Nestle 4Q15 Earnings Call Notes

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Nestle’s (NSRGY) CEO Paul Bulcke on Q4 2015 Results

2016 is going to have the same challenges as 2015

“I don’t think 2016 is going to be much different from 2015. It is going to have the same uncertainty, the same challenges like 2015. But this is not new. Dare I say, we have seen that before. We have been there before.”

E-commerce key in China

“And talking about online channels in China, ecommerce is of extreme importance and we have heavily engaged with this. And already 50% of our sales in petcare goes via ecommerce in China, 30% in coffee, 30% also infant formula. And last year, for example, alone, our ecommerce business in China almost doubled. And this will remain a key growth driven also in the years to come.”

There’s been a softer growth environment and part of that is pricing

“In the last years it is a softer growth environment in general and there is low pricing and pricing’s part of it. So what we aim at is to be on the higher end of our industry, to be leading our contemporaries, to have the initiative of these categories ending in new dimensions and innovation, that we’re the top of mind among consumers in where we want to be.”

Price increases are not part of the discussion

“in certain parts of the world like Europe, Western Europe, pricing is not like part of the discussion. And we see our customers and we’re in permanent contact with them and price and price increases is not part of the discussion we have with them. So we have to be aware of that, hence a very, very strong focus on costs and really going for the brands that matter.”

Francois-Xavier Roger

Little improvement in consumer sentiment in NA

“Briefly touching on the macro environment for the zone, it is fair to say that we have seen very little improvement in consumer sentiment in North America over the past year. Latin America, on the other hand, is mixed, but Brazil, Argentina and Venezuela are particularly challenging and will likely remain so in 2016.”

Strong growth in water

“Waters has delivered another strong year of organic growth of 6.8%, driven entirely by RIG. The trend towards healthier hydration is dynamic, driving robust category growth. Consumers are increasingly drinking water over CSDs and other sugary beverages. And our balanced portfolio and footprint of international brands and leading local brands means that we’re growing in all categories and geographies.”