Nestle

Our strategy: The choices we make

We focus our energy and resources where unlocking the power of food can make the greatest difference to the lives of people and pets, protect and enhance the environment and generate significant value for our shareholders and other stakeholders alike. This is why we:

• Apply our expertise in nutrition, health and wellness - developed over more than 150 years - to help people, families and pets live happier, healthier lives.
• Meet the needs of the modern consumer with healthy, delicious, convenient products for conscious, time-constrained lifestyles.
• Bring affordable, safe and high-quality nutrition everywhere to everyone, regardless of their income level.
• Bring distinctive, premium innovations to market fueled by creative exploration, consumer insights, pioneering nutrition science and culinary excellence.
• Advance our sustainability agenda to enhance the health of the planet, drive societal progress and support a sustainable food system, particularly in terms of:
• Packaging and delivering our products in ways that are safe and protect the environment.
• Offering more plant-based food and beverage options to enable us to be the consumers' preferred choice as they diversify their diets.

Our value creation model

Our long-term value creation model is based on the balanced pursuit of resource efficient top- and bottom-line growth as well as improved capital efficiency. We create value by:

• Fueling growth through continuous innovation.
• Improving operational efficiency.
• Allocating our resources and capital with discipline and clear priorities, including through acquisitions and divestitures.

Ensuring sustained mid single-digit organic sales growth

Our success is built on maintaining a diversified portfolio, both in terms of geography and category. Our ability to adapt to changing environments and to nourish our high-quality global, regional and local brands contribute to long-term financial performance. Our objective is to achieve sustained mid single-digit organic sales growth through a combination of rapid innovation, portfolio management and market share gains.

Generating continued moderate margin improvement

We fuel our growth agenda through disciplined cost management, improving operational efficiency at all levels of the business. In combination with sales growth, this approach enables us to free up resources for re-investment in product innovation, brand building and sustainability initiatives, while creating value for our shareholders.

Allocating capital prudently and improving capital efficiency

Our priorities are to invest in the long-term growth and development of our business, while increasing shareholder returns and creating shared value. We take a disciplined approach to capital allocation, with prudent financial policies designed to strike the right balance between growth, returns and flexible access to financial markets. In combination with our operating performance, this has allowed us to increase our Return on Invested Capital (ROIC) by 240 bps, from 12.3% in 2019 to 14.7% in 2020.

Creating Shared Value: The way we operate

We build for the long term, act with focus and combine global resources with local know-how to create value for both society and our shareholders at a meaningful scale. We do so because we believe that business should act as a force for good. We have made bold commitments to achieve net zero greenhouse gas emissions by 2050 and make 100% of our packaging recyclable or reusable by 2025. We will continue to advance our sustainability agenda and create new business opportunities by ensuring Nestlé brands speak to our purpose.

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