Address by Mr. Laurent Freixe Chief Executive Officer

Thank you, Paul,

Dear shareholders, ladies and gentlemen, thank you for being here today.

I would also like to warmly welcome those of you following us via live stream.

Paul touched on Nestlé’s many strengths. Allow me to once again emphasize what has contributed to our company’s success for almost 160 years: We have iconic brands and products. An unmatched global presence. A deep understanding of the locations where we are present. We are both the most global and the most local company there is. We have leading innovation and execution capabilities. And, most importantly, the commitment of our employees at every level of the company is exceptional. This fills me with pride every day.

In my first address to you, dear shareholders, I want to say how honored I am to lead our great company. It is a tremendous privilege.

I am aware, however, of the magnitude of the task ahead of us. Nestlé has faced challenges in recent years, and trust in our company has suffered as a result. We are determined to regain this trust, and to again become the benchmark in our industry.

That is what I’d like to talk to you about today – our action plan to accelerate our performance and our transformation. We have a plan, we have the resources, and we have the teams to implement it.

Reviewing 2024

But before we talk about our action plan, let’s quickly review 2024. The macroeconomic situation was tough: Inflation normalized, but food prices remained high. Geopolitical tensions grew. And in this environment, consumer demand weakened.

Last October, we revised our 2024 guidance to a realistic level. And since then, we have met and even slightly exceeded expectations, achieving organic growth of 2.2% for the year as a whole, with a marked acceleration in the last quarter. I want to highlight that real internal growth – i.e. the growth in the volume and mix of our sales – returned to positive territory last year, with a noticeable improvement in the second half. The underlying trading operating profit margin was in line with our latest guidance, reflecting an increase in raw material costs, which part of the industry is currently facing, as well as our investments in growth drivers. Free cash flow also improved. Overall, our financial performance was solid given the environment in which we operated.

Thanks to the hard work and commitment of our teams, we were able to regain positive momentum. We are building on that in 2025. I’d like to thank my colleagues at Nestlé for their continued support and for their decisive contribution to our results.

Positioning Nestlé for success

In the last few months, we have taken several measures to accelerate our growth, while continuing our transformation.

We have acted swiftly: To start with, we have simplified and restructured our organization, moving from five Zones to three Zones and streamlining our Executive Board as well as rejuvenating it. The CEO of Nespresso has joined the Group’s Executive Board, and we have also placed IT and Digitalization as well as Strategy and Sustainability directly under my responsibility. These changes ensure that I’m able to better control the levers of our performance and transformation, make faster decisions and effectively drive our global initiatives.

Furthermore, we have created a stand-alone global division for Nestlé Waters. This will allow us to take full advantage of our iconic brands, such as S.Pellegrino and Perrier, and develop a new partnership for the future.

We have extensively communicated our strategy internally, with a focus on the Nestlé Virtuous Circle. This Virtuous Circle model allows us to strengthen our investment policy with the aim of accelerating growth. We are generating the resources for this strategy through major initiatives aimed at increasing productivity and reducing costs.

Last November, we announced a new, three-year, 2.5 billion Swiss franc cost-savings program. Our goal is to save 700 million Swiss francs by the end of 2025. The program is well underway, and we will communicate regularly on its progress.

The bulk of our efficiency gains are from our supply chain. We are leveraging our critical mass and using technology and artificial intelligence to optimize our purchasing.

Our digital transformation is crucial. By utilizing the most advanced technologies, we can become more agile and improve our performance. We see the impact of new technologies at all stages of our value chain. From real-time analysis of consumer expectations to research and development, planning, supply chain, and, of course, the generation of demand. To implement these technologies and achieve this level of efficiency on a global scale, we will invest decisively in an ambitious program.

Investing for growth

We intend to act with a strong sense of urgency to accelerate Nestlé. It’s vital that we aggressively do so now.

We have defined three pillars of growth: develop our core business, deploy innovative products with strong potential, and seize future opportunities.

First, it’s essential for us to invest in our core business and not get distracted by non-essential activities. We are investing in our best-performing and most profitable brands. We are looking to expand to new regions and geographies, while trying out new formats and new offerings that we think will be popular with our consumers. And we are intensifying our communication around our iconic brands by increasing our advertising and marketing spend. Our goal is to reach 9% of sales at a steady pace by the end of 2025, a significant increase from the current 8.1%.

KitKat is a good example here. It is one of our best-known brands worldwide, with strong potential for growth.

We are committed to promoting its expansion by partnering with Formula 1, a spectacular high profile global event where the KitKat break naturally finds its place.

When it comes to rolling out innovative, new products, we are focusing on those where we see the greatest potential. This involves a limited number of highly promising innovations that we think can each generate more than 100 million Swiss francs in annual sales. Fewer, bigger and better launches is our guiding principle here. We refer to these areas of investment as "big bets."

Our Nescafé Espresso Concentrate is one of them, and it is capitalizing on the cold coffee trend, which is driven by younger generations worldwide. We recently launched this new product in Australia, China, the US, Japan and the UK, with other European markets to follow. Another example is our pyramid-shaped wet cat food under the Purina Gourmet and Fancy Feast brands. This innovation is particularly liked by cats, who are demanding consumers.

Our third area of investment is in the future of nutrition. Consumers’ needs are changing. The areas of healthy longevity, women’s health, weight management and affordable high-quality nutrition are growing in importance and will offer significant opportunities for the future. With our scientific knowledge and our offering for every stage of life, from birth to old age, we can effectively address these trends.

Conclusion

Ladies and gentlemen, dear shareholders,

Nestlé is uniquely positioned to play a key role in the lives of our consumers, globally and at all stages of life. Nestlé has the ability to help solve the major challenges facing our planet, from climate change and food security to the transformation of agriculture toward regenerative practices. Our shared value creation model and our long-term focus make us the major player and leader in our industry.

We have a strategic framework guiding our actions: the Virtuous Circle, which supports our investment policy to accelerate Nestlé, our performance and our transformation.

We have clear goals and the support of our employees. We have the privilege of relying on the best talent, an outstanding portfolio of brands, top-quality products as well as unmatched research and development capabilities, many of which are based in Switzerland – particularly in Lausanne. And we have a global presence, coupled with extensive local expertise.

We capitalize on a historic legacy that has made us the foremost company in our sector. We act decisively in the present to build a bright future, driven by our talented people, our brands, our capacity for innovation, technology and sustainability in order to be the global benchmark, the engine of our industry, at the service of our consumers and customers.

Dear shareholders, thank you for your attention and support.

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