1、Nestl.We unlock the power of food to enhance quality of life for everyone,today and for generations to come.Annual Review 2023Our purposeContentsAccompanying reportsYou can find more information about the Nestl Group at Find out more about Creating Shared Value at coverMilo As the worlds leading cho

2、colate malt beverage,Milo delivers nutritious energy and encourages kids to stay active and grow with sports,engaging over 30million kids annually through grassroots sports programs.Corporate Governance Report 2023 Compensation Report 2023 Financial Statements 2023 2 Letter to our shareholders 4 Our

3、 people on the ground 8 Implementing our growth strategy 12 Creating Shared Value 16 Connecting through our brands 32 Financial review 56 Corporate Governance and Compliance 63 Shareholder informationNestl.Unlocking the power of food to enhance quality of life for everyone,today and for generations

4、to come.Nestl Annual Review 20231A summary of the 2023 full-year results is shown here.Forfull results,please consult theFinancial review section.*Financial performance measures not defined by IFRS Accounting Standards.Forfurther details,see Financial review on page 34.Group sales(in CHF)Organic gro

5、wth*Real internal growth*93.0 billion+7.2%0.3%Underlying trading operating profit*(in CHF)Underlying trading operating profit margin*Underlying trading operating profit margin*16.1 billion17.3%+40 Basis pointsConstant currencyTrading operating profit*(in CHF)Trading operating profit margin*Trading o

6、perating profit margin*14.5 billion15.6%+190 Basis pointsConstant currencyEarnings per share(in CHF)Earnings per shareUnderlying earnings per share*4.24+23.7%+8.4%Constant currencyOperating cash flow(in CHF)Free cash flow*(in CHF)15.9 billion32.1%of net financial debt10.4 billionProposed dividend(in

7、 CHF)Proposed dividend increase3.00+1.7%Our financial performanceOur Nutrition,Health and Wellness strategy is fundamental to how we create value.What we sell(in CHF billion)Where we sell(in CHF billion)Number of employeesNumber of countries we sell in270 000188Total group salaries and social welfar

8、e expenses(in CHF)Corporate taxes paid in 2023(in CHF)14billion2.8billionOur businessWe apply our expertise in nutrition,health and wellness to help people and pets live happier,healthier lives.We do this alongside ambitious sustainability goals to generate significant value for our shareholders and

9、 other stakeholders alike.Powdered and Liquid BeveragesConfectioneryWater24.8Prepared dishes and cooking aids11.78.13.3Milk products and Ice cream11.0Nutrition and Health Science15.3PetCare18.8GC5.5EUR22.3AOA19.9LATAM12.8NA32.5Our key non-financial performanceWe create shared value through our socia

10、l and environmental commitments and supporting actions.To measure our progress,we use a comprehensive set of indicators that support our business performance and generate value for our shareholders and other stakeholders.Some key performance indicators are included here the full set is in our Creati

11、ng Shared Value and Sustainability Report.ClimateOur KPI*We aim to reduce our greenhouse gas(GHG)emissions by 20%by2025 and 50%by 2030 from 2018 levels,on the road to net zero by 2050 at the latest13.58%net reduction of GHG emissions versus 2018 baseline(a)(a)Covers emissions related to our net zero

12、 commitment.Net reductions(%)includes removals from both insetting and landscape projects.NatureOur KPI*We aim to achieve and maintain 100%assessed deforestation-free primary supply chains(for meat,palm oil,pulp and paper,soy and sugar)by 2022 and 2025 for cocoa and coffee 93.4%assessed deforestatio

13、n-free for stated primary supply chainsPackagingOur KPI*By 2025,we aim to reduce virginplastics by one third versusour2018 baseline14.9%virgin plastic reduction versus 2018 baselineDiversity,equity andinclusionOur KPI*46.4%management positions held by womenYouthOur KPI*By 2030,our ambition is to hel

14、p 10million young people around the world have access toeconomic opportunities7.74 millionyoung people around the world with access to economic opportunities since 2017Health and NutritionOur KPI*127.6 billionservings of affordable nutrition with micronutrient fortification provided in 2023*Non-fina

15、ncial performance metrics are defined in the Reporting Scope and Methodology for ESG KPIs document available at EY has performed limited assurance on the six key performance indicators on this page.The assurance statement with EYs independent conclusion can be found at Annual Review 20232Pursuing si

16、gnificant global opportunitiesNutrition,Health and Wellness is our past,present and future,and within that frame we continue to set new priorities.Our innovation capabilities enable us to consistently meet the rising expectations of a growing population.Portfolio optimization over the past years all

17、ows us to focus our efforts on our proven brands.Our operational excellence enables us to dependably deliver sustainable,profitable growth.And we continue to do business in a way that creates shared value for both our shareholders and society.Encouraging balanced dietsFoods and beverages are major d

18、rivers of long-term health,and consumers increasingly recognize this.We will continue to develop nutritious products that support peoples well-being,and we believe that such products will see increased demand in the years to come.In fact,in 2023,we reconfirmed our ambition to prioritize the developm

19、ent of our more nutritious products.This entails launching new products and renovating existing ones.It involves expanding micronutrient fortification,growing our affordable offerings,reducing sugar and salt content,and increasing our use of plant-based ingredients in our recipes.Dear fellow shareho

20、lders,As the Good food,Good life company,Nestl is proud to provide consumers with products they love and rely on.Even in the face of ongoing global challenges this past year,we stay true to our long-term ambitions and see a bright future with emerging opportunities.Additionally,we are actively guidi

21、ng people towards a more balanced diet by making the nutritional value ofour portfolio more transparent.We are strengthening our responsible marketing of indulgent products,providing clear front-of-pack portion guidance,and engaging with and informing consumers through our various online communities

22、 around the world.Supporting healthy agingNestls food and beverage portfolio caters to people at each stage of their life.It starts with the first 1000days and continues into adulthood and old age.With a rapidly aging global population,we see an opportunity to provide products that can support the n

23、utrition,health and wellness of older people.We can help boost their energy levels,enhance their cognitive health,support their mobility,and improve their general physical and mental health.We already offer several Nestl Health Science and dairy products that are specifically targeted to seniors.Tak

24、e,for example,successful brands like Boost,Pure Encapsulations or Molico.With our capabilities,we believe that we can leverage this trend across all of our categories to further grow.Investing in innovation We are investing in our future through innovation and entrepreneurship.Through our main resea

25、rch center in Switzerland and 23sites globally,and with an industry-leading R&D budget,we develop products tailored to the diverse needs of people and pets while reducing our environmental footprint.Experts at our newly inaugurated Institute of Agricultural Sciences,forexample,develop solutions in t

26、he areas of plant science,agricultural systems and dairy livestock.This is in addition to our four other research institutes looking at health sciences,food sciences,food safety and packaging.Digital technologies,including artificial intelligence(AI),are supporting sharper decision-making and increa

27、sed speed across the entire company.From procurement to e-commerce,digital analytics facilitate efficiency and Nestl Annual Review 20233U.Mark Schneider,Chief Executive Officer(left),and Paul Bulcke,Chairman(right)effectiveness.Data science and AI increasingly support us with innovation by revealing

28、 and predicting consumer demands,while also helping us bring new products to market faster.Creating Shared ValueCreating Shared Value is how we do business at Nestl,generating value not only for our shareholders but also for society.Nestls long-term success is supported by this approach.An example o

29、f this is Nestls efforts to advance regenerative food production by helping protect,renew and restore natural resources.To that end,we are supporting farmers and strengthening their communities.We are delivering on our commitments in a way that appeals to consumers increased expectations.Remaining d

30、edicated and dependableEvery year,our people show us how much can be achieved when we steadfastly pursue opportunities.We know that we do not have all the answers,but with our Paul BulckeChairmanU.Mark SchneiderChief Executive Officerglobal mindset combined with our expert knowledge of local consume

31、rs and markets,we are confident we can deliver on our ambition and our commitments.People all over the world rely on Nestl for good food and beverages.Our proven value creation model allows us to invest,innovate and grow even in challenging times,and makes us dependable for our shareholders and othe

32、r stakeholders.We are grateful for the support of our employees,business partners,consumers and communities.And we thank you,our shareholders,for your continued trust.Nestl Annual Review 20234Our people on the groundWe engage with our fellow employees,business partners and community members.From mee

33、ting with farmers to visiting retailers,touring our factories and doing volunteer work,our culture encourages and supports connecting with internal and external stakeholders.Nestl Annual Review 20235Nestl Annual Review 20236Nestl Annual Review 20237Nestl Annual Review 20238Garden Gourmet Marine-Styl

34、e Crispy Filet Our Garden Gourmet Marine-Style Crispy Filet launched in several European countries in2023,expanding the range of plant-based fish alternatives,which includes the popular Garden Gourmet Vuna.Implementing our growth strategyNestl Annual Review 20239Our purpose is unlocking the power of

35、 food to enhance quality of life for everyone,today and for generations to come.To achieve this,we pursue growth through rapid innovation,operational efficiency,and disciplined resource and capital allocation.Our portfolio is diversified,both in terms of geography and category.We have products for p

36、eople at all life stages that can be consumed as part of a balanced diet.We want to contribute to peoples health through nutrition and aim to help people of all ages live better.Ourinnovation capabilities ensure we deliver products that meet consumer needs and preferences,and are good for the planet

37、.Through digital technologies,we are able to be more agile and make better and faster decisions.Driving organic sales growth Organic sales growth is key to our growth ambition.Our portfolio is geared to deliver sustained mid single-digit organic sales growth based on investment in attractive categor

38、ies and regions,impactful innovation and execution discipline.Our knowledge of local consumers coupled with our scientific and technological expertise help us deliver innovations that support business growth,while meeting consumer needs.We also see many opportunities for growth through cross-fertili

39、zation between categories and geographies.In addition to core innovation activities focused on food safety,taste,nutrition and sustainability,we have intensified research in high-growth categories,such as early-life and therapeutic nutrition,alternative proteins,and coffee and systems technology.Eco

40、system building and business model innovation are also increasingly a focus of our categories.Alongside innovation,we continue to optimize our portfolio to focus on stronger brands and products.Innovating across life stages and health needsThe foods and beverages people consume play a pivotal role i

41、n their overall health.From pre-conception to early life,through to childhood,adulthood and old age,we aim to meet peoples nutritional and health needs throughout their lives.Nestl has deep roots in infant nutrition.For years,we have researched the composition of nutrients and bioactives present in

42、breastmilk as well as the role of probiotics in nutrition and health.Exploring the interaction between these different components,Nestl experts discovered a proprietary probiotic strain,B.infantis,that unlocks beneficial aspects of six human milk oligosaccharides(HMOs).This led to the launch in 2023

43、 of our proprietary blend,Sinergity,for use in infant formulas to support immunity and gut health.As we continue our tradition of supporting childrens health,we also need to consider an aging population that is living longer.Under our R+D Accelerator initiative,we developed the Nestl Goodnes range o

44、f products in 2023 to support healthy aging.It helps optimize peoples energy levels,restore their sleep quality and improve their focus through patented nutritional blends.The products were piloted in France,Singapore and the UK.Additionally,we launched the Nestl N3 range in China that helps people

45、maintain their overall health and well-being as they age.Expanding alternative proteinsIn 2023,we added to our plant-based portfolio by launching a range of vegan alternatives to fish filets,nuggets and fingers that stand out for their strong nutrition credentials,as well as their great taste and te

46、xture that is close to white fish.Garden Gourmet launched Marine-Style Crispy Filet and Marine-Style Crispy Nuggets in Europe,and Harvest Gourmet launched Crispy Fish-Free Fingers in Asia.We also continued to explore new concepts for dairy alternatives.Made with a blend of oat and fava,the new natur

47、al bliss beverages are a good source of high-quality protein.Our teams chose fava beans because of their many health benefits and good taste.In addition,we combined the goodness of milk with plant-based ingredients in our new Nido Milk&Soya instant powder launched in Central and West Africa and Nest

48、l is exploring emerging technologies like animal-free dairy beverages made with precision fermentation,which led to a pilot for Cowabunga in the United States.Nestl Annual Review 202310in our Bear Brand Doble Protein powdered beverage piloted in the Philippines.Both products are highly nutritious an

49、d affordable.Making innovation faster and more efficientWe are using AI and data science to complement our R&D capabilities and manage complexities during innovation.Our new recipe optimization tool uses advanced algorithms to help product developers better manage tradeoffs between ingredients,nutri

50、tion,cost and sustainability,while still meeting consumer expectations.In the development of the new Nescaf Dolce Gusto Neo coffee system,our experts optimized the manufacturing process through virtual simulations before applying technical settings on the physical machine.This helped them make quick

51、 and efficient decisions to manage thecomplex interaction between coffee,paper packaging material and the machine to ensure the perfect coffee cup for consumers.Improving efficiency with digital technologiesDigitalization is enabling better and faster decision-making,in addition to improving cost ef

52、ficiencies.We are harmonizing our data framework to be able to take advantage of different technologies,like AI.The Nestl Supplier Portal,a global digital collaboration platform,supports quality document management,sustainability data collection and supplier performance management.With over 7000acti

53、ve suppliers in over 40markets,it covers almost three-quarters of our direct material spend.Leveraging always-on analytics We are responding to fast-changing consumer needs in real time,using data to streamline our business processes.Our strategic procurement decisions are more informed,as we increa

54、singly leverage advanced statistical modeling with machine learning and automated price-trend analytics.And by deploying new marketing analytics capabilities at scale,we are building data foundation pipelines that automatically refresh our marketing effectiveness models for faster and smarter invest

55、ment decisions.In 2023,we spent 68%of our media budget digitally andacquired 308million first-party data records.Weare on track to meet our 2025 goals of 70%and 400million respectively.Using AI,this data helps our brands reach target audiences more efficiently and deliver more relevant,personalized

56、messages online.Accelerating e-commerceOur ambition for 2025 is that a quarter of our sales come from e-commerce.This will have a significant impact on all markets,brands and roles.To support this,we launched an e-commerce academy that offers personalized learning paths.Over 1500employees were train

57、ed and certified in 2023.We have also launched our own eB2B platforms in key markets such as Brazil,India,Mexico and Vietnam,and have partnered with other leading platforms,such as theeB2B platform BEES.Grown by only 59Colombian farmers and developed to create a unique tasting experience,the new Nes

58、presso N20 encapsulates over 20years of expertise.Nestl Annual Review 202311The N3 milk products are the result of development work done by experts at R&D Nutrition,R&D Singapore,R&D Beijing and Nestl Research.Thanks to our strong global capabilities,we continue to develop exciting innovations that

59、can be applied across different products,brands and categories.One of our latest unique science-based innovations is Nestl N3 milk,which offers new nutritional benefits.Made from cows milk,it has all the essential nutrients found in milk,including proteins,vitamins and minerals.In addition,it also c

60、ontains beneficial prebiotic fibers and has a low lactose content and over 15%fewer calories.Using a proprietary technology,we use specialized enzymes to break down lactose,a sugar found in cows milk,while generating prebiotic fibers.Clinical studies showed that the fibers promote the growth of mult

61、iple types of bifidobacteria,delivering gut microbiome benefits in healthy adults.N3 milk was first introduced in 2023,in a range of powdered dairy products in China,tailored to meet the dietary needs of local consumers.The N3 range includes a full cream and a skimmed milk product,both high in prote

62、in and perfect for the whole family.To support specific needs for healthy aging,the range includes two products with vitamins,minerals and probiotics to support bone health,muscle growth and strength,and immunity.N3 milk will be introduced in other product categories later,enabling us to support hea

63、lth and well-being across life stages.IN FIGURESOUR VOICES“N3 milk will serve as a basis for nutritious solutions for people with lactose sensitivity or who want to improve their gastrointestinal health.”up to 3x beneficial bifidobacteria growthDelivering novel technologiesIsabelle Bureau-FranzHead

64、of Nestls R&D for NutritionSwitzerlandNestl Annual Review 202312Creating Shared ValueNescaf Plan 2030 In Vietnam and other Nescaf coffee-sourcing countries,the Nescaf Plan 2030 supports farmers to use regenerative agriculture practices to reduce GHG emissions,enhance farmer income and improve social

65、 and environmental conditions.Nestl Annual Review 202313Drawing on our purpose to unlock the power of food to enhance quality of life for everyone,today and for generations to come we focus our energy and resources on making a positive impact at scale.We regularly conduct a materiality assessment to

66、 identify where Nestl has the greatest impact on society and the environment,and the topics most important to our business success.In this section,we provide a summary of the top-rated themes from our latest assessment.OurCreating Shared Value and Sustainability Report provides more details,includin

67、g how we are aligning with the Task Force on Climate-related Financial Disclosures recommendations.Supporting tasty and balanced dietsAs a company that stands for Good food,Good life,Nestlis stepping up its measures to help people enjoy abalanced diet.We are providing complete transparency on the nu

68、tritional value of our portfolio.Products with a Health StarRating(HSR)of 3.5stars or more together with specialized nutrition products,such as baby foods,vitamin and mineral supplements,and medical nutrition are considered nutritious.Together,these products accounted for close to59%of our food and

69、beverage sales in 2023.Our pet care portfolio is excluded from this assessment.Looking at peoples diets holistically,we know that people consume food and beverages not only for nutrition but also for enjoyment.Nestl aims to offer the right products for all these occasions,while also guiding people t

70、owards a more balanced diet.We are strengthening our responsible marketing practices,with new rules restricting the marketing to children under the age of 16years in effect as of July 2023.We are ensuring that all childrens confectionery and ice cream portions will be 110kilocalories or less and tha

71、t all multi-serve products from these two categories have clear front-of-pack portion guidance.And to help people enjoy our products as part of a balanced diet,we will provide more guidance,including recipes,menu planning,healthy lifestyle tips and recommendations for nutritious choices.Delivering f

72、ood safety and qualityHigh standards of food safety and quality are non-negotiable at Nestl and are fundamental in our engagement with consumers.Quality is integral to our Corporate Business Principles and embedded in our purpose and values.The end-to-end approach we take to food safety and quality

73、applies to design,delivery andconsumption.We apply international standards and help raise the bar in our industry using rigorous processes and leading scientific techniques.We update our food safety and quality systems to respond to considerations,such as tightening regulations,changes to suppliers

74、or ingredients,introduction of regenerative agriculture practices,new packaging and geopolitical developments.In 2023,our Quality Assurance Centers performed more than 4.1million analytical tests for quality and food safety riskassessment and management.Progressing to net zeroWe are more than halfwa

75、y to our 2025 goal to reduce absolute GHG emissions included in our Net Zero Roadmap and are progressing well.Most of the reductions are due to changes in the way we source raw materials,such as investments in deforestation prevention and regenerative agriculture in our agricultural supply chains.We

76、 have identified more than 80%of the supply chain initiatives needed to hit the 2025 target and are seeking further reductions to reach our planned 50%cut by 2030.For example,through the newly inaugurated Nestl Institute of Agricultural Sciences,our experts are exploring novel approaches in dairy fa

77、rming that have thepotential to reduce GHG emissions in the areas of cow feed and manure management.Helping prevent deforestation plays a major role.By the end of 2023,93.4%of our primary supply chains for cocoa,coffee,meat,palm oil,pulp and paper,soy and sugar were assessed as deforestation-free.Th

78、edecrease from 99.1%in 2022 is due to the inclusion of coffee and cocoa in this indicator for the first time,where deforestation risk has not been assessed for as long.SELECT 2023 RATINGS Nestl Annual Review 202314As of 2023,Nestl has approved near-and long-term science-based emissions reduction tar

79、gets with the Science Based Targets initiative(SBTi).The SBTi has validated Nestls net-zero science-based target by 2050.Promoting regenerative agriculture practices We continue making progress in responsible sourcing,which ensures our raw materials are traceable to point of origin and are farmed us

80、ing methods aligned to our Responsible Sourcing Standard,while progressively delivering benefits to people,nature and climate.We have set requirements for 14priority raw materials:cereals and grains;cocoa;coconut;coffee;dairy;fish and seafood;hazelnuts;meat,poultry and eggs;palm oil;pulp and paper;s

81、oy;spices;sugar;and vegetables.Our aim is for100%of these materials to be responsibly sourced byend of 2030.In 2023,this figure reached 36.2%.Reforestation within or near our sourcing locations is an essential part of decarbonizing our operations and supply chain.Nestl became the first food and beve

82、rage company to pilot Airbuss new Pliades Neo satellites.We are using high-resolution images to monitor trees planted in our sourcing regions to ensure they thrive in thelong term.We continue to expand our regenerative agriculture program across a wider range of raw materials and regions,supporting

83、farmers with training.Our farmer relationship management system collects data for over 250 000farms,helping us track progress on GHGemission reductions and regenerative agriculture practices.Regeneration is important for water resources as well.Over 40water regeneration projects are now underway aro

84、und our water bottling sites.Each one is tailored to local challenges and based on a mix of natural and technical solutions for improving the quality and quantity ofwater available.Implementing our vision for packaging and circularityOur vision remains that none of Nestls packaging ends up in landfi

85、ll or as litter.Our strategy addresses both product design and infrastructure systems for reuse and recycling.By reducing unnecessary packaging,designing better packaging,modeling fair collection systems and supporting good regulation,we aim to support the transition to a waste-free future.Packaging

86、 innovations in 2023 support this transition.Redesigned jars for Malher Bouillon are saving 156tonnes of plastic annually,with a format that is easy to recycle in local systems in Guatemala.In Latin America,Nescaf reduced single-serve sticks packaging,saving 44tonnes ofplastic annually.Innovations t

87、o reach this goal go beyond packaging redesign.In Indonesia,we collaborated with a team of start-ups and retail partners to pilot a reusable and refillable dispenser,and single-serve reusable packaging,for Milo and Koko Krunch brands.Shipping innovations also help.Reusable shipping boxes and reusabl

88、e pallet bands that replace plastic shrink wrap are cutting plastic use by 100tonnes annually in China.We are working with partners on packaging solutions,including a pilot of reusable stainless-steel packaging for Nesquik in over 60German grocery stores.Nestl Annual Review 202315In the UK,Purina Go

89、-Cat cat food and Nestl Original Shredded Wheat cereal contain ingredients sourced from farmers involved with the LENs program.The farms in our supply chains are not isolated they are part of broader landscapes and economies.Only by joining forces with other stakeholders can we address complex issue

90、s,such as deforestation,while advancing regenerative agriculture practices.Nestl has been partnering with others through landscape initiatives that address these issues.Since 2020,a partnership with the Ministry of Water and Forests in Cte dIvoire and the Earthworm Foundation has led to a significan

91、t reduction in deforestation,as well as the reforestation of almost 1500hectares in the Cavally Forest Reserve.In 2023,the Cavally project entered a new phase with additional partners to achieve greater impact.To help scale landscape initiatives,Nestl supports Landscape Enterprise Networks(LENs)in t

92、he UK and Europe.LENs brings together organizations that need nature-based solutions with the farmers who can provide them.In the East of England,Purina and Nestl Cereal Partners UK are working with water companies and local authorities to fund the introduction of nature-based solutions.Over 60farme

93、rs and land managers will implement these solutions across morethan 10 000hectares of land.In 2023,we also supported sustainable landscape initiatives in Brazil,Chile and Malaysia.We are also active in numerous landscape initiatives developed by our palm oil suppliers and partners in different parts

94、 of Indonesia.IN FIGURESMichele ZollingerClimate Forest Lead,Global Reforestation ProgramUnited States15landscape initiatives supported in 2023OUR VOICES“Working at a landscape level can offer various benefits for biodiversity,water stewardship,climate change,human rights and resilient livelihoods.”

95、Looking at the whole landscapeNestl Annual Review 202316Our broad portfolio of trusted and loved brands are enjoyed by people around the world.Connecting through our brandsPetCarePage 20Powdered and Liquid BeveragesPage 18Nutrition and Health SciencePage 22Nestl Annual Review 202317ConfectioneryPage

96、 28WaterPage 30Milk products and Ice creamPage 26Prepared dishes and cooking aidsPage 24Nestl Annual Review 202318At a glance24.8Sales(in CHFbillion)20.7%UTOP margin26.7%Percentage of Nestls salesOur Powdered and Liquid Beverages category includes our coffee,cocoa and malt beverage businesses.This c

97、ategory features iconic coffee brands Nescaf,Nespresso and Starbucks,plus the worlds most popular chocolate malt beverage,Milo.powdered and liquid beverages Perfecting the worlds favorite beveragesNescaf Dolce Gusto NeoPiloted in Brazil and now launched in France and Switzerland,Neo is the next gene

98、ration of Nescaf Dolce Gusto coffee systems,combining unique brewing technologies,connectivity and sustainability.Nescaf Ice RoastLaunched in Mexico and China,Nescaf Ice Roast is Nescafs first soluble coffee specially crafted to enjoy with cold water or milk over ice,catering to the growing number o

99、f cold-coffee lovers.Nespresso A pioneer of high-quality,sustainable coffee,Nespresso launched its first paper-based home and industrial compostable capsule in France and Switzerland,compatible with Nespresso Original machines.MiloMilo has strong growth momentum in Malaysia,thanks to a reignited gra

100、ssroots sports program and the implementation of Nestls sugar-reduction technology that reduces sugar while preserving taste.Nestl Annual Review 202319Nescaf has been introducing the globally loved coffee experience to Indian consumers.It is playing a lead role in developing at-home consumption of c

101、offee in a country known for its traditional preference for tea.Nescaf is leading both the creation of the coffee category and the market in India.The brand has introduced its coffee to more than 30million Indian households in the past seven years.Nescaf is particularly focused on growing the coffee

102、 culture among Indian youth,establishing the role ofcoffee in their lives.Manufactured at the state-of-the-art Nanjangud roastery,Nescaf roasts Indian green coffee beans,tailoring the final product to cater to local taste preferences.Thanks to strategic positioning,Nescaf is increasingly available a

103、nd easily accessible across the country in threemillion retailoutlets.By investing in product quality and consistently communicating the relevance of coffee,Nescaf has captured the attention and loyalty of its target audience,recruiting non-coffee drinkers to choose coffee as their beverage of choic

104、e.Alongside these efforts to bring coffee culture to India,Nescaf is backing its Nescaf Plan 2030 with actions on the ground.It is helping ensure that the entire value chain of coffee is sustainable as well associally and economically inclusive.IN FIGURES10 millionIndian households introduced to cof

105、fee in 2023The Nescaf Plan 2030 is helping communities transition to regenerative agriculture and improve livelihoods,positively impacting 4900Indian coffee farmers.Sunayan MitraCoffee&Beverages DirectorIndiaOUR VOICES“Nescaf is on an exciting journey in India,poised to further strengthen its positi

106、on as a leader,driving both consumer delight and sustainable impact.”Building Indias coffee cultureNestl Annual Review 202320petcare Caring for pets and peopleAt a glance18.9Sales(in CHFbillion)20.7%UTOP margin20.3%Percentage of Nestls salesOur PetCare business delivers life-changing nutrition for p

107、ets that helps them thrive.Purina is guided by science and driven by passion to enrich the lives of pets,the people who love them and the planet we all share.Purina Dog Chow The new product line boasts exciting protein combinations and innovative kibble textures,all fortified with Purinas proprietar

108、y EXTRAlife,providing dogs with excellent nutrition and delicious taste.Purina Pro Plan Veterinary DietsThe new OM Metabolic Response+Joint Mobility is specially formulated to help dogs lose fat while maintaining muscle,with long-chain omega-3 fatty acids plus glucosamine to help support joint healt

109、h.Purina Pro Plan Vital SystemsPurina Pro Plan Vital Systems 4-in-1 cat food formulas proactively support major systems of health such as kidneys,brain,digestion and immunity with meat or fish always the first ingredient.Purina One DualNaturePurina One DualNature,Purinas first carbon-reduced range,h

110、as cut the carbon footprint of its products by 15.7%since 2019 by optimizing recipes,manufacturing methods,packaging and logistics.Nestl Annual Review 202321IN FIGURESPet owners are increasingly choosing to customize their pets nutrition with supplements,toppers and snacks that cater to their pets i

111、ndividual needs.Purina is responding to this shift in consumer habits with additional health-focused nutrition options.Purina Pro Plan Veterinary Supplements are specialized supplements for dogs and cats,designed to support their health and address specific conditions.Digestive disorders are common

112、health issues for pets,varying from minor upset stomachs to more severe gastrointestinal problems or food allergies.Purina Pro Plan Veterinary Supplements FortiFlora is the#1 U.S.recommended probiotic by veterinarians.It is a proprietary probiotic supplement that supports digestive health and helps

113、improve stool quality in dogs and cats.Water is crucial for cats,just like it is for humans.Many cats dislike drinking water especially still or stagnant water which can lead to dehydration.Purina Pro Plan Hydra Care addresses this,offering nutrient-enriched water for cats.It contains osmolytes that

114、 help cats absorb water at a cellular level,ensuring they stay hydrated.Like humans,dogs can experience anxiety,which varies across breeds andindividuals.Purina Pro Plan Veterinary Supplements Calming Care includes a proprietary probiotic strain shown to help dogs and cats manage stress and maintain

115、 calm behavior.Brittany Vester BolerGlobal Nutrition Director,Nestl Purina R&DUnited StatesOUR VOICES“Science and nutrition are the foundation of long-term health and the starting point to an amazing life for pets and their owners.”Leading the way with pet supplements22.6%organic growth for Purina P

116、ro Plan Veterinary Supplements in 2023Purina innovates supplements scientifically designed to support various needs,including digestion,immunity,hydration,joint health and calmer behavior.Nestl Annual Review 202322At a glance15.3Sales(in CHFbillion)18.5%UTOP margin16.4%Percentage of Nestls salesnutr

117、ition and health science Optimizing health through nutritionOur nutrition business provides science-based products and solutions for mothers,babies and children.Our Nestl Health Science business supports healthier lives by offering an extensive portfolio of science-based consumer care and medical nu

118、trition.NAN Supreme ProThe new NAN Supreme Pro is now made with Sinergity,a proprietary blend of six age-adapted HMOs and precision probiotic B.infantis,to synergistically support infant immunity and gut health.Vitaflo PKU sphereVitaflo PKU sphere helps people with phenylketonuria(PKU)manage their d

119、iets with the most advanced nutrition system alongside superior taste,now in a ready-to-drink format and two new flavors.Gerber Popped CrispsLeveraging the goodness of grains and plant protein,this new healthy snack in the China market was created with taste,texture and nutrition ideal for children

120、three years and up.BOOST Glucose ControlNow available at Costco in the United States,BOOST Glucose Control is clinically shown to produce a lower blood sugar response versus a standard nutritional drink inpeople with type2 diabetes.Nestl Annual Review 202323A collaboration between Nestl and the Bang

121、ladesh Council of Scientific and Industrial Research(BCSIR)has resulted in a groundbreaking product to help combat malnutrition in young children in Bangladesh.A significant percentage of Bangladeshi children under the age of 5years suffer from various micronutrient deficiencies.In collaboration wit

122、h BCSIR,Nestl Bangladesh developed a cereal-based fortifier,Cerelac Pushtimix(pushtimix means mix of nutrients in Bangla)to address these deficiencies.Specifically designed to cater to the nutritional needs of Bangladeshi children aged 6to60 months,Cerelac Pushtimix is fortified with 11vitamins,5min

123、erals and probiotic B.lactis.Cerelac Pushtimix was designed to give parents a simple,accessible format to help combat malnutrition in their young children.Developed as aconvenient powder,consumers can easily sprinkle it on homemade foods.The aim is to make it accessible to all children,including tho

124、se in rural areas,thanks toits affordable price point ofBDT5(less than 5Swiss centimes)per5gsachet.In 2023,Nestl Bangladesh was honored with the prestigious SDG Brand Champion Award in Sustainable Partnerships&Institutions.The Bangladesh Brand Forum,in collaboration with the Global Compact Network B

125、angladesh,bestowed this award in recognition for this successful collaborations support for the UN Sustainable Development Goals(SDGs).4.4 millionCerelac Pushtimix sachets sold in 2023IN FIGURESThe single-dose sachets of micronutrient powder can easily be sprinkled on homemade food like rice,semolin

126、a or khichuri to combat malnutrition.Hafizul IslamBEO NutritionBangladeshOUR VOICES“This innovation will help empower the nation to eliminate malnutrition while increasing the Nestl footprint across Bangladeshi households.”Addressing childhood nutrition deficiencyNestl Annual Review 202324prepared d

127、ishes and cooking aids Advancing delicious and nutritious foodAt a glance11.7Sales(in CHFbillion)18.3%UTOP margin12.5%Percentage of Nestls salesOur prepared dishes and cooking aids category provides daily essentials,including bouillons,chilled culinary products,and frozen food and pizzas.Iconic bran

128、ds such as Maggi,Stouffers and DiGiorno cater to regional and local tastes.Totole Recipe Solutions The expanded Totole Recipe Solutions range in China added four new single-portion options thatspecifically cater to one-person households and independent mealtimes.Maggi Veg The new Maggi Veg line in C

129、hile and Germany gives consumers shelf-stable options for wholesome and tasty plant-based solutions that are a good source of protein and fiber.Maggi Air FryerThe new Maggi Air Fryer seasoned coating range in Australia enables consumers to make easy,delicious,home-cooked meals in their air fryer,a c

130、ooking appliance that is gaining in popularity.Lean Cuisine Balance BowlsNew tasty and nutritious Lean Cuisine Balance Bowls are the first meals to meet the American Diabetes Association frozen entre nutrition guidelines,helpingpeople manage blood sugar levels.Nestl Annual Review 202325Building on M

131、yMenu IQ,available in over 30countries to give consumers nutritional scores of meals,Poland added an extra tool for assessing meal affordability.Consumers worldwide want food that tastes great while providing thenutrition they need,all within their budgets.To address this challenge,Nestl is constant

132、ly developing products that are delicious,affordable and nutritious.Plant-based meals can offer quality nutrition,including protein,and many consumers are interested in trying these.In Italy,Garden Gourmet is enabling more families to access plant-based products at an attractive price point.The tast

133、y Garden Gourmet 99kcal Miniburger,for example,is made with quinoa,bulgur,carrots and broccoli.Nestl uses its innovation expertise to give consumers affordable and nutritious products they can use in their favorite recipes.In 2023,Nestl launched Maggi Soya Chunks,which offers Nigerian consumers a ta

134、sty meat alternative for rice,stews and pasta.Not only does this provide a convenient and affordable way to deliver the flavor of meat at a fraction of the cost,Maggi Soya Chunks also provides a nutritious source of protein,iron and zinc.Nestl continues to create new options that provide quality pro

135、tein through grains.As part of the International Year of Millets 2023,we launched Maggi Nutri-licious Masala Oats Noodles with Millet Magic.This product leverages the power of these ancient grains to bring protein and fiber to Indian consumers in one of their favorite meals.Increasing access to qual

136、ity mealsShivani HegdeGlobal Category Leader,Affordable NutritionSwitzerlandOUR VOICES“We innovate to support consumers in creating affordable,delicious and nutritious meals every day.”IN FIGURES12.6%organic growth for affordable nutrition food products in 2023Nestl Annual Review 202326milk products

137、 and ice cream Responding to evolving preferencesAt a glance11.0Sales(in CHFbillion)24.5%UTOP margin11.8%Percentage of Nestls salesOur milk products business delivers nutritional products for all stages of life,ambient dairy,plant-based alternatives and coffee creamers.Our ice cream business offers

138、a variety of special treats.KitKat PinkLaunched in Malaysia with plans for global rollout,the new KitKat Pink strawberry cheesecake-flavored ice cream bar is successfully addressing rising demand for unique cross-category brand extension.Yiyang JiaHengThe new Yiyang JiaHeng milk powder supports heal

139、thy aging in China by delivering comprehensive nutrition for seniors in each serving,helping to maintain immunity,mobility and cardiovascular health.Starbucks Vanilla CreamerInspired by the popular Starbucks Vanilla Latte served at Starbucks stores,this highly anticipated launch continues to support

140、 the growing demand for Starbucks coffee enhancers in the U.S.market.Nido Milk&Soya Nido Milk&Soya offers an affordable nutrition solution to consumers in Nigeria thanks to a new milk powder fortified with iron that is made from both dairy and soy,providing high quality protein.Nestl Annual Review 2

141、02327IN FIGURESBarbara SolleroSustainable Agriculture ManagerBrazilNinho,together with thousands of milk-producing families,delivers nutrition that supports a better future for over 38million Brazilian children.In support of a bright tomorrow,Nestl is incentivizing Brazilian dairy farmers to protect

142、 and restore natural resources by adopting sustainable farming measures.The Nature por Ninho program trains and incentivizes farmers to adopt regenerative agriculture practices that result in lower carbon emissions and increased carbon sequestration.By adopting practices,such as water conservation,m

143、anure and waste management,minimum cultivation and soil cover,crop rotation and better animal welfare practices,dairy farmers can enable sustainable farming for generations to come.Farmers in the program can engage in three levels of regenerative agriculture practices:bronze,silver and gold.For each

144、 level,the farmer receives an extra bonus in pay per liter of milk.At the end of 2023,179Nature por Ninho farms were in the gold category,supplying 17million liters of milk per month.In 2023,the Ninho team embarked on a mission to communicate these best farming practices to consumers,sharing progres

145、s on three pillars:animal welfare,soil and water.Through nationwide communication,including Ninho Forti+commemorative packs,millions of Brazilian consumers are learning about the difference that comes from the farm.OUR VOICES“By 2025,our aim is to have 30%of the Brazilian milk in our supply chain co

146、ming from gold-category dairy farms.”Bringing regeneration to the tableVisits from Nestls Regenera technicians,a WhatsApp farmer community and monthly YouTube sessions empower farmers to improve sustainability.11 400 acres of dairy farms now utilizing regenerative agriculture practices in BrazilNest

147、l Annual Review 202328Our confectionery business includes the iconic KitKat brand and a portfolio of much-loved regional and local brands.The business innovates to create great tasting chocolate products and nutritious snacks.confectionery Delighting consumers with tasty snacksNestl Choco TrioOur le

148、ading chocolate heartland brand in Latin America is now expanding to capture the Chocobakery opportunity,bringing together chocolate tablets and biscuits,with a winning,value-up innovation.Aero TruffleAs the leading aerated tablet brand in Canada,Aero is now expanding its offering with a new range o

149、f Aero Truffle indulgent dessert-inspired flavors like Black Forest,Salted Caramel and Tiramisu.Nestl Damak Nestl Damak,a leading heritage brand in Trkiye,has invested over a decade in a sustainable pistachio program in Gaziantep that promotes responsible farming practices and benefits communities.A

150、t a glance8.1Sales(in CHFbillion)16.8%UTOP margin8.7%Percentage of Nestls salesKitKat MiloFollowing on the heels of the rollout of the most successful cross-brand collaboration in Australia that brings together two popular and distinctive brands,KitKat Milo has now also been launched in Japan.Nestl

151、Annual Review 202329IN FIGURESThe KitKat“Breaks for Good”packs include a QR code so consumers can discover moreabout the school enrollment pillar ofourincome accelerator program.160 000 cocoa-farming families planned to be supported by the program by 2030Darrell HighHead Nestl Cocoa PlanSwitzerlandO

152、UR VOICES“We are confident that as the program scales,we will see a measurable impact on cocoa farmers incomes andan improvement inthelives of children.”Our income accelerator program aims to improve the livelihoods of cocoa-farming families and tackle child labor risks in cocoa production,while adv

153、ancing sustainable farming practices.Now,cocoa from the program has found its way to KitKat.The program incentivizes and encourages change in cocoa-farming families through a cash incentive paid directly to them through mobile money.It supports four areas:child education,good agricultural practices(

154、GAP),agroforestry and diversified incomes.Since the launch in 2022,the program has benefited 10 000cocoa-farming families in Cte dIvoire.It will expand to include Ghana in 2024.Initial results from a report by third-party KIT Royal Tropical Institute are promising,while also informing program improv

155、ements.Pruning has increased cocoa farm productivity by more than 20%,on average.School enrollment rates have risen by 8%,reaching 83%.Women are more involved in decision-making,which has improved the allocation of family resources.Cash incentives are primarily used where it matters most,first and f

156、oremost for schooling.We are also putting into practice our ambition to fully segregate our cocoa ingredients.In late 2023,KitKat factories in Hamburg,Germany,and Sofia,Bulgaria,started using 100%segregated chocolate mass from the income accelerator program.We will expand segregation in KitKat facto

157、ries to most of Europe by early 2024.Supporting breaks for goodNestl Annual Review 202330waterOffering more than hydrationOur water business is dedicated to providing healthy hydration and enhancing quality of life while contributing to a sustainable future.The strategic focus is on international pr

158、emium mineral water brands as well as healthy beverages.At a glance3.3Sales(in CHFbillion)10.6%UTOP margin3.6%Percentage of Nestls salesPERRIER+STARCKAs Perrier celebrates its 160thanniversary,the brand continues to captivate with the launch of a new limited edition of the iconic glass bottle redesi

159、gned by visionary creator Philippe Starck.Vittel+Following the successful launch of Vittel+Immunity with zinc in 2022,the brand expanded this functional range with two new benefits:Active with B vitamins and Recharge with magnesium.S.Pellegrino EssenzaS.Pellegrino Essenza successfully rolled out its

160、 vibrant Mediterranean blends range in France,seizing the momentum of the fast-growing flavored sparkling waters market.Nestl Pure LifeNestl Pure Life unveiled a new portfolio architecture design,inspired by the ripples effect,to help consumers navigate across the range while enhancing brand uniquen

161、ess and impact on shelf.Nestl Annual Review 202331Sanpellegrinos editorial digital platform,Fine Dining Lovers,inspires with interviews,stories,recipes and videos about responsible gastronomy.Sanpellegrino aims to nurture the art of tasteful living,today and for generations to come.This purpose is e

162、mbodied by our initiatives to support future gastronomic talent,responsible fine dining and fine drinking,and protection of nature.To nurture the future of gastronomy,the S.Pellegrino Young Chef Academy connects talented young chefs across the globe with influential members ofthe gastronomic world f

163、or education,mentoring,networking and career opportunities.Every other year,it hosts the S.Pellegrino Young Chef Academy competition to discover new talents and inspire the next generation of culinary game changers.We are partnering with Food for Soul to inspire a culture of responsible dining.Found

164、ed by renowned chef Massimo Bottura and Lara Gilmore,Food for Soul aims to prevent food waste while encouraging a healthy and equitable food system.Together,we launched the WhyWaste?initiative to foster awareness and inspire consumers and chefs through our Fine Dining Lovers platform as well as thro

165、ugh courses offered to S.Pellegrino Young Chef Academy members.We are also dedicated to protecting the source of taste by managing water resources sustainably and respecting the environment.Our Acqua Panna and S.Pellegrino plants are already certified to the Alliance forWater Stewardship(AWS)Standar

166、d.By 2025,we aim to create a positive water impact everywhere we operate.Nurturing the art of tasteful livingIN FIGURESOUR VOICES“We are pleased with the popularity of the S.Pellegrino Young Chef Academy,helping us build a strong global network of next generation culinary talent.”2000chefs represent

167、ing 50nationalities belong to the S.Pellegrino Young Chef Academy communityStefano BologneseSanpellegrino International Business Unit DirectorItaly32Nestl Annual Review 2023Financial reviewNestl Annual Review 202333Key figures(consolidated)In millions of CHF(except for data per share and employees)2

168、0222023Results Sales 94 424 92 998 Underlying trading operating profit(a)16 103 16 053 as%of sales 17.1%17.3%Trading operating profit(a)13 195 14 520 as%of sales 14.0%15.6%Profit for the year attributable to shareholders of the parent(Net profit)9 270 11 209 as%of sales 9.8%12.1%Balance sheet and Ca

169、sh flow statementTotal Equity42 792 36 387 Net financial debt(a)48 159 49 638 Ratio of net financial debt to total equity(gearing)112.5%136.4%Operating cash flow 11 907 15 941 as%of net financial debt24.7%32.1%Free cash flow(a)6 570 10 403 Capital additions 8 264 7 159 as%of sales 8.8%7.7%Data per s

170、hareWeighted average number of shares outstanding(in millions of units)2 707 2 646 Basic earnings per share CHF3.424.24Underlying earnings per share(a)CHF4.804.80Dividend as proposed by the Board of Directors of Nestl S.A.CHF2.953.00Market capitalization,end December 285 865 255 604 Number of employ

171、ees(in thousands)275 270 Principal key figures(b)(illustrative)in CHF,USD,EURIn millions(except for data per share)Total CHFTotal CHFTotal USDTotal USDTotal EURTotal EUR202220232022202320222023Sales 94 424 92 998 98 772 103 584 94 010 95 730 Underlying trading operating profit(a)16 103 16 053 16 845

172、 17 880 16 033 16 525 Trading operating profit(a)13 195 14 520 13 802 16 173 13 137 14 947 Profit for the year attributable to shareholders of the parent(Net profit)9 270 11 209 9 697 12 485 9 230 11 539 Total Equity 42 792 36 387 46 281 43 245 43 444 39 081 Market capitalization,end December 285 86

173、5 255 604 309 177 303 784 290 225 274 532 Data per shareBasic earnings per share 3.424.243.584.723.414.36(a)Certain financial performance measures are not defined by IFRS Accounting Standards.For further details,see Foreword on page 34.(b)Income statement figures translated at weighted average annua

174、l rate;Balance sheet figures at year-end rate.Nestl Annual Review 202334Group overviewForewordThe Financial review contains certain financial performance measures,that are not defined by IFRS Accounting Standards(thereafter“IFRS”),that are used by management to assess the financial and operational p

175、erformance of the Group.They include among others:Organic growth,Real internal growth and Pricing;Underlying trading operating profit margin and Trading operating profit margin;Net financial debt;Free cash flow;and Underlying earnings per share(EPS)and EPS in constant currency.Management believes th

176、at these non-IFRS financial performance measures provide useful information regarding the Groups financial and operating performance.The Alternative Performance Measures document published under defines these non-IFRS financial performance measures.Group salesOrganic growth was 7.2%.Pricing was 7.5%

177、,reflecting cost inflation over the last two years.RIGwas 0.3%,impacted by soft consumer demand,capacity constraints and a temporary supply disruption for vitamins,minerals and supplements in the second half.As expected,RIG turned positive in both the fourth quarter and the second half,supported by

178、the benefits from portfolio optimization,improving customer service levels and increased brand support.Growth was broad-based across most geographies and categories.In developed markets,organic growth was 6.4%,led by pricing with negative RIG.In emerging markets,organic growth was 8.4%,driven by pri

179、cing and positiveRIG.By product category,Purina PetCare was the largest contributor to organic growth,with strong momentum across all channels.Purina ONE,Purina Pro Plan and Friskies all recorded double-digit growth.Sales of Purina Pro Plan reached almost CHF 3 billion.Coffee saw high single-digit g

180、rowth,with positive sales developments across brands,supported by strong demand in out-of-home channels.Infant Nutrition posted high single-digit growth,based on continued momentum for premium infant formula,including human milk oligosaccharides(HMOs)products as well as specialty formulas.Dairy repo

181、rted mid single-digit growth,led by fortified milks,coffee creamers and home-baking products.Confectionery recorded high single-digit growth,fueled by continued double-digit growth for KitKat.Prepared dishes and cooking aids posted mid single-digit growth,with robust demand for Maggi across geograph

182、ies and segments.Water posted mid single-digit growth,led by S.Pellegrino and Acqua Panna.Nestl Health Science recorded low single-digit growth,as continued strong momentum for Medical Nutrition was partly offset by temporary supply constraints in vitamins,minerals and supplements.Nestl Annual Revie

183、w 202335By channel,organic growth in retail sales remained robust at 6.5%.E-commerce sales grewby 13.4%,reaching 17.1%of total Group sales.Organic growth of out-of-home channels was 15.9%.Net divestitures decreased sales by 0.9%,largely related to the divestment of a majority stake in Freshly as wel

184、l as the disposal of the Gerber Good Start infant formula brand in 2022.The impact on sales from foreign exchange was negative at 7.8%,following significant and broad-based appreciation of the Swiss franc.Total reported sales decreased by 1.5%to CHF93.0billion.Sales by geographic areasDifferences 20

185、23/2022(in%)in CHFin local currencyin CHF millionsBy principal markets2023North America 1.4%(a)32 553 United States 0.9%+5.5%30 034 Canada 6.2%+3.5%2 519 Europe0.0%(a)22 291 France 0.3%+3.0%3 546 United Kingdom+3.5%+9.0%3 529 Germany 4.5%1.3%2 212 Other markets of geographic area 0.0%(a)13 004 of wh

186、ich Switzerland 0.8%0.8%1 101 Asia,Oceania and Africa 5.2%(a)19 870 Philippines+0.4%+9.0%2 677 India+1.7%+13.6%1 993 Australia 4.0%+6.7%1 450 Other markets of geographic area 7.3%(a)13 750 Latin America+3.5%(a)12 760 Brazil+10.0%+13.4%4 131 Mexico+13.9%+6.8%3 937 Chile+0.7%+3.1%1 312 Other markets o

187、f geographic area 11.2%(a)3 380 Greater China 5.5%(a)5 524 Greater China 5.5%+5.2%5 524 Total 1.5%(a)92 998(a)Not applicable.Nestl Annual Review 202336Underlying trading operating profitThe underlying trading operating profit margin increased by 20basis points to 17.3%on a reportedbasis and by 40bas

188、is points in constant currency.Underlying trading operating profit decreased by 0.3%to CHF16.1billion,due to currency appreciation.Gross profit margin increased by 70basis points to 45.9%.Pricing,cost efficiencies and portfolio optimization more than offset significant cost inflation.Distribution co

189、sts as a percentage of sales decreased by 60basis points to 8.3%of sales,mainly as a result of lower freight and energy costs.Marketing and administration expenses as a percentage of sales were 18.9%.Within this line item,advertising and marketing expenses were 7.7%of sales,an increase of 80basis po

190、ints compared to the prior year.Restructuring and net other trading items decreased from CHF2.9billion to CHF1.5billion,reflecting one-off items in the prior year,particularly asset impairments.As a result,trading operating profit increased by 10.0%to CHF14.5billion.The trading operating profit marg

191、in reached 15.6%,anincrease of 160basis points on a reported basis and 190basis points inconstant currency.Zone NA Zone EUR Zone AOA Zone LATAM Zone GC Nestl Health Science NespressoUnderlying trading operating profit by operating segmentIn%of salesTrading operating profitby operating segmentIn%of s

192、alesUnderlying trading operating profit and Trading operating profitIn millions of CHF In%of sales Underlying trading operating profit Trading operating profit202220222023202323.5%16.4%22.2%20.7%16.5%22.5%14.1%21.3%19.2%9.3%20.3%12.0%20.1%10.3%16 10317.1%17.3%16 05313 19514 52014.0%15.6%Nestl Annual

193、 Review 202337Net financial expenses and Income taxNet financial expenses increased to CHF1.4billion,reflecting an increase in interest rates and a higher level of average net debt.The average cost of net debt was 2.5%compared to 2.2%in 2022.The Group reported tax rate decreased by 600basis points t

194、o 18.2%as a result of one-off items.The underlying tax rate increased by 30basis points to 21.2%,mainly due to the geographic and business mix.Net profit and Earnings per shareNet profit increased by 20.9%to CHF11.2billion.Net profit margin increased by 230basis points to 12.1%on a reported basis an

195、d by 240basis points in constant currency.The increase was mainly due to lower asset impairments,a decrease in reported taxes and higher income from associates.As a result,earnings per share increased by 23.7%to CHF4.24 on a reported basis.Underlying earnings per share increased by 8.4%in constant c

196、urrency and by 0.1%on a reported basis to CHF4.80.The increase was mainly the result of strong organic growth and improved underlying trading operating profit margin.Nestls share buyback program contributed 1.2%to theunderlying earnings per share increase,net offinance costs.Cash flowFree cash flow

197、increased to CHF10.4billion from CHF6.6billion,mainly due to lower inventory levels.20222023Earnings per shareIn CHF15.911.94.243.4220222023Operating cash flowIn billions of CHF100%75%50%25%0%Share capital by investor type,long-term evolution(a)20192023(a)Percentage derived from total number of regi

198、stered shares.Registered shares represent 45.2%of the total share capital.Statistics are rounded,as at 12/31/2023.201520112007Private Shareholders 25%Institutions 75%125.00120.00115.00110.00105.00100.0095.00|Evolution of the Nestl S.A.share in 2023In CHF Nestl S.A.share Nestl relative to Swiss Marke

199、t Index 3%0%3%6%9%12%15%JFMAMJJASONDNestl Annual Review 202338DividendAt the Annual General Meeting on April18,2024,the Board of Directors will propose a dividend of CHF3.00 per share,an increase of 5centimes.If approved,this will be the companys 29th consecutive annual dividend increase.The company

200、 has maintained or increased its dividend in Swiss francs over the last 64years.Nestl is committed tomaintaining this long-held practice of increasing the dividend in Swiss francs every year.The last trading day with entitlement to receive the dividend will be April19,2024.The net dividend will be p

201、ayable as from April24,2024.Shareholders entered in the share register with voting rights on April11,2024,at 12:00 noon(CEST),will be entitled to exercise their voting rights.Share buyback programIn 2023,the Group repurchased CHF5.0billion of Nestl shares as part of the three-year CHF20billion share

202、 buyback program,which began in January 2022.At the upcoming Annual General Meeting,the Board of Directors will propose a reduction of the share capital of 50million shares from CHF267million to CHF262million,through the cancellation of shares purchased as part of the share buyback program.Net debtN

203、et debt was CHF49.6billion as at December31,2023,compared to CHF48.2billion at December31,2022.The increase largely reflected the dividend payment of CHF7.8billion and share buybacks of CHF5.1billion.Return on invested capital(ROIC)The Groups ROIC was 13.9%,up by 170basis points.Portfolio management

204、 Effective September1,2023,Nestl and private equity firm PAI Partners completed the transaction to create a joint venture for Nestls frozen pizza business in Europe.Nestl retains a non-controlling stake with equal voting rights alongside PAI Partners,remaining invested in this business and participa

205、ting in future growth and value creation in the category.On September4,2023,Nestl divested Palforzia,its peanut allergy treatment business,to Stallergenes Greer,a biopharmaceutical company that specializes in the diagnosis and treatment of allergies.The transaction was closed upon signing.On Septemb

206、er7,2023,Nestl announced an agreement with Advent International to acquire a majority stake in Grupo CRM,a premium chocolate player in Brazil.The transaction is expected to close in 2024,subject to customary regulatory approvals.Dividend per shareIn CHF2.702.752002220232.803.002.95Nestl A

207、nnual Review 202339Nestl Waters OperationsFollowing a transformation plan in France,Nestl is reviewing operating practices in its natural mineral water operations in several countries.With food safety as a primary goal,practices at some of its production sites may not be in line with the applicable

208、regulatory framework.Nestl regrets the situation and is currently engaging with the relevant authorities to ensure that its operating practices are fully compliant.The company emphasizes that its water products have always been,and remain,safe to drink.Inaddition,the unique mineral composition of it

209、s natural mineral water brands has always been consistent with the label.Outlook2024 outlook:we expect organic sales growth around 4%and a moderate increase in the underlying trading operating profit margin.Underlying earnings per share in constant currency is expected to increase between 6%and 10%.

210、2025 mid-term targets fully confirmed:mid single-digit organic sales growth and an underlying trading operating profit margin range of 17.5%to 18.5%by 2025.Underlying earnings per share in constant currency to increase between 6%and 10%.Sales,employees and factories by geographic areaSalesEmployeesF

211、actories202220232022202320222023NA34.9%35.0%14.3%14.5%57 56 EUR(a)23.6%24.0%28.7%28.6%99 96 AOA22.2%21.4%26.2%26.0%100 100 LATAM13.1%13.7%21.9%22.1%65 65 GC6.2%5.9%8.9%8.8%23 23(a)8304 employees in Switzerland in 2023.Employees by activityIn thousands20222023Factories 140134 Administration and sales

212、135136 Total275270 Nestl Annual Review 202340In millions of CHF20222023Proportion of total sales(%)RIG(%)OG(%)Powdered and Liquid BeveragesSoluble coffee/coffee systems16 891 16 648 67.2%Other8 327 8 138 32.8%Total sales25 218 24 786 0.0%+6.4%Underlying trading operating profit 5 593 5 130 20.7%Trad

213、ing operating profit 5 358 4 945 20.0%WaterTotal sales3 536 3 320 5.1%+4.9%Underlying trading operating profit 277 351 10.6%Trading operating profit 241 161 4.8%Milk products and Ice creamMilk products10 359 10 092 91.9%Ice cream930 889 8.1%Total sales11 289 10 981 1.6%+6.1%Underlying trading operat

214、ing profit 2 568 2 688 24.5%Trading operating profit 2 508 2 601 23.7%Nutrition and Health ScienceTotal sales15 678 15 278 1.6%+5.4%Underlying trading operating profit 2 990 2 831 18.5%Trading operating profit 1 323 2 291 15.0%Prepared dishes and cooking aidsFrozen and chilled5 859 5 095 43.7%Culina

215、ry and other6 625 6 571 56.3%Total sales12 484 11 666 2.5%+4.9%Underlying trading operating profit 2 038 2 136 18.3%Trading operating profit 1 508 1 849 15.8%ConfectioneryChocolate6 139 6 208 76.6%Sugar confectionery661 676 8.3%Snacking and biscuits1 318 1 223 15.1%Total sales8 118 8 107+1.5%+8.5%Un

216、derlying trading operating profit 1 364 1 364 16.8%Trading operating profit 1 259 1 231 15.2%PetCareTotal sales18 101 18 860+2.8%+12.1%Underlying trading operating profit 3 706 3 912 20.7%Trading operating profit 3 494 3 862 20.5%Product category and operating segment reviewNestl Annual Review 20234

217、1Review of Zones,Nestl Health Science and NespressoZone North America(NA)7.3%organic growth:0.3%RIG;7.6%pricing.The Zones underlying trading operating profit margin increased by 120basis points to 22.2%.Organic growth was 7.3%,with pricing of 7.6%.RIGwas 0.3%,reflecting soft consumer demand,capacity

218、 constraints and the winding down of the frozen meals and pizza business in Canada.RIGturned positive in the fourth quarter.Net divestitures reduced sales by 1.7%,as a result of the divestment of a majority stake in Freshly as well as the disposal of the Gerber Good Start infant formula brand in 202

219、2.Foreign exchange had a negative impact of 6.8%.Reported sales in Zone North America decreased by 1.3%to CHF26.0billion.Growth in Zone North America was broad-based,driven by pricing as well as continued strong momentum for e-commerce and out-of-home channels.The Zone saw market share gains in pet

220、food,coffee and frozen meals.By product category,Purina PetCare was the largest growth contributor,with broad-based demand across segments,channels and brands,particularly Purina ONE,Purina Pro Plan and Friskies.Sales for Nestl Professional and Starbucks out-of-home continued to grow at a double-dig

221、it rate,led by new customer acquisition.The beverages category,including Starbucks products,Coffee mate and Nescaf,posted mid single-digit growth.Nido growing-up milks posted strong double-digit growth.Confectionery in Canada recorded high single-digit growth,driven by KitKat and Aero.Water saw low

222、single-digit growth,based on a strong sales development in the fourth quarter.S.Pellegrino and Acqua Panna posted double-digit growth,which more than offset the impact of capacity constraints for Perrier.Growth in frozen food was negative,impacted by soft consumer demand and Zone NA In millions of C

223、HF20222023Proportion of total sales(%)RIG(%)OG(%)United States and Canada26 328 25 995 Powdered and Liquid Beverages3 891 3 892 15.0%Water1 042 990 3.8%Milk products and Ice cream3 143 3 065 11.8%Prepared dishes and cooking aids5 328 4 790 18.4%Confectionery696 682 2.6%PetCare10 926 11 504 44.3%Nutr

224、ition and Health Science1 302 1 072 4.1%Total sales26 328 25 995 0.3%+7.3%Underlying trading operating profit 5 528 5 768 22.2%Trading operating profit 4 904 5 546 21.3%Capital additions2 272 2 401 9.2%SalesCHF 26.0 billionOrganic growth+7.3%Real internal growth 0.3%Underlying trading operating prof

225、it margin22.2%Underlying trading operating profit margin+120 basis pointsTrading operating profit margin21.3%Trading operating profit margin+270 basis pointsNestl Annual Review 202342the winding down of the frozen meals and pizza business in Canada.In the U.S.,growth in frozen food was close to flat

226、,supported by Stouffers,Jacks and Tombstone.The Zones underlying trading operating profit margin increased by 120basis points,mainly as a result of the divestment of a majority stake in Freshly and portfolio optimization actions.Pricing and mix also helped to offset cost inflation and a significant

227、increase in advertising and marketing expenses.8.2%organic growth:2.4%RIG;10.6%pricing.The Zones underlying trading operating profit margin was unchanged at 16.4%.Organic growth was 8.2%,with pricing of 10.6%.RIG was 2.4%,reflecting demand elasticity and capacity constraints.Foreign exchange negativ

228、ely impacted sales by 4.9%.Net divestitures reduced sales by 3.4%.Reported sales in Zone Europe decreased by 0.2%to CHF19.1billion.Growth in Zone Europe was supported by pricing,strong sales development for e-commerce and continued momentum for out-of-home channels.The Zone saw market share gains in

229、 pet food and Infant Nutrition.By product category,the key contributor to growth was Purina PetCare,driven by differentiated offerings across premium brands Felix,Gourmet and Purina ONE.Coffee saw mid single-digit growth,led by Nescaf soluble and ready-to-drink products.Confectionery reported high s

230、ingle-digit growth,with continued market share gains for KitKat.Nestl Professional posted double-digit growth,led by beverages.Infant Nutrition recorded high single-digit growth,based on continued momentum for premium infant formula,particularly NAN.Culinary posted mid single-digit growth,with robus

231、t sales developments for Maggi and Thomy.Water saw low single-digit growth,as strong momentum for S.Pellegrino and Acqua Panna was largely offset by the impact of temporary capacity constraints for Perrier.SalesCHF 19.1 billionOrganic growth+8.2%Real internal growth 2.4%Underlying trading operating

232、profit margin16.4%Underlying trading operating profit margin0 basis pointTrading operating profit margin14.1%Trading operating profit margin 10 basis pointsZone Europe(EUR)Nestl Annual Review 202343The Zones underlying trading operating profit margin was unchanged versus the prior year.Significant c

233、ost inflation and higher advertising and marketing expenses offset pricing and portfolio optimization actions.Zone EURIn millions of CHF20222023Proportion of total sales(%)RIG(%)OG(%)Western Europe13 334 13 488 70.6%Eastern Europe4 272 4 022 21.1%Trkiye and Isral1 522 1 588 8.3%Powdered and Liquid B

234、everages5 140 5 066 26.5%Water1 626 1 573 8.2%Milk products and Ice cream345 381 2.0%Prepared dishes and cooking aids2 820 2 610 13.7%Confectionery3 091 3 027 15.8%PetCare4 732 5 056 26.5%Nutrition and Health Science1 374 1 385 7.3%Total sales19 128 19 098 2.4%+8.2%Underlying trading operating profi

235、t 3 138 3 127 16.4%Trading operating profit 2 719 2 698 14.1%Capital additions1 489 1 680 8.8%Nestl Annual Review 202344 8.3%organic growth:0.3%RIG;8.0%pricing.The Zones underlying trading operating profit margin increased by 60basis points to 23.5%.Organic growth was 8.3%,with 0.3%RIG.Pricing incre

236、ased to 8.0%,with broad-based contributions from all geographies and categories.Foreign exchange reduced sales by 13.5%,impacted by significant currency depreciation.Reported sales in Zone AOA decreased by 5.2%toCHF17.5billion.Growth in Zone AOA was supported by pricing as well as continued momentum

237、 of e-commerce and out-of-home channels.The Zone saw market share gains in confectionery and coffee.South-East Asia posted mid single-digit growth,led by the Philippines,with strong sales developments for Nescaf and Maggi.South Asia recorded strong double-digit growth across most categories.Growth i

238、n India was based on continued distribution expansion and new product launches,with strong momentum for Maggi,KitKat and Nescaf.Middle East and Africa saw double-digit growth,with particular strength for affordable offerings in Maggi,NAN and Milo.Japan reported mid single-digit growth,led by Purina

239、PetCare,KitKat and ready-to-drink Nescaf.South Korea posted high single-digit growth,fueled by Starbucks products.The new Starbucks soluble coffee offering resonated strongly with consumers.Oceania recorded high single-digit growth,supported by innovation for KitKat,Purina PetCare and Nescaf.By prod

240、uct category,Infant Nutrition was the largest growth contributor,led by NAN,Lactogen and Cerelac.Culinary recorded double-digit growth,with continued strength for Maggi.Coffee saw high single-digit growth,with robust demand for Nescaf and Starbucks products,particularly Zone AOAIn millions of CHF202

241、22023Proportion of total sales(%)RIG(%)OG(%)ASEAN7 112 6 880 39.3%Oceania and Japan2 964 2 802 15.9%South Asian Subcontinent3 156 3 042 17.4%Middle-East and Africa5 252 4 795 27.4%Powdered and Liquid Beverages6 108 5 767 32.9%Water641 582 3.3%Milk products and Ice cream3 636 3 310 18.9%Prepared dish

242、es and cooking aids2 560 2 476 14.1%Confectionery1 372 1 332 7.6%PetCare702 662 3.8%Nutrition and Health Science3 465 3 390 19.4%Total sales18 484 17 519+0.3%+8.3%Underlying trading operating profit 4 237 4 109 23.5%Trading operating profit 4 133 3 944 22.5%Capital additions930 928 5.3%Zone Asia,Oce

243、ania and Africa(AOA)SalesCHF 17.5 billionOrganic growth+8.3%Real internal growth+0.3%Underlying trading operating profit margin23.5%Underlying trading operating profit margin+60 basis pointsTrading operating profit margin22.5%Trading operating profit margin+10 basis pointsNestl Annual Review 202345

244、9.2%organic growth:0.3%RIG;8.9%pricing.The Zones underlying trading operating profitmargin decreased by 50basis points to 20.7%.Organic growth was 9.2%,with pricing of 8.9%.RIG was 0.3%,turning positive in the second half.Foreign exchange had a negative impact of 5.8%.Reported sales in Zone Latin Am

245、erica increased by 3.2%to CHF12.2billion.Zone Latin America recorded strong growth across all geographies and product categories.Growth was supported by pricing,strong operational execution and continued momentum for ready-to-drink offerings.Ambient dairy posted mid single-digit growth,based on incr

246、eased focus on products with functional benefits.Sales for Nestl Professional grew at a strong double-digit rate across most geographies and categories,supported by channel penetration and customer acquisition.Confectionery reported high single-digit growth,fueled by strong momentum for KitKat.Purin

247、a PetCare saw mid single-digit growth,led by Purina ONE,Supercoat and Felix.The Zones underlying trading operating profit margin increased by 60basis points.Pricing,disciplined cost control and portfolio optimization more than offset the impact of input cost inflation and higher advertising and mark

248、eting expenses.Zone LATAM In millions of CHF20222023Proportion of total sales(%)RIG(%)OG(%)Latin America and Caribbean11 819 12 196 Powdered and Liquid Beverages2 422 2 543 20.9%Water175 129 1.1%Milk products and Ice cream3 030 3 126 25.6%Prepared dishes and cooking aids845 888 7.3%Confectionery2 06

249、7 2 218 18.2%PetCare1 614 1 510 12.4%Nutrition and Health Science1 666 1 782 14.5%Total sales11 819 12 196+0.3%+9.2%Underlying trading operating profit 2 501 2 520 20.7%Trading operating profit 2 401 2 346 19.2%Capital additions805 923 7.6%Zone Latin America(LATAM)SalesCHF 12.2 billionOrganic growth

250、+9.2%Real internal growth+0.3%Underlying trading operating profit margin20.7%Underlying trading operating profit margin 50 basis pointsTrading operating profit margin19.2%Trading operating profit margin 110 basis pointsNestl Annual Review 202346for out-of-home channels.The Zone saw market share gain

251、s in pet food,Infant Nutrition and culinary.Brazil posted strong double-digit growth,with continued momentum for confectionery,Infant Nutrition and beverages.Within beverages,Nescaf posted strong sales growth driven by portioned coffee.Mexico reported high single-digit growth,with strong sales devel

252、opments fordairy,coffee and Nestl Professional.By product category,confectionery was the largest growth contributor,reflecting strong demand for KitKat and key local brands.In this category,Chocobiscuits saw particularly strong growth.Coffee reported high single-digit growth,led by Nescaf soluble an

253、d ready-to-drink coffee.Dairy posted high single-digit growth,supported by dairy culinary solutions and fortified milks.Infant Nutrition saw high single-digit growth,based on solid momentum for NAN infant formula,Mucilon infant cereal and Materna products.Sales for Nestl Professional grew at a stron

254、g double-digit rate,with continued customer expansion for branded coffee solutions.Culinary posted high single-digit growth,based on new product launches and further traction for Recetas Nestl,the largest online recipe platform in Latin America.Purina PetCare saw mid single-digit growth,following a

255、high base of comparison in 2022.The Zones underlying trading operating profit margin decreased by 50basis points.One-off items in the prior year more than offset pricing andcost efficiencies.Nestl Annual Review 202347 4.2%organic growth:2.5%RIG;1.7%pricing.The Zones underlying trading operating prof

256、itmargin increased by 40basis points to 16.5%.Organic growth was 4.2%,with RIG of 2.5%and pricing of 1.7%.Foreign exchange had a negative impact of 10.2%.Reported sales in Zone Greater China decreased by 5.9%to CHF5.0billion.Growth in Zone Greater China was supported by strong sales developments for

257、 out-of-home businesses and e-commerce momentum.The Zone saw market share gains in soluble coffee,pet food and confectionery.By product category,Nestl Professional was the largest growth contributor,supported by innovation and distribution expansion.Culinary posted high single-digit growth,with incr

258、eased demand for Totole in out-of-home channels and new product launches.Confectionery recorded mid single-digit growth,led by Shark wafer and Hsu Fu Chi.Infant Nutrition saw positive growth,led by NAN hypoallergenic and specialty offerings.In the fourth quarter,the Zone launched a growing-up milk s

259、olution for illuma containing human milk oligosaccharides(HMOs).Sales of healthy aging products grew at a double-digit rate,supported by the launch of N3milk,a unique science-based innovation that is as nutritious as milk and low in lactose.Coffee reported low single-digit growth,supported by ready-

260、to-drink offerings.Sales for Purina PetCare grew at a double-digit rate,based on new product launches and strong e-commerce momentum.The Zones underlying trading operating profit margin increased by 40basis points,supported by favorable mix and disciplined cost control.Zone GCIn millions of CHF20222

261、023Proportion of total sales(%)RIG(%)OG(%)Greater China5 351 5 037 Powdered and Liquid Beverages1 018 936 18.6%Water52 46 0.9%Milk products and Ice cream1 121 1 080 21.5%Prepared dishes and cooking aids930 902 17.9%Confectionery843 800 15.9%PetCare127 128 2.5%Nutrition and Health Science1 260 1 145

262、22.7%Total sales5 351 5 037+2.5%+4.2%Underlying trading operating profit 862 832 16.5%Trading operating profit 840 468 9.3%Capital additions207 161 3.2%Zone Greater China(GC)SalesCHF 5.0 billionOrganic growth+4.2%Real internal growth+2.5%Underlying trading operating profit margin16.5%Underlying trad

263、ing operating profit margin+40 basis pointsTrading operating profit margin9.3%Trading operating profit margin 640 basis pointsNestl Annual Review 202348 1.6%organic growth:3.2%RIG;4.8%pricing.The underlying trading operating profit margin decreased by 160basis points to 12.0%.Organic growth was 1.6%

264、,with pricing of 4.8%.RIG was 3.2%,impacted by a temporary supply constraint for the vitamins,minerals and supplements business.Net acquisitions increased sales by 3.1%,largely related to the consolidation of Orgain from April 2022.Foreign exchange negatively impacted sales by 6.2%.Reported sales in

265、 Nestl Health Science decreased by 1.6%to CHF6.5billion.Vitamins,minerals and supplements saw negative growth.Sales in the second half decreased following an IT integration issue encountered during the consolidation of U.S.packaging sites.The recovery is taking longer than expected as theextent of t

266、he issue was deeper and more complex than initially thought.The resulting supply constraints are expected to be fully resolved by the end of the first half of 2024,with an acceleration of growth expected in the second half of the year.Vitamins,minerals and supplements brand Pure Encapsulations wasno

267、t affected by the supply issue and saw double-digit growth.Active Nutrition reported mid single-digit growth,with robust sales developments for Orgain and Vital Proteins.Medical Nutrition recorded strong double-digit growth,with market share gains across all segments.Growth was led by adult medical

268、care products,pediatric products and Vitaflo.The gastrointestinal portfolio,including Vowst and Zenpep,saw strong double-digit growth.By geography,North America saw a sales decrease.Europe reported mid single-digit growth.Other regions combined posted high single-digit growth.The underlying trading

269、operating profit margin of Nestl Health Science decreased by 160basis points,as a result of the impact of temporary supply constraints.Nestl Health ScienceIn millions of CHF20222023RIG(%)OG(%)Total sales6 602 6 498 3.2%+1.6%Underlying trading operating profit 899 777 12.0%Trading operating profit(59

270、6)670 10.3%Capital additions 1 795 478 7.4%Nestl Health Science SalesCHF 6.5 billionOrganic growth+1.6%Real internal growth 3.2%Underlying trading operating profit margin12.0%Underlying trading operating profit margin 160 basis pointsTrading operating profit margin10.3%Trading operating profit margi

271、n+1930 basis pointsNestl Annual Review 202349 5.3%organic growth:2.0%RIG;3.3%pricing.The underlying trading operating profit margin of Nespresso decreased by 120basis points to 20.3%.Organic growth was 5.3%,with pricing of 3.3%.RIG was 2.0%.Foreign exchange negatively impacted sales by 6.0%.Reported

272、 sales in Nespresso decreased by 1.2%to CHF6.4billion.The key growth contributor was the Vertuo system,which continued to see broad-based momentum.Growth in out-of-home channels was also strong,with further adoption of the Momento system,particularly in the office segment.Innovation continued to res

273、onate with consumers,including the launch of home compostable coffee capsules and the ultra-premium N20 limited edition,a unique arabica variety.In 2023,Nespresso was recognized as one of the top100 most valuable brands in the world.*By geography,North America posted double-digit growth,with continu

274、ed market share gains.Europe reported low single-digit growth.Other regions combined saw mid single-digit growth.The underlying trading operating profit margin of Nespresso decreased by 120basis points.Significant cost inflation and the appreciation of the Swiss franc more than offset pricing action

275、s and cost efficiencies.The business continued to invest in the rollout of the Vertuo system as well asin brand marketing.*Interbrand annual rankingNespressoIn millions of CHF20222023RIG(%)OG(%)Total sales6 448 6 372+2.0%+5.3%Underlying trading operating profit 1 388 1 291 20.3%Trading operating pro

276、fit 1 309 1 283 20.1%Capital additions 520 282 4.4%NespressoSalesCHF 6.4 billionOrganic growth+5.3%Real internal growth+2.0%Underlying trading operating profit margin20.3%Underlying trading operating profit margin 120 basis pointsTrading operating profit margin20.1%Trading operating profit margin 20

277、 basis pointsNestl Annual Review 202350Principal risks and uncertaintiesThe Group aims to adopt a risk profile aligned to our purpose and business strategy.We strive to create long-term value through a balance of sustainable growth and resource efficiency.Our culture and values rooted in respect for

278、 ourselves,others,diversity and the future guide our decisions and actions.Our Creating Shared Value approach helps us prioritize those areas that maximize value creation for shareholders and cultivate positive societal and environmental impacts.The Nestl Group Enterprise Risk Management(ERM)framewo

279、rk is designed to assess and mitigate risks in order to minimize their potential impact and support the achievement of Nestls long-term purpose and business strategy.A top-down assessment is performed at Group-level once a year.A bottom-up assessment occurs in parallel,resulting in aggregation of th

280、e individual market assessments.This creates a good understanding of the companys key risks in order to allocate ownership to drive specific actions around them and take any relevant steps to address them.Additionally,Nestl engages with external stakeholders to better understand the issues that are

281、of most concern to them.The materiality assessment(included in the Creating Shared Value and Sustainability Report)rates the degree of external stakeholder concern and potential business impact.This helps to ensure that wider sustainability issues are incorporated into the risks and opportunities un

282、der consideration across the company.Risk assessments and any mitigating actions are the responsibility of the individual line management.If Group-level intervention is required,responsibility for mitigating actions will generally be determined by the Executive Board.The annual Group risk assessment

283、 is reported annually to the Executive Board,Audit Committee and Board of Directors.Under the Groups governance,the full Board is responsible for risk oversight.Further details of the ERM processes can be found in the Corporate Governance Report.We are committed to transparency and action on climate

284、-related risks and opportunities.We have aligned our reporting disclosures with the recommendations of the TaskForce on Climate-related Financial Disclosures(TCFD),which can be found in our Creating Shared Value and Sustainability Report.The risks listed below are considered the most relevant for ou

285、r business and performance.Many of the longer-term mitigation strategies are expanded on in ourCreating Shared Value and Sustainability Report.Nestl Annual Review 202351Principal risk*DescriptionPotential impactKey mitigationsBusiness transformationsFailure of strategic transformations such as large

286、-scale change management projects,restructuring,mergers and acquisitions,etc.Failure to realize anticipated benefits Impairments Low employee morale and/or engagement Executive sponsorship of transformations with aligned targets and appropriate levels of resources to support successful executionClim

287、ate change Climate-related physical disruption(e.g.,extreme weather events,water shortages,land use change,deforestation,biodiversity loss,etc.)and transitional disruption(e.g.,policy actions,technological advances,market sentiment,etc.)disrupting our operations and/or consumer demand Volatility in

288、supply of raw materials due to physical climate changes(e.g.,water stress,heat stress,etc.)Policy impacts(e.g.,carbon tax,land use restrictions,agricultural subsidy shifts,etc.)on operating costs Increased consumer and/or stakeholder concern regarding climate change impacting reputation Implementati

289、on of Nestls Net Zero Roadmap Generation Regeneration activities to support the advancement of regenerative food systems Progress on mitigations reported in the Creating Shared Value and Sustainability Report,the Climate Risk and Impact Report and Nestls CDP questionnairesConsumer preferencesFailure

290、 to adequately anticipate evolving consumer preferences;innovate relevant,competitive products and brands;and/or execute at speed Negative effect on Nestls reputation and/or brands Failure to achieve growth targets,loss of market share Strengthened consumer-centricity of innovation processes Scienti

291、fic and nutritional know-how applied to enhance nutrition,health and wellness Improved accessibility of safe and affordable foodCustomer and channel managementFailure to build and maintain trading relationships across traditional and emerging channels Reduced distribution of ourproducts to consumers

292、 Restricted ability to price impacting margin Failure to achieve growth targets,loss of market share Strategic customer relationship management Continued acceleration of digital capabilities and expansion of e-commerce and online communicationEnvironmental stewardshipFailure to comply with legislati

293、on or meet expectations concerning the environment(e.g.,biodiversity impacts,use of natural resources,air emissions and waste discharges,etc.)Negative effect on Nestls reputation and/or brands Corporate fines and/or taxation on products/categories License to operate challenges(e.g.,access to water,e

294、tc.)Litigation Caring for Water plan to implement water stewardship initiatives Commitments to improve operational efficiencies (e.g.,transition to renewable energy sources,reduction in air emissions,etc.)Nestl membership on the Taskforce on Nature-related Financial DisclosuresEthics and complianceF

295、ailure to act with integrity or ina manner consistent with our purpose and values Negative effect on Nestls reputation and/or brands Penalties and/or fines Litigation Loss of licenses Corporate Business Principles and Code of Business Conduct outlining the Groups commitment to integrity Compliance p

296、rogram and systems,including grievance mechanisms Geopolitical,societal factorsAdverse instability and/or uncertainty(e.g.,political instability,conflicts,trade wars,pandemics or disease outbreaks,labor and/or infrastructure-related risks,etc.)Reduction in consumer demand across categories and/or ch

297、annels Disruption to Nestls ability to do business in a country or region Disruption to supply chain Monitoring and ad-hoc continuity plans to mitigate against events Group-wide geographical and product category spreads Decentralized management structure Procurement strategyHealth and safetyFailure

298、to comply with local health and safety regulations and/or nurture safe,healthy workplaces in all countries where Nestl operates Negative effect on Nestls reputation and/or brands Penalties and/or fines Litigation Injuries or fatalities Occupational illness or accidents Long-term initiatives to promo

299、te safe and healthy behaviors Health and safety policies and procedures Procedures to comply with local health and safety legislation Employee Health Strategy(e.g.,#HealthyLives to build personal health,safety and well-being awareness among employees,etc.)Nestl Annual Review 202352Principal risk*Des

300、criptionPotential impactKey mitigationsHuman rightsFailure to identify and/or prevent human rights violations in direct operations and extended supply chain(e.g.,forced labor,child labor,living income and living wage,freedom of association,etc.)Negative impact on individuals Negative effect on Nestl

301、s reputation and/or brands Penalties and/or fines License to operate challenges Litigation Human Rights Framework and Roadmap Salient issue action plans Sustainable sourcing programs(e.g.,Nescaf Plan,Nestl CocoaPlan,etc.)Policies,processes and controls to respect and promote human rights Grievance m

302、echanisms and consequence management Macro-financial factorsVolatility and/or sudden shocks impacting macro factors(e.g.,forex,interest rates,cost of capital,credit ratings,pension liabilities,etc.)Government intervention(e.g.,capital controls,price controls,etc.)impacting operations and financial p

303、erformance Impeded access to capital markets Appropriate governance and risk mitigation measures to actively manage exposures and long-term asset and liability outlookNon-financial corporate governanceFailure to comply and/or meet stakeholders expectations with regards to non-financial performance a

304、nd reporting Negative effect on Nestls reputation and/or brands Penalties and/or fines Litigation Board oversight supported by the Sustainability Committee Leadership provided by the ESG&Sustainability Council Dedicated ESG Strategy&Deployment Unit Alignment with relevant non-financial reporting fra

305、meworksPeople retentionFailure to attract and retain skilled,talented employees in a competitive,dynamic marketplace Negative effect on Nestls reputation and/or brands Workforce ill-equipped with the skills for the digital age Failure to achieve growth and profit targets Initiatives to improve gende

306、r balance and cultural diversity Development strategies to cope with the demands of a changing work forceProduct and plastic packagingFailure to comply with current or future regulation,source relevant replacement packaging and/or develop new innovative solutions Specific packaging(e.g.,single-use p

307、lastic,etc.)and/or elements(e.g.,straws,etc.)taxed,banned and/or delisted Stigmatization and/or obsolescence of products,brands and/or categories Failure to achieve growth targets,loss of market share Transformation of packaging systems,including recyclable or reusable packaging,new packaging materi

308、als and collaborations to drive recycling penetration Nestl Institute of Packaging Sciences innovation of packaging solutionsProduct quality and safetyMajor event triggered by a serious food safety,product quality or other product-related non-compliance issue Serious harm or death Negative effect on

309、 Nestls reputation and/or brands Failure to meet evolving regulatory requirements Loss of trust Penalties and/or fines Litigation Policies,processes and controls to ensure high-quality,safe products and prevention of health risks Quality and food safety cultureRegulationProlonged negative perception

310、s concerning health implications of processed food and beverage categories Increase in regulation on industry and/or specific categories Erosion of consumer confidence in industry Limitations on marketing and distribution Scientific and nutritional know-how focused to enhance nutrition,health and we

311、llness Policies,including Nestl Marketing Communication to Children and Nestl Policy for Implementing the WHO CodeStrategic investment choicesInvestment choices evolve over time to include emerging technologies;new business models;creation of,or entry into,new categories;and/or geographic expansion

312、Broader exposures for the Group Acceptance of higher risk and return metrics Groups investment choices aligned with strategy and prioritized based on the potential to create value over the long termNestl Annual Review 202353Principal risk*DescriptionPotential impactKey mitigationsSupply chain disrup

313、tionMajor event impacting raw material sourcing,transport,and/or internal or external manufacturing facilities(e.g.,commodity shortages,strikes,sanctions,natural disasters,pandemics or disease outbreaks,conflict,etc.)Impeded ability to ensure supply of key products,ingredients andpackaging,including

314、 sourcing,transporting to operational facilities and distribution to customers Increase in input prices and/or production and distribution costs Business continuity and disaster recovery plans for key sites Active price risk management on key commodities Multiple supply options,including localized s

315、ourcing where relevantSupply chain stewardshipFailure to ensure a transparent,sustainable and resilient food supply chain Negative effect on Nestls reputation and/or brands Penalties and/or fines License to operate challenges Product shortages Generation Regeneration activities to support the advanc

316、ement of regenerative food systems Sustainable sourcing programs to achieve transparency and traceability on key raw materialsSystems,security and privacyThreat of cyber-attacks;new technologies,including AI;and/or failure of internal systems and digital networks disrupting the reliability,security

317、and privacy of data and/or ability to operate Inability to run operational activities Loss of confidential information impacting corporate reputation Loss of consumer trust Penalties and/or fines Litigation Contingencies and policies to protect hardware and software Privacy program to guard against

318、data security threats and comply with an evolving regulatory landscapeTaxation factorsChange to or new interpretation of existing tax regulations and/or new tax regulations(e.g.,OECD Base Erosion and Profit Shifting,BEPS,etc.)Failure to comply with tax regulations Increase in effective tax rates Inc

319、rease in the cost of compliance Group Tax Management Principles to manage and monitor tax compliance Processes and tools to ensure compliance with new requirements*Listed in alphabetical orderNestl Annual Review 202354Factories The figure in black after the country denotes the number of factories.Po

320、wdered and Liquid Beverages Water Milk products and Ice cream Nutrition and Health Science Prepared dishes and cooking aids Confectionery PetCareNorth America(NA)Canada2United States54Europe(EUR)Belgium1Bulgaria1Czech Republic3Denmark1Finland2France14Germany12Greece2Hungary2Ireland1Italy6Netherlands

321、1Poland5Portugal2Republic of Serbia1Russia6Slovak Republic1Spain10Sweden1Switzerland10Trkiye3Ukraine3United Kingdom8Asia,Oceania and Africa(AOA)Algeria2Angola1Australia6Bahrain1Bangladesh1Cameroon1Cte dIvoire2Egypt2Ghana1India8Indonesia4Iran2Israel6Japan3Jordan1Kenya1Lebanon1Malaysia6Morocco1New Zea

322、land4Nigeria3Pakistan4Papua New Guinea1Philippines5Qatar1Senegal1Singapore2Saudi Arabia5South Africa5Sri Lanka1Thailand9United Arab Emirates2Vietnam6Zimbabwe1Nestl Annual Review 202355Latin America(LATAM)Argentina6Bolivia1Brazil12 Chile9Colombia5Cuba3Dominican Republic2Ecuador3Guatemala2Mexico12Nica

323、ragua1Panama1Peru1Trinidad and Tobago1Uruguay1Venezuela5Greater China(GC)Greater China2356Nestl Annual Review 2023Corporate Governance and ComplianceNestl Annual Review 202357non-financial reporting.Chaired by our Lead Independent Director,the Nomination Committee evaluates Board composition,perform

324、ance,structure and succession planning,and assesses candidates for nomination to the Board.The Compensation Committee ensures alignment of our remuneration systems with our values,strategies and performance.In 2023,it continued its work to refine the KPIs in our short-and long-term incentive plans a

325、nd to enhance the related disclosure.A principles-based approach to governance provides thefoundation for our many actions to create sustainable value for our shareholders and shared value for all our stakeholders.Nestls value creation model allows us to continue toinvest,renovate and grow.We progre

326、ss on our path to gradually reduce absolute GHG emissions in our supply chain and continue to support the transition to aregenerative food system.Our engagement on climate action is in line with our detailed Net Zero Roadmap,which our shareholders endorsed at the 2021 Annual General Meeting.As of 20

327、24,we will submit our report on non-financial matters to a vote by shareholders as required by Swiss law.While making our portfolio good for the planet,we further intensified our efforts to provide consumers with nutritious,healthy and enjoyable products and to establish new global best practice in

328、product nutrition transparency.Nestls Board of Directors is engaged in overseeing the direction of the company.We have continued to strengthen the Board by adding new independent directors with diverse experience and skillsets directly relevant to Nestl,for example,with respect to food systems,food

329、and beverage,digitalization,marketing,sustainability,geopolitics and other topics.Engagement with our shareholders takes place through our roadshows,investor meetings,analyst calls and Chairmans Roundtables,where we meet with investors from Asia,North America,Switzerland,Germany,the UK,France and th

330、e Netherlands.The Chairs and Corporate Governance Committee regularly reviews all aspects of our governance.In 2023,it reviewed the roles and responsibilities with regards to our ESG/sustainability reporting.Our Board approves theESG/sustainability strategy proposed by management and submits our rep

331、ort on non-financial matters to the Annual General Meeting.Advising on our environmental and social sustainability,including our response to climate change and our human rights due diligence program,the Sustainability Committee has oversight over the structure and content of the ESG/sustainability r

332、eporting.The Audit Committee oversees internal and external audit and reviews reports regarding internal controls,compliance,fraud and risk management;it has oversight over the accuracy of our financial and Corporate Governance Switzerland 46.6%United States 31.2%Germany 6.0%United Kingdom 4.3%Belgi

333、um 3.1%Canada 1.7%Luxembourg 1.1%Qatar 0.7%Ireland 0.7%France 0.7%Others 3.9%Share capital distribution by geographyNestl Annual Review 202358Board of Directors of Nestl S.A.Board of Directors of Nestl S.A.at December 31,2023Paul Bulcke(1,2,4)Chairman U.Mark Schneider(1,2)Chief Executive Officer Henri de Castries(1,2,4,6)Vice Chairman Lead Independent Director Former Chairman and CEO,AXA Pablo Isl