Ar 2009 en

Annual Report Our objective is to be the
2009 recognised leader in Nutrition,

Health and Wellness and the
industry reference for financial
performance
Table of contents 2 Letter to our shareholders

6 Board of Directors of Nestlé S.A.
7 Executive Board of Nestlé S.A.
8 The Nestlé Roadmap to Good Food, Good Life

10 Four competitive advantages
12 Four growth drivers
14 Four operational pillars
16 Financial review
32 Geographic data: people, factories and sales
34 Corporate Governance and Compliance
36 Shareholder information
Accompanying reports
Creating CorporateThis is a summary report.
Shared Value GovernancePlease see our full
Summary Report Report 2009
Creating Shared Value Report
2009 including at www.nestle.com/csv
Compensation
Report 2009
Table of contents 2009 Financial
1 A message from our Chairman and CEO
2 About our reporting
Statements
3 Overview of Creating Shared Value
4 Areas of focus and engagement
6 Nutrition
10 Water and environmental sustainability
16 Rural development
20 Our people
24 Support for global principles and goals
Cover: Through The Cocoa Plan, Accompanying reports

farmers like Nadège Akissi
Kouakou (left) from Gagnoa,
Corporate
Governance
Report 2009
Côte d’Ivoire, receive high-yield including

Compensation
Report 2009
cocoa plantlets and technical 2009 Financial

Statements
support from agronomist

Kam-Rigne Laossi.
Opposite, left: Nestlé Chairman

Peter Brabeck-Letmathe joins
sixth graders from Seoul Soorak
Elementary School, Republic of
Korea, in a lesson about nutrition,
Annual Report 2009 Corporate
delivered as part of the Healthy
Governance
Kids Programme.
Report 2009;
2009 Financial
Opposite, right: Nestlé Chief
Statements
Executive Officer Paul Bulcke
visits a Maggi stand during a visit
to a market in Ghana. Figures highlighted throughout the report The brands in italics are registered
with this symbol are tracked as Key trademarks of the Nestlé Group.
Performance Indicators and summarised
in the KPI table inside the front flap.
Creating Shared Value Corporate

Summary Report Governance
2009 Report 2009;
2009 Financial
Statements
The brands in italics are registered trademarks

of the Nestlé Group.
EBIT EBIT margin © 2010, Nestlé S.A., Cham and Vevey
(Switzerland)
Key figures
In millions of CHF In %
15 000 14 The Annual Report contains forward looking
(consolidated)
statements which reflect Management’s
13 000 13 current views and estimates. The forward
looking statements involve certain risks and
uncertainties that could cause actual results to
11 000 12 differ materially from those contained in the
forward looking statements. Potential risks and
uncertainties include such factors as general
economic conditions, foreign exchange
11 876 13 302 15 024 15 676 15 699 13.0 13.5 14.0 14.3 14.6 fluctuations, competitive product and pricing
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 pressures and regulatory developments.
In case of doubt or differences of interpretation,

the English version shall prevail over the French
and German text.
Net profit (a) Earnings per share Concept and design

In millions of CHF (except per share data) 2008 2009 In millions of CHF In CHF Nestec Ltd., Corporate Identity & Design,
18 000 4.50 with Esterson Associates
Sales 109 908 107 618 Photography
12 000 3.00 Board pictures: Philippe Prêtre/APG Image
EBIT (Group) Earnings Before Interest, Taxes, restructuring and impairments 15 676 15 699 Products and consumers: Matthew Donaldson
as % of sales 14.3% 14.6% 6 000 1.50 Printing
EBIT (Food and Beverages) Earnings Before Interest, Taxes, restructuring and impairments 13 103 13 083 UD Print (Switzerland)
as % of sales (Food and Beverages) 12.8% 13.1%
Paper
8 081 9 197 10 649 18 039 10 428 Underlying (c) 2.15 2.41 2.80 2.82 3.09 This report is printed on Arctic the Volume,
Profit for the year attributable to shareholders of the parent Net profit (a) 18 039 10 428 2005 2006 2007 2008 2009 Total (a) 2.08 2.39 2.78 4.87 2.92 a paper produced from well-managed forests
as % of sales 16.4% 9.7% 2005 2006 2007 2008 2009 and other controlled sources certified
by the Forest Stewardship Council (FSC).
as % of average equity attributable to shareholders of the parent 34.9% 20.9%
Capital expenditure 4 869 4 641
as % of sales 4.4% 4.3% Dividend per share Total cash returned to shareholders
Equity attributable to shareholders of the parent before proposed appropriation of profit of Nestlé S.A. 50 774 48 915 In CHF In billions of CHF
Market capitalisation, end December 150 409 174 294 1.60 +14.3% 12
Operating cash flow 10 763 17 934
+14.8%
Free cash flow (b) 5 033 12 369 1.30 +17.3% 8
Net financial debt 14 596 18 085 1.00 +15.6% 4

Ratio of net financial debt to equity (gearing) 28.7% 37.0%
Per share 0.90 1.04 1.22 1.40 1.60 Share Buy-Back 1.3 2.7 4.4 8.7 7.0
Total basic earnings per share (a) CHF 4.87 2.92 2005 2006 2007 2008 2009 Dividend 3.1 3.5 4.0 4.6 5.0
Underlying (c) CHF 2.82 3.09 2005 2006 2007 2008 2009
Equity attributable to shareholders of the parent before proposed appropriation of profit of Nestlé S.A. CHF 13.71 13.69
Dividend as proposed by the Board of Directors of Nestlé S.A. CHF 1.40 1.60
Capital expenditure Return on invested capital (d)

(a) 2008 comparatives benefited from the profit on disposal of 24.8% of Alcon outstanding capital. In millions of CHF In %
(b) Operating cash flow less capital expenditure, disposal of tangible assets, purchase and disposal of intangible assets,
5 000 33
movement with associates as well as with non-controlling interests.
(c) Profit per share for the year attributable to shareholders of the parent before impairments, restructuring costs, results
on disposals and significant one-off items. The tax impact from the adjusted items is also adjusted for.
4 250 22
(d) ROIC calculation was amended in 2009 following changes in segment reporting. 2008 figures have been restated accordingly.
3 500 11
3 375 4 200 4 971 4 869 4 641 Including goodwill 11.4 11.7 12.2 14.7 15.6
2005 2006 2007 2008 2009 Excluding goodwill 20.8 21.2 22.2 34.8 35.1
2005 2006 2007 2008 2009
(Switzerland)
Key figures
(consolidated)

and German text.

Paper
+14.8%
Free cash flow (b) 5 033 12 369 1.30 +17.3% 8

Underlying (c) CHF 2.82 3.09 2005 2006 2007 2008 2009

5 000 33
4 250 22
3 500 11
2005 2006 2007 2008 2009
Annual Report Our objective is to be the
2009 recognised leader in Nutrition,
Health and Wellness and the
industry reference for financial
performance
Table of contents 2 Letter to our shareholders

6 Board of Directors of Nestlé S.A.
7 Executive Board of Nestlé S.A.
8 The Nestlé Roadmap to Good Food, Good Life

10 Four competitive advantages
12 Four growth drivers
14 Four operational pillars
16 Financial review
32 Geographic data: people, factories and sales
34 Corporate Governance and Compliance
36 Shareholder information
Accompanying reports
Creating CorporateThis is a summary report.
Shared Value GovernancePlease see our full
Summary Report Report 2009
Creating Shared Value Report
2009 including at www.nestle.com/csv
Compensation
Report 2009
Table of contents 2009 Financial
1 A message from our Chairman and CEO
2 About our reporting
Statements
3 Overview of Creating Shared Value
4 Areas of focus and engagement
6 Nutrition
10 Water and environmental sustainability
16 Rural development
20 Our people
24 Support for global principles and goals
Cover: Through The Cocoa Plan, Accompanying reports

farmers like Nadège Akissi
Kouakou (left) from Gagnoa,
Corporate
Governance
Report 2009
Côte d’Ivoire, receive high-yield including

Compensation
Report 2009
cocoa plantlets and technical 2009 Financial

Statements
support from agronomist

Kam-Rigne Laossi.
Opposite, left: Nestlé Chairman

Peter Brabeck-Letmathe joins
sixth graders from Seoul Soorak
Elementary School, Republic of
Korea, in a lesson about nutrition,
Annual Report 2009 Corporate
delivered as part of the Healthy
Governance
Kids Programme.
Report 2009;
2009 Financial
Opposite, right: Nestlé Chief
Statements
Executive Officer Paul Bulcke
visits a Maggi stand during a visit
to a market in Ghana. Figures highlighted throughout the report The brands in italics are registered
with this symbol are tracked as Key trademarks of the Nestlé Group.
Performance Indicators and summarised
in the KPI table inside the front flap.
Creating Shared Value Corporate

Summary Report Governance
2009 Report 2009;
2009 Financial
Statements
The brands in italics are registered trademarks

of the Nestlé Group.
Highlights 2009
Strong operating performance 4.1% organic growth – momentum CHF 15.7 billion EBIT
Broad-based: all operating accelerated through the year
segments contribute
30 basis points EBIT margin 30 basis points Food and Beverages

improvement, 40 basis points EBIT margin improvement,
in constant currencies 40 basis points in constant currencies
9.6% increase in underlying 67% increase in operating cash flow

earnings per share, 16.3% to CHF 17.9 billion
in constant currencies
30 basis points increase in return 90 basis points increase

on invested capital, excluding in return on invested capital,
goodwill, to 35.1% including goodwill, to 15.6%
Nestlé’s commitment CHF 12 billion of cash returned CHF 5.6 billion or a CHF 1.60
to shareholder value creation to shareholders in 2009 through dividend per share (proposed) for 2009,
CHF 5 billion dividend and an increase of 14.3%
CHF 7 billion share buy-back
CHF 10 billion likely to be spent by the CHF 15.6 billion likely to be returned
Group on its share buy-back in 2010 to shareholders in 2010 through
dividend and share buy-back
2010: A year of economic Nestlé expects Food and Beverages

uncertainty, especially organic growth to accelerate from
in the developed world 2009 level and to further improve its
EBIT margin in constant currencies
consumer communication in 2009: to environments they faced. It also
Letter to our ensure that we understood how

consumers’ needs and priorities were
demonstrates the benefit of our
policy, regardless of the economic
shareholders changing and to keep them abreast of

how we were adapting our product
environment, of investing continuously
in our brands through R&D and
ranges and offerings to their needs. marketing. Both increased again in
Your Company has the privilege 2009. The strength of the Swiss franc
of being deeply integrated into relative to many other currencies had
households around the globe, with a –5.5% impact on Nestlé’s reported
many consumers buying our products sales which, with a –0.7% impact
on a daily basis. This gives us a from divestitures, net of acquisitions,
wonderful opportunity to contribute resulted in a fall of –2.1% to
meaningfully to the quality of their lives CHF 107.6 billion.
through our mission of “Good Food, Despite the higher levels of
Good Life”. That mission is to provide investment in marketing and R&D, the
Fellow shareholders, consumers with the best tasting, most EBIT rose to CHF 15.7 billion and the
nutritious choices in a wide range of EBIT margin increased by 30 basis
In our letter last year we said that we food and beverage categories and points to 14.6%, or by 40 basis points
hoped that 2009 would shape a world eating occasions, from morning to in constant currencies. Our Food and
which would be more stable and night, and thereby to help them to live Beverages business achieved 3.9%
sustainable, and ultimately more just enjoyable, healthy lives. organic growth and a 30 basis points
and prosperous for everyone. Although That close integration also means, improvement in its EBIT margin,
we are not there as yet, there are however, that Nestlé was likely to be 40 basis points in constant currencies.
signs of improvement, as economies touched by a recession that impacted The foundation for this performance
begin to recover and consumer families around the world, and was a strong delivery, above target,
confidence returns, driven by especially in developed countries. The of efficiency gains in our operations,
government intervention, economic resulting weak level of consumer distribution activities and administrative
stimuli and hopes of a sustained demand as well as raw material cost costs, as well as the continued positive
improvement in standards of living. pressure and related pricing, intense trend in organic growth. The underlying
The global economic recovery remains competition amongst branded and earnings per share were up by 9.6%
somewhat fragile, however, with high non-branded manufacturers, as well as to CHF 3.09 per share. The reported net
unemployment and deficits as well currency depreciations and political profit in 2009 is not comparable to
as slow growth in the developed world. uncertainty in different parts of the 2008 because of the profit on the sale
So, whilst we believe there will be a world all combined to make 2009 a of 24.8% of Alcon in 2008.
better environment in 2010, the degree particularly challenging year. Equally, The quality of the Group’s 2009
of improvement is not certain. the economic slowdown in many performance met the demands of our
We said in 2009 that we thought countries caused their currencies to fall total performance framework, in that
the notion of trust was central to the in value compared with Nestlé’s the operating cash flow and the return
crisis. Trust, therefore, is central also reporting currency, the Swiss franc. on invested capital both also improved.
to the recovery: between business The Company’s performance should A key contributor to the CHF 7.2 billion
partners, between legislators and be seen in that context, and with increase in operating cash flow was the
industry, and between companies progress made in all key financial improvement in working capital. The
and the consumers of their products. metrics, and with all major operations Group’s return on invested capital
Nestlé, as a food and beverage and all parts of the world contributing, increased by 90 basis points to 15.6%,
company whose products are it demonstrates the strength and including goodwill, and by 30 basis
consumed around the world, could be resilience of your Company. points, excluding goodwill, to 35.1%.
described as being in the business Nestlé’s organic sales growth was Nestlé is known for its long-term
of trust. We know that trust needs to 4.1%, including real internal growth thinking, characterised in 2009 by
be earned with all stakeholders product (RIG) of 1.9% and pricing of 2.2%. This our continued investment in our
by product, brand by brand, consumer growth, achieved despite many people, our operations and distribution,
by consumer, and we understand that countries having a negative GDP our brands and innovation, but it
trust is also about corporate behaviour. development, is testament to the was our short-term action-oriented
This, perhaps, is truer than ever in a strength of our brands, as well as entrepreneurialism that made the
time of crisis and was one reason to the speed with which our people difference to our performance in 2009.
why we increased our investment in responded to the challenging This performance demonstrated
2 Nestlé Annual Report 2009

Your Company has the privilege
of being deeply integrated into
households around the globe, with
many consumers buying our products
on a daily basis. This gives us a
wonderful opportunity to contribute
meaningfully to the quality of
their lives through our mission
of “Good Food, Good Life”.
Nestlé Annual Report 2009 3

the significant benefit of having our
people aligned behind a consistent, Nestlé is known for its long-term
clear and cohesive strategy, combined
with a high level of discipline in thinking, characterised in 2009
timely execution, as well as a focus
on acceleration in operational by our continued investment
performance. These are all aspects
of our roadmap, discussed later in in our people, our operations and
this report. Our policy, meanwhile of
having devolved responsibilities distribution, our brands and
throughout the organisation, has
enabled our people to respond innovation, but it was our short-term
quickly to the changing dynamics
in their markets. action-oriented entrepreneurialism
We continued to invest for the future
in 2009. Capital expenditure was 4.3% that made the difference
of sales, as we opened new factories
and R&D centres. We remained vigilant to our performance in 2009.
for bolt-on acquisitions that combine
a good strategic fit with appropriate
financial returns. The most significant
of these was the acquisition of Kraft
Pizza announced on 5 January 2010.
Your Board also announced an increase
of CHF 3 billion in the amount of our
shares to be bought back in 2009,
to CHF 7 billion. We continued to
challenge underperformers with
an active programme of product
rationalisation, and to prune some
non-strategic assets, as well as
to simplify our business and reduce
associated costs in areas such
as legal structures.
The most significant divestment
was announced on 4 January 2010,
with the agreement to sell our
remaining holding in Alcon, for about
USD 28 billion. The completion of this
transaction will bring the total value
realised from the three-part disposal
of Alcon to over USD 40 billion. Alcon
was acquired by Nestlé in 1977 for
USD 280 million. The enormous value
created for Nestlé’s shareholders over
that time is a great credit to the past
and present management of Alcon, as
well as to Nestlé, and we thank
everybody who has contributed.
The completion of the Alcon
disposal will strengthen your
Company’s balance sheet in 2010
and beyond. Your Board has reviewed
Nestlé’s capital structure and believes
that, over the longer term, a structure

that is in line with Nestlé’s 2009 credit Francisco Castañer retired at the end The fact that we were able to do so
ratings is appropriate. With that in of the year after 45 years with the is due to the efforts of our people,
mind, we announced our intention Group and 12 years on the Executive and we thank them for their great
to buy back at least an additional Board. We would like to thank him for contributions.
CHF 10 billion of Nestlé’s shares his great service, as well as for As for the trading environment in
over the next two years, once the agreeing to continue to represent 2010, we have already said that it is far
current programme is completed, Nestlé on the Boards of Alcon, L’Oréal from clear how 2010 will unfold. Your
meaning that we will buy back about and Galderma. Jean-Marc Duvoisin, Company has demonstrated its
CHF 15 billion of shares during 2010 who joined Nestlé in 1986, will take resilience and strength in 2009, and
and 2011, and about CHF 35 billion over responsibility for Human this gives us confidence that it will
between 2007 and 2011. Resources and Center Administration. continue to make progress in 2010.
We will be proposing to He was appointed to the Executive Consequently, in spite of continued
shareholders a dividend of CHF 1.60 Board as a Deputy Executive Vice economic uncertainty in 2010,
per share, an increase of 14.3%. President on 1 January 2010. especially in developed countries,
This represents a payout ratio of 51.8% Two new directors will be proposed Nestlé expects its Food and Beverages
and reflects a dividend policy of to shareholders at the 2010 Annual business to achieve higher organic
sharing the underlying earnings of the General Meeting. Mrs Titia de Lange, growth than in 2009 and further
Company with shareholders every year. a Dutch national, is a specialist in increase its EBIT margin in constant
We believe that this dividend policy, cell biology and genetics and has a currencies for the year as a whole.
together with the Share Buy-Back strong research background that will
Programmes, underlines your Board’s contribute significantly to the Board’s
commitment to sustainably enhance scientific knowledge. Mr Jean-Pierre
the Company’s value creation for its Roth, a Swiss national, is the former
shareholders. Chairman of the Governing Board of
Your Board has always believed the Swiss National Bank and was the
that a company can only create Chairman of the Board of Directors of
long-term value for its shareholders the Bank for International Settlements.
if it is also creating value for society as It was with great sadness that the
a whole. Nestlé, as the largest food and Board of Directors learned of the death
beverages manufacturer in the world, of Lord Edward George in April. He
is one of the most geographically had been on the Board since 2004
diverse companies and touches more and had brought to it the expertise,
communities than most. As such, our judgement and wisdom that had
objective to create value for society characterised his time as Governor
at large is integral to our way of doing of the Bank of England.
business and is encapsulated in what The economic environment made
we call “Creating Shared Value”. In 2009 a tough year for everyone.
April 2009, we announced that we We would like, therefore, more than
would focus particularly on three areas ever, to thank our people all over
that are very close to our business: the world for their commitment day
addressing nutritional deficiencies, the after day to doing their best to make
challenge of water scarcity and the us continually better in everything that
development of rural communities in we do. We said last year that we
emerging countries. These areas can would strive to improve our results
benefit the people we touch and are in 2009, even despite the environment.
essential building blocks for Nestlé to
become the world’s recognised leading
Nutrition, Health and Wellness
company. As such they are also
absolutely aligned with “Good Food,
Good Life”. They are discussed in more
detail in the accompanying Creating
Shared Value Summary Report.
There was one change to the Peter Brabeck-Letmathe Paul Bulcke
Executive Board during 2009. Chairman of the Board Chief Executive Officer

Peter Paul Bulcke (3)
Board of Directors
Brabeck-Letmathe (3, 5) Chief Executive Officer
Chairman Term expires 2011 (1, 2)
Term expires 2012 (1, 2)
of Nestlé S.A.
at 31 December 2009
Andreas Rolf Hänggi (3, 6)

Koopmann (3, 4, 5) 2nd Vice Chairman
1st Vice Chairman Chairman, Rüd,
Former CEO, Blass & Cie AG,
Bobst Group. Bankers.
Term expires 2011 (1, 2) Term expires 2011 (1, 2)
Helmut O. Maucher
Honorary Chairman
Jean-René Daniel Borel (4)
Fourtou (3, 4) Co-founder and Board
Chairman of member, Logitech
the Supervisory International S.A.
Board, Vivendi. Term expires 2012 (1, 2)
Jean-Pierre André Kudelski (6)

Meyers (4) Chairman and CEO,
Vice Chairman, Kudelski Group.
L’Oréal S.A. Term expires 2011 (1, 2)
Carolina Steven G. Hoch (5)

Müller-Möhl (5) Founder and
President, Senior Partner,
Müller-Möhl Group. Highmount Capital.
Term expires 2012 (1, 2) Term expires 2011 (1, 2)
David P. Frick Naïna Lal Kidwai (6) Beat Hess (6)

Secretary to the Board Group General Group Legal Director,
Manager and Country Royal Dutch Shell plc.
Head of HSBC Group Term expires 2011 (1, 2)
KPMG SA Geneva branch Companies in India.
Independent auditors. Term expires 2011 (1, 2)
Term expires 2010 (1)
(1) On the date of the Annual General Meeting. (4) Compensation Committee.
(2) As Nestlé’s revised Articles of Association, (5) Nomination Committee.
adopted on 10 April 2008, provide for three-year (6) Audit Committee.
terms, all members of the Board will be
re-elected over the course of the following For further information on the Board of
three years. Directors please refer to the Corporate
(3) Chairman’s and Corporate Governance Governance Report 2009, enclosed.
Committee.

Paul Bulcke James Singh
Executive Board
Chief Executive Officer EVP, Finance and Control,
Global Nestlé Business Services,
Legal, Intellectual Property, Tax
of Nestlé S.A. Members Executive Board
Francisco Castañer
Laurent Freixe
EVP, Europe
at 31 December 2009 EVP, Pharmaceutical and Cosmetic Products,
Liaison with L’Oréal, Human Resources Petraea Heynike
EVP, Strategic Business Units, Marketing
Werner Bauer and Sales
EVP, Innovation, Technology, Research
and Development Marc Caira
Deputy EVP, Nestlé Professional
Frits van Dijk
EVP, Asia, Oceania, Africa, Middle East David P. Frick
SVP, Corporate Governance, Compliance
Luis Cantarell and Corporate Services
EVP, United States of America, Canada,
Latin America, Caribbean
Executive Board Yves Philippe Bloch
(from left to right): Paul Bulcke José Lopez Corporate Secretary
John J. Harris Marc Caira EVP, Operations, GLOBE
José Lopez James Singh
Richard T. Laube Laurent Freixe John J. Harris EVP: Executive Vice President
Petraea Heynike Luis Cantarell EVP, Nestlé Waters SVP: Senior Vice President
David P. Frick Frits van Dijk
Francisco Castañer Werner Bauer Richard T. Laube For further information on the Executive Board,
EVP, Nestlé Nutrition please refer to the Corporate Governance
Report 2009, enclosed.

Nestlé’s objectives are to be
The Nestlé recognised as the world leader in

Nutrition, Health and Wellness, trusted
Roadmap by all its stakeholders, and to be the

reference for financial performance in
to Good Food, its industry. We believe that leadership

is not just about size; it is also about
Good Life behaviour. Trust, too, is about

behaviour; and we recognise that trust
is earned only over a long period of
time by consistently delivering on our
promises. These objectives and
behaviours are encapsulated in the
simple phrase, “Good Food, Good
Life”, a phrase that sums up our
Four competitive advantages corporate ambition.
(page 10)
We are seeking to achieve that
True competitive between great
leadership and earn that trust by
advantage comes products and strong
from a combination R&D, between the satisfying the expectations of
of hard-to-copy broadest geographic consumers, whose daily choices drive
advantages presence and an
our performance, of shareholders, of
throughout the value- entrepreneurial spirit,
chain, built up over between great people the communities in which we operate
decades. There are and strong values. and of society as a whole. We believe
inherent links
that it is only possible to create
long-term sustainable value for our
Four growth drivers shareholders if our behaviour,
(page 12)
strategies and operations are also
These four areas Nutrition, Health and
creating value for the communities
provide particularly Wellness agenda,
exciting prospects Good Food, Good where we operate, for our business
for growth. They are Life, which seeks partners and, of course, for our
applicable across all to offer consumers
consumers. We call this “Creating
our categories and products with the
around the world. best nutritional profile Shared Value”.
Everything we do is in their categories. The Nestlé Roadmap is intended to
driven by our
create alignment for our people behind
a cohesive set of strategic priorities
Four operational pillars that will accelerate the achievement of
(page 14)
our objectives. These objectives
Nestlé must excel at other stakeholders
demand from our people a blend of
each of these four and differentiation
inter-related core from our competitors. long-term inspiration needed to build
competences. If we excel in these for the future and short-term
They drive product areas we will be
entrepreneurial actions, delivering the
development, consumer-centric,
renewal and quality, we will accelerate our necessary level of performance.
operational performance in all We are investing for the future to
performance, inter- key areas and we will
ensure the financial and environmental
active relationships achieve excellence
with consumers and in execution. sustainability of our actions and
operations: in capacity, in technologies,
in capabilities, in people, in brands, in
R&D. Our aim is to meet today’s needs
without compromising the ability of
future generations to meet their needs,
and to do so in a way which will ensure
profitable growth year after year and
a high level of returns for our
shareholders and society at large
over the long-term.

Competitive
advantages
Unmatched
Unmatched
research and
geographic
development
presence
capability
Unmatched
People,
product
culture, values
and brand
and attitude
portfolio
Cre
bility ati
a n
in
g
sta
Sh
Nutrition,
Su
Innovation
are
Health and
& renovation
pliance –
Wellness
d Value
Our objective is to be the
recognised leader in Nutrition,
m
Emerging
Health and Wellness, and
o
markets and
Operational
the industry reference for
C
Popularly
efficiency
financial performance Positioned
Products
Ne
stl
éc
ultu alues
Operational
re and v Growth
pillars Whenever, drivers
Out-of-home
wherever,
consumption
however
Consumer
Premiumisation
communication
Unmatched product and build local manufacturing and R&D and
Four competitive brand portfolio

Nestlé’s product and brand portfolio
establish local supply-chain initiatives
including long-term relationships
advantages is characterised by strong market

positions, often leadership. It is
with farmers and other suppliers.
focused and diverse: focused in that People, culture, values and attitude
75% of sales are accounted for by How can a CHF 100 billion company
about 30 brands; diverse in that we with 278 000 people really be
have strong local brands, in a good entrepreneurial? Nestlé achieves
spread of categories, cherished by this through a decentralised structure
consumers over many generations. with devolved responsibilities and
Our consumer is local, with local accountabilities that encourages
taste preferences, local eating an entrepreneurial spirit within our
traditions and unique expectations. operations and is balanced by a
Our understanding of these differences cohesive strategic direction and tight
Key facts in 2009 ensures our global brands are relevant financial controls. Strong cohesion
Unmatched Unmatched locally to consumers everywhere. is also consolidated through our
product and geographic
Nescafé coffee, for example, comes embedded company culture based
brand portfolio presence
in many variations, adapted to local on sharing our common values.
90% of sales are 140+ countries;
No. 1 or No. 2 in their 449 factories globally, tastes and preferences. We manage for the longer term, we
market; with 220 in emerging have patience as new initiatives
28 brands had sales markets; Unmatched research and gestate, we are open to risk, but we
over CHF 1 bio 540 000 farmers
and achieved 5.8% receive assistance development capability are also fast-moving and focused
organic growth from 950 agronomists Unseen behind our portfolio of brands on the competitive challenges in the
in 2009; directly employed is the impetus from R&D that provides marketplace. It is these marketplaces,
Focused on by Nestlé;
9 categories 3 400 000 people fuel for growth through consumer- around the globe, that shape our world
Unmatched earn livelihoods from centric innovation and renovation, of food, and it is our people who are
research and Nestlé supply chain through creating product differentiation closest to these markets who take the
development in emerging markets
and by providing variety; through key decisions about local innovation,
capability People, culture,
values and attitude focusing on taste and those consumer communication and launches.
CHF 2.0 bio spend
in R&D; 100+ nationalities benefits most relevant to Nestlé’s
Over 5200 employees working at Nestlé; products and by pushing barriers in
in Food & Beverages Long-term inspiration, nutritional science. But our R&D goes
R&D; short-term action;
300 external R&D Devolved beyond food to encompass new
relationships – open responsibilities and products, packaging, technology and
innovations accountabilities; manufacturing, particularly focused on
42% of local
Management environmental performance.
Committee members
native to country in Unmatched geographic presence
developing countries
The uniqueness of Nestlé’s global
presence is linked to our history:
soon after Nestlé was founded, it
wanted to expand beyond its relatively
small domestic Swiss market; today,
Nestlé’s presence in many markets,
including emerging markets, dates
back for many generations, over
100 years in some cases.
This has created very close
relationships between our brands
and their consumers, as well as an
in-depth understanding of our
consumers and an expertise in related
trends. It has also enabled us to
develop local management teams,

Nescafé Green Blend
soluble coffee
A unique soluble coffee
made of green and Pure Life Water
roasted coffee beans. Nestlé Pure Life is the
Manufactured using world’s number 1
proprietary technology water brand, present
the product contains in 27 countries. It is
up to 3 times more positioned as healthy
antioxidants than green family hydration,
tea. It can help to offering purity, safety
reduce oxidative and great taste.
stress in the body.
NIDO 1+ Growing
up milk
NIDO 1+ is a growing
up milk solution with
an exclusive product
formulation including
Nestlé’s immune
booster Lactobacillus
Protectus and key
nutrients to support
a child’s immunity,
natural defenses and
healthy growth.
KitKat 2 Finger
chocolate wafer
Using our extensive
R&D capabilities,
KitKat now has
improved chocolate,
wafer and praline
elements to ensure
consumers will
continue to enjoy its
perfect lighter taste,
at 107 calories.
Nutrition, Health and Wellness achieve good EBIT margins. The
Four growth Nestlé’s cornerstone, and its

inspiration, is its Nutrition, Health
challenge we have is to accelerate that
growth whilst further improving the
drivers and Wellness agenda, encapsulated in

the expression “Good Food, Good
margins. One way is to continue to
deepen our distribution in these
Life”. It is the non-negotiable starting markets. Another is through specific
point for the strategy of each of our business models to address specific
food and beverage product groups. consumer segments. For example,
We make products which are there is huge potential amongst
consumed by millions of consumers emerging consumers: we estimate that
on multiple occasions every day, and over the coming years about one billion
which meet the realities of consumers, consumers will eat branded food
such as their need for pleasure, balance products for the first time. To address
and clear nutritional advice. Our this opportunity, we have created a
Company’s science-based nutritional low-cost, high-quality business model,
Key facts in 2009 expertise allows us to leverage our with good financial returns, that we
Nutrition, Health Out-of-home innovation across all our products and call Popularly Positioned Products,
and Wellness consumption
all of our brands. This gives us a which focuses on creating items that
CHF 16.8 bio sales Over 40% of food privileged position to bring improved are both highly nutritious and affordable
of products that went spend in developed
through 60/40+; world is out-of-home; taste and nutrition, enjoyment and on a daily basis for low-income
CHF 10.0 bio sales of CHF 5.8 bio sales of pleasure, to consumers in a meaningful consumers.
Nestlé Nutrition; Nestlé Professional way on multiple occasions throughout
CHF 5.0 bio sales Premiumisation
achieved by products every day of their lives. We aim to do Out-of-home consumption
with Branded Active All product this by ensuring that our product The out-of-home segment is growing
Benefits; categories
have specific launches are nutritionally superior to faster than overall food consumption in
10 000 000+ children
went through premiumisation those of our main competitors and, of both developed and emerging markets.
Nestlé programmes strategies; course, that they taste better. We call Nestlé Professional, the largest branded
on nutrition CHF 2.8 bio sales
of Nespresso this 60/40+. It is important because, manufacturer in this segment, is intent
Emerging markets with 27.2% more and more, consumers want not upon capitalising on the longer-term
and Popularly organic growth;
Positioned Products just good taste but good nutrition too. trends such as increased incomes and
50% of coffee beans
3.3 bio increase to be sourced through This trend will accelerate, making more leisure time which will see further
expected in Nespresso AAA Nutrition, Health and Wellness a growth in this market. Our business has
population in Sustainable Quality growth driver for years to come. two divisions, Branded Beverages,
emerging markets programme in 2010
(2000–2050); Consumers also seek products that which is predominantly a system-based
CHF 34.5 bio sales in address specific nutritional needs. We business, either front-of-house branded
emerging markets, address some of those needs through machines or back-of-house dispensers,
with organic growth
of 8.6% in 2009; Nestlé Nutrition, focused on infant and Customised Food Solutions, which
12.7% organic nutrition, healthcare nutrition, has specific B-2-B and consumer brands
growth achieved by performance nutrition and weight and offers ancillary services for chefs.
PPP initiatives
management. Our commitment to
healthy nutrition is at the centre of all Premiumisation
we do. “Good Food, Good Life” – these Increasing incomes and leisure time, as
words capture the very essence of well as fast growth of more affluent
Nestlé and the promise we commit communities in emerging markets are
ourselves to, everyday, everywhere. positive trends for the premium sector.
Nespresso is one beneficiary, having
Emerging markets and Popularly created the premium single-serve
Positioned Products coffee market, but each of our product
Nestlé’s presence in emerging markets groups has its own premium strategy,
is both highly developed, with nearly encompassing brands such as
CHF 35 billion of sales, and rich with S. Pellegrino, Mövenpick, Fancy Feast
opportunity as these markets continue Appetizers, Cailler, and Nescafé Alta
to grow dynamically. Our businesses in Rica. This is an area of the food
these markets not only grow faster industry that should combine strong
than the rest of the Group; they also growth with high returns.

Maggi 2-Minute The Skinny Cow
noodles ice cream
The combination of The Skinny Cow:
science-based the light-hearted side
nutrition and local of nutrition for
taste preferences independent women
creates a “Great taste, who still want the
great health” offering freedom to indulge
with protein, calcium on their way to living
fortification and and looking better.
a “Masala” taste Portion control sizes
signature, addressing for an exceptionally
the needs of the satisfying treat... that
bottom of the pyramid. happens to be low
in fat and calories.
NAN H.A. formula

Nestlé Nutrition has
pioneered
hypoallergenic infant
formula. The protein
in these formulas is
less likely than
normal proteins to
trigger an allergic
reaction because it
has been broken
down into smaller
“peptides”. Clinical
studies demonstrate
a reduced risk of
developing allergies
and allergy-related
skin problems by up
to 50%.
Nespresso Volluto Nespresso AAA

coffee Sustainable Quality
A pure roast and programme, Volluto
ground coffee from provides a unique
South America, 100% sweet and fruity
sourced from the profile.
Innovation & renovation… business models, distribution
Four operational to ensure products are new, or

remain relevant to our consumers
channels and product solutions to
meet this objective.
pillars Innovation at Nestlé is about taking big

steps, about changing the rules of the Consumer communication…
game in a category or even about to excite consumers… and
creating a new category. True to learn from our consumers
innovation is hard to copy; its reward is Our brands are recognised instantly
profitable growth for decades to come. by consumers around the world,
Renovation is about taking smaller and are brought to life by consumers,
steps, updating, adapting, extending with communication key to those
products and brands to enhance their relationships. Every year there are more
relevance to consumers and sharpen touch-points between brands and
their competitive edge. Seventy years their consumers, and these go beyond
ago, innovation created Nescafé coffee; traditional marketing communication
Key facts in 2009 today continual renovation ensures and beyond traditional media. We try
Innovation & Whenever, Nescafé coffee remains the consumers’ to achieve deep levels of consumer
renovation (I&R) wherever, however
favourite, with more than 4000 cups understanding so that our brands’
7252 products Global branded drunk per second. behaviour and communication are
renovated for leader in OOH market;
nutrition or health Increased aligned with consumers’ expectations.
considerations; penetration in Operational efficiency… to have It is not just about trust and pleasure,
36% of sales in 2009 emerging markets; the highest quality, the lowest or Nutrition, Health and Wellness,
accounted for by Direct store
new products (I&R) distribution to cost, the best customer service but is also about citizenship and
launched between “Mom & Pop” stores; From supplier to customer, Nestlé responsibility, as perceived by
2007 and 2009 Improved customer wants to enhance its sustainability consumers, and about understanding
Operational service levels
with major global by being better, faster, more efficient, how consumer trends can play into
efficiency
customers less wasteful, and, as a result, higher our R&D efforts to ensure future
CHF 1.5 bio of
efficiency savings Consumer performing. We also want to help profitable growth.
in 2009; communication our suppliers, whether farmers or Consumer communication
12.2% of onsite 10.1% increase in industrial, to be more efficient. completes a virtuous circle that starts
energy generated consumer-facing
from renewable marketing spend; Greater efficiency means we will lose with hearing from our consumers
resources; 10 000 000 1-on-1 cost and gain competitiveness; we about what they want; it circles
59% reduction of interactions on will increase our eco-efficiency and through innovation and renovation that
water withdrawal consumer phone-lines
per tonne of product reduce our environmental footprint; delivers on those desires, and keeps us
since 2000; it means a safer working place and at the forefront of consumer trends; it
48% reduction of better job-satisfaction. It means moves on to operational efficiency to
GHG emissions
per tonne of product getting things right first time and it offer the lowest cost with the highest
since 2000; leads to higher quality products, quality products, delivered whenever,
59 000 tonnes improved customer relationships wherever and however the consumer
reduction of total
packaging material and happier consumers. wants them; and the circle is closed
weight; at consumer communication, both
21.8% reduction Whenever, wherever, however… to inform consumers of what’s new,
of packaging weight
(per litre of product) to have our products always in an but also to restart the circle by
over 5 years – Nestlé arm’s reach of our consumers learning from them… before circling
Waters Simply, we believe that our products back through innovation & renovation
and brands should be available and on…
whenever, wherever and however
consumers want them. At work or play,
travelling or at home, in a restaurant
or a hospital, in single-serve or a family
pack, in the world’s largest retailer or
in the smallest village, we want our
brands to be there, adapted to local
habits, preferences and nutritional
needs. And we have created specific

Milo beverage
with Protomalt
Protomalt is a new
malt extract with
less sugar but
more longer-chain
carbohydrates that
are rapidly absorbed
NesVita cereal to generate the
beverages energy kids need.
NesVita Tradition
Selections were
launched in China
offering women
a combination of
the goodness of
traditional Chinese
ingredients with
wholegrain cereal
beverages.
NaturNes baby food

All NaturNes recipes
are made with 100%
natural ingredients.
A revolutionary
gentle steam cooking
process better
preserves nutrients
and natural taste.
Lean Cuisine meals

Lean Cuisine, the
North American
leader, delivers
healthy frozen meals
that are calorie
reduced and have
controlled fat and
sodium levels, but do
not compromise on
taste, helping people
manage their weight.
Financial review
Sales Organic growth (OG) Real internal growth (RIG)
CHF 107.6 billion 4.1% 1.9%
EBIT Group EBIT margin Group EBIT margin Group
CHF 15.7 billion +30 bps

in constant currencies
+40 bps
to 14.6%
EBIT margin Food and Beverages EBIT margin Food and Beverages Underlying earnings per share
+30 bps
in constant currencies in constant currencies
+40 bps +16.3%

to 13.1%
Operating cash flow Free cash flow Proposed dividend per share
CHF 17.9 billion CHF 12.4 billion +14.3%

to CHF 1.60
Principal key
figures
(illustrative)
Income statement figures translated
at weighted average rate;
Balance sheet figures at year-end rate.
In millions of CHF (except per share data) 2008 2009
Sales 109 908 107 618

EBIT (Group) Earnings Before Interest, Taxes, restructuring and impairments 15 676 15 699
EBIT (Food and Beverages) Earnings Before Interest, Taxes, restructuring and impairments 13 103 13 083
Profit for the year attributable to shareholders of the parent Net profit (a) 18 039 10 428
Equity attributable to shareholders of the parent before proposed appropriation of profit of Nestlé S.A. 50 774 48 915
Market capitalisation, end December 150 409 174 294
Per share
Total basic earnings per share (a) CHF 4.87 2.92
In millions of USD (except per share data) 2008 2009
Sales 101 389 99 361

Per share
Total basic earnings per share (a) USD 4.49 2.70
Equity attributable to shareholders of the parent before proposed appropriation of profit of Nestlé S.A. USD 12.98 13.28
In millions of EUR (except per share data) 2008 2009
Sales 69 288 71 259

Per share
Total basic earnings per share (a) EUR 3.07 1.93
Equity attributable to shareholders of the parent before proposed appropriation of profit of Nestlé S.A. EUR 9.21 9.22
(a) 2008 comparatives benefited from the profit on disposal of 24.8% of Alcon outstanding capital.

The after-shocks of the financial crisis changes, whilst our R&D abilities and
Overview were still reverberating around the

world as 2009 started, with projections
our presence in almost every
distribution channel meant that we
of sharp declines in economic growth, were able to respond to those changing
and of rising unemployment leading to patterns of shopping behaviour with
dramatic falls in consumer confidence. new channel-specific product
Looking forward in January it was offerings. Equally, our unmatched
therefore difficult to imagine how the geographic presence meant that we
year would unfold, both from a were able to ride the wave of recovery
macro-context and for Nestlé. We did, in emerging markets, whilst benefiting
however, have some certainties: our from the resilience of North American
commitment to our strategy was consumers. During 2009 we further
unwavering, even if our execution was enhanced our relationships with our
adaptable; we had a clear set of consumers and customers, with a
priorities and a roadmap for where we continued focus on meeting their
This section should be read wanted to get to; we had instilled in the specific needs which are very different
in connection with the organisation a need for acceleration in different parts of the world, and
2009 Consolidated Financial with discipline in all that we were doing we continued to improve our
Statements. and we had achieved the alignment of capabilities to leverage our scale
our people behind our roadmap, and global reach by extending
discussed in the previous chapter. our R&D capabilities and presence.
It was also clear that in an
environment that was less conducive
to growth than the previous few years
we would need to step up our
efficiency programmes and target our
investment to capture growth wherever
there was an opportunity to do so. This
two-pronged approach was an
example of our acceleration, and was
particularly important because we
were facing continued input cost
pressure in an economic environment
that was making consumers even
more price-conscious.
Looking back at the Group’s
performance a year later, and analysing
a strong, broad-based performance, it
is clear that our businesses all over the
world rose to their challenges to deliver
good results despite the uncertainties
that they faced. The alignment that we
have achieved internally behind our
roadmap is evident in our 2009 results,
with a meaningful contribution to our
EBIT margin coming from the faster
growth of focus areas such as nutrition,
health and wellness, premiumisation
and Popularly Positioned Products. Our
commitment to investing in consumer
communication extends beyond just
supporting our brands to building a
close understanding of our consumers.
This means that in 2009 we were
attuned to consumer behaviour

Performance of billionaire brands: 5.8% organic growth
Organic growth
Over 20%
10.1% to 20%
7.6% to 10%
5.1% to 7.5%
3.1% to 5%
0.0% to 3%
Below 0%

2009 sales Sales (Group) The Group’s EBIT was
The Group achieved organic growth In billions of CHF CHF 15.7 billion, slightly up from 2008.
of 4.1%, with RIG reaching 1.9%. 110 The EBIT margin increased by 30 basis
However, the weakness of our basket points to 14.6%, and by 40 basis points
of currencies against the Swiss 100 in constant currencies. The Food and
franc impacted sales by –5.5%, Beverages business achieved the same
whilst divestitures were –0.8% 90 improvement in its EBIT margin,
and acquisitions 0.1%. Overall, the to 13.1%, and was also up 40 basis
reported Swiss franc sales were points in constant currencies.
down –2.1% at CHF 107.6 billion. 91.1 98.5 107.6 109.9 107.6 This performance combines a
The Food and Beverages business 2005 2006 2007 2008 2009 meaningful improvement in the EBIT
had organic growth of 3.9%, with margin with a significant step-up in
RIG of 1.6%. Currencies impacted both our shorter-term brand-
the sales by –5.7%, divestitures, supporting marketing spend and our
net of acquisitions, by –0.7%. longer-term brand-building R&D
Overall, the sales were down –2.5% Food and Beverages sales investment. As such, it demonstrates
at CHF 99.8 billion. and organic growth by continent (OG) Nestlé’s commitment to deliver in the
The difference between the OG (%) shorter term whilst continuing to invest
Group and Food and Beverages sales 7.5 for the longer term, even in particularly
numbers is accounted for by our tough economic environments.
Pharmaceutical activities, being 5.0
Alcon and our two joint ventures
with L’Oréal, Galderma and 2.5
Laboratoires innéov. This segment
achieved 6.7% organic growth.
0 10 20 30 40 CHF bio
Profitability
In billions of CHF Sales OG
The cost of goods sold fell by P Europe (a) 35.7 1.2%
110 basis points, despite about 2.0% P Americas (a) 44.2 4.8%
of raw and packaging material cost P Asia, Oceania and Africa (a) 19.9 7.4%
pressure. This reflects a very strong (a) Each region includes sales of the Zones, Nestlé
delivery against the cost saving targets Waters, Nestlé Nutrition, Nestlé Professional,
Nespresso and Food and Beverages joint ventures.
for Nestlé Continuous Excellence
(NCE), achieved by all the operating
segments (the three Zones, Nestlé
Waters, Nestlé Nutrition and Other
Food and Beverages). NCE also
benefited the other lines of the income
statement, particularly distribution
costs, which fell 40 basis points.
This decline in distribution costs
also reflects a mix-effect, with
some more distribution-intensive
businesses growing slower than
the Group average.
Marketing and Administrative
expenses rose by 110 basis points to
33.7% of sales. Our media spend
increased, despite lower media rates
in many countries. The administrative
costs were impacted by increased
pension costs. Our R&D costs
increased by 10 basis points to 1.9%
of sales due to increased spend in
Food and Beverages.

EBIT (Group) Operating segments Operating segments: Food and Beverages
In billions of CHF The organic growth of Nestlé’s Food sales and organic growth (OG)
15 and Beverages business accelerated OG (%)
in the fourth quarter to reach 3.9% for 7.5
13 the year. Real internal growth increased
to 1.6%. This improvement was evident 5.0
11 in each region, with organic growth for
the total Food and Beverages business 2.5
in the Americas of 4.8%, of 1.2% in
11.9 13.3 15.0 15.7 15.7 Europe and of 7.4% in Asia, Oceania 0
2005 2006 2007 2008 2009 and Africa.
Zone Americas had sales of –2.5
CHF 32.2 billion. Organic growth was 0 10 20 30 CHF bio
6.5% and RIG was 2.8%, above the
level achieved in 2008. The EBIT P Zone Europe 22.5 0.3%
EBIT margin (Group) margin increased by 20 basis points P Zone Americas 32.2 6.5%
In % to 16.8%, reflecting the benefits of P Zone Asia, Oceania and Africa 15.9 6.7%
P Nestlé Waters 9.0 –1.4%
14 the strong growth and mix. In North P Nestlé Nutrition 10.0 2.8%
America, petcare, ambient dairy, P Other Food and Beverages (a) 10.2 6.8%
13 soluble coffee and chocolate
performed particularly well. Overall,
12 North America achieved higher RIG
than in 2008. In Latin America, Brazil Operating segments: Food and Beverages
achieved double-digit organic growth EBIT margin
13.0 13.5 14.0 14.3 14.6 and there were good contributions In %
2005 2006 2007 2008 2009 also from Mexico and the other Zone Europe 12.4
regions. By category, there were strong
performances from most categories Zone Americas 16.8
in Latin America, with chocolate,
soluble coffee, ambient culinary, Zone Asia, Oceania and Africa 16.7
petcare, biscuits and powdered
and ready-to-drink beverages all Nestlé Waters 7.0
achieving double digit organic growth.
Zone Europe had sales of Nestlé Nutrition 17.4
CHF 22.5 billion. Organic growth was
0.3% and RIG was –0.9%. The EBIT Other Food and Beverages (a) 15.7
margin was unchanged at 12.4%.
This was a resilient EBIT margin (a) Mainly Nestlé Professional, Nespresso and
performance during a year in which Food and Beverages joint ventures managed on
a worldwide basis.
marketing spend increased noticeably.
Great Britain, France and Switzerland
achieved good growth. Amongst the
categories there was strong growth
in petcare, soluble coffee, powdered
beverages and sugar confectionery.
Eastern Europe achieved mid-single
digit organic growth despite the tough
economic environment in many
countries. Soluble coffee, ambient
culinary and powdered beverages all
contributed well.
Zone Asia, Oceania and Africa had
sales of CHF 15.9 billion. Organic
growth was 6.7% and RIG was 4.6%.
The EBIT margin increased by 20 basis

points to 16.7%. The Zone’s EBIT divisions, continued in the final quarter, Products
margin benefited from the strong including for Jenny Craig, the weight Powdered and liquid beverages had
growth, particularly in emerging management division, which was sales of CHF 19.3 billion. Organic
markets, and was achieved whilst impacted through the year by lower growth was 9.5% and RIG was 5.6%.
increasing our investment in brand consumer spend in the USA. The EBIT margin fell by 40 basis points
support and in distribution in emerging The Other Food & Beverages to 21.7%, due to increased levels of
markets. Africa, Greater China, South segment had sales of CHF 10.2 billion. brand investment in soluble coffee
Asia, the Philippines and Indonesia, Organic growth was 6.8% and RIG and powdered beverages, raw material
in particular, performed well. Australia was 3.6%. The EBIT margin increased cost pressure and the investment
was the best of the developed by 80 basis points to 15.7%, partly due in the continuing successful roll-out of
markets. Amongst the categories, to Nespresso which had another year Nescafé Dolce Gusto, now in
soluble coffee, ambient culinary, of dynamic growth. Cereal Partners 24 countries. Soluble coffee achieved
chocolate, petcare, ready-to-drink and Worldwide enjoyed mid-single digit good growth in all three zones. It
powdered beverages had particularly growth. Nestlé Professional, our benefited from the continued roll-out
strong growth. recently formed globally managed of renovated Nescafé brands such as
Nestlé Waters had sales of business, has been focused on Alta Rica, innovations such as Nescafé
CHF 9.0 billion. Organic growth was establishing its strategic priorities Green Blend and initiatives such as
–1.4% and RIG was –1.5%. The EBIT around branded beverages and PPP in Asia and Latin America, and
margin increased by 100 basis points to customised food solutions. It achieved targeting Hispanic consumers in the
7.0% due to input cost benefits and improving growth momentum through USA with Nescafé Clásico. Powdered
supply chain optimisation. The division the course of 2009 and improved its beverage brands such as Milo and
achieved its priorities of increasing EBIT margin. Nesquik also grew well around the
margin whilst defending or building Pharmaceutical products had sales world. Milo enhanced its favoured
shares. The sales performance was of CHF 7.8 billion. Organic growth position with consumers in Zone AOA
similar in Europe and North America, was 6.7% and RIG was 5.9%. The EBIT whilst Nesquik enjoyed a resurgence
with both regions improving slightly margin fell by 60 basis points to 33.5%. in Europe following a renovated recipe
in the final quarter of a year that has Alcon and the joint ventures as a whole with an improved nutritional profile
seen consumers trade the inarguable achieved good growth. and accompanying communication.
health benefits of the category for Nestea powder had a strong year,
savings in their household budgets. with launches such as Nestea Litro in
The emerging market business had a the Philippines. The ready-to-drink
strong year, once again delivering business, incorporating those same
double-digit growth. Nestlé Pure Life, brands, also performed well with good
the biggest water brand in the world, growth in the USA, Mexico, Brazil
present in both emerging markets and China amongst others.
and North America, achieved 14.0% Milk products and Ice cream had
organic growth. sales of CHF 19.6 billion. Organic
Nestlé Nutrition had sales of growth was 2.0% and RIG was 1.3%.
CHF 10.0 billion. Organic growth was The EBIT margin increased by 50 basis
2.8% and RIG was 0%. The EBIT points to 12.0%. There were savings
margin increased by 10 basis points from the lower dairy costs in the milk
to 17.4%. Infant Nutrition had a good business. These were reinvested in
year generally, achieving double digit brand support and promotional activity.
growth in many emerging markets. The Ice cream business achieved a
However, its growth was affected by good improvement in its EBIT margin,
weaker than expected performance with most markets contributing. The
in Germany and France. There were challenge for the milk business in 2009
very strong contributions to the has been to re-engage with emerging
margin improvement from Healthcare market consumers about value
Nutrition, due to the delivery of following the extreme high raw-
acquisition synergies, and from material price in 2007 and 2008. The
Performance Nutrition where increasing growth momentum through
successful innovation had a positive the year suggests that this has been
impact. The improving growth trend achieved, both through communication
evident earlier in the year across all four and through the continued roll-out of

Products: sales and organic growth (OG) products such as the Nido PPP range, Products: EBIT margin
OG (%) which achieved double digit growth, In %
10.0 and Nestlé Idéal. Growth was also Powdered and liquid beverages 21.7
helped by a broad range of innovations,
7.5 including nutritional milks for more Water 7.0
elderly consumers in China. In North
5.0 America, Coffee-Mate continued to Milk products and Ice cream 12.0
contribute strongly. Its international
2.5 presence is growing well. Ice cream’s Nutrition 17.4
growth in Europe was impacted by
0 rationalisation of some non-core Prepared dishes and cooking aids 12.9
markets. The North American business
–2.5 extended its leadership position, Confectionery 13.6
0 6 12 18 CHF bio with accelerated growth compared
to 2008. Among successes, were PetCare 16.3
P Powdered and liquid 19.3 9.5% products that offered consumers good
beverages taste combined with nutritional Pharmaceutical products (a) 33.5
P Water 9.0 –1.4% advantages, such as The Skinny Cow,
P Milk products and Ice cream 19.6 2.0%
P Nutrition 10.0 2.8% Nestlé Extrême All Natural and (a) Including Alcon discontinued operations.
P Prepared dishes and 17.2 0.8% Häagen-Dazs Five.
cooking aids Prepared dishes and cooking aids
P Confectionery 11.8 4.3%
P PetCare 12.9 7.9% had sales of CHF 17.2 billion. Both the
P Pharmaceutical products (a) 7.8 6.7% organic growth and the RIG were 0.8%.
(a) Including Alcon discontinued operations.
The EBIT margin increased by 20 basis
points to 12.9% despite all the
segments increasing their marketing
investment. There were particularly
good performances from ambient and
chilled culinary. The frozen and chilled
business serves both the retail and out-
of-home markets. Its retail business
enjoyed some benefit from consumers
eating at home, particularly in the USA,
but conversely, the out-of-home
business suffered from the same trend.
Consumers in the USA favoured the
value proposition exemplified by
Stouffer’s family meals and Hot Pockets,
both of which performed well, over
single-serve dishes, such as Lean
Cuisine. In Europe, Pizza was the most
dynamic category. The Nestlé Toll
House dough business performed well
in the USA, and the category enjoyed
good growth in Europe. The culinary
business, predominantly Maggi,
enjoyed double digit growth in the
Americas and Zone AOA due partly
to its PPP range, as well as to
nutritional innovation in areas such as
noodles. In a highly competitive
European environment, volumes
improved during the year.
Confectionery had sales of
CHF 11.8 billion. Organic growth was

4.3% and RIG was –1.0%. The EBIT Earnings per share Net profit and earnings per share
margin increased by 50 basis points In CHF Other income in 2008 included the
to 13.6%. This increase was due to 4.50 CHF 9.2 billion profit on the disposal of
improved profitability in the USA and 24.8% of Alcon, and it is therefore
a high delivery of cost efficiencies 3.00 significantly lower in 2009. Other
around the world, and was achieved expenses also fell, mainly as a
whilst also increasing our brand 1.50 consequence of lower restructuring
support. The chocolate business costs in 2009 and the one-off goodwill
grew dynamically in the Americas impairment on Nestlé Waters Home
and Zone AOA. Great Britain, France Underlying 2.15 2.41 2.80 2.82 3.09 and Office Delivery business in Europe
and Switzerland were among the Total (a) 2.08 2.39 2.78 4.87 2.92 in 2008.
better performers in Europe. KitKat 2005 2006 2007 2008 2009 Net Financing cost decreased by
had another strong year, achieving (a) 2008 comparatives benefited from the profit on
CHF 530 million to CHF 615 million
organic growth of 7.1%. The US disposal of 24.8% of Alcon outstanding capital. mainly as a result of lower interest rates
business performed well, driven by in 2009 and a one-off charge related to
innovations such as cranberry fair value losses in trading securities
Raisinets. Biscuits had a strong year in recognised in 2008.
its main Zone, the Americas, with Capital expenditure The Group’s effective tax rate
double digit growth in Brazil. In billions of CHF increased to 23.4% from 17.3% in
PetCare had sales of 5.00 2008, when it was reduced by the tax
CHF 12.9 billion. Organic growth was free gain on the Alcon disposal. The
7.9% and RIG was 3.1%. The EBIT 4.25 underlying tax rate fell from slightly
margin increased by 60 basis points to above 27% to 23%, mainly as a result
16.3% due primarily to strong growth 3.50 of market mix.
and the mix benefit from the faster The share of results of associates,
development of premium and super- mainly L’Oréal, fell from CHF 1.0 billion
premium products. The performance of 3.4 4.2 5.0 4.9 4.6 to CHF 0.8 billion.
the PetCare category in 2009 proved its 2005 2006 2007 2008 2009 The net profit decreased by
resilient qualities. The Purina business, CHF 7.6 billion in 2009 to
supported by increased brand CHF 10.4 billion. It is not directly
investment, outperformed its market, comparable to the 2008 net profit
with mid-to-high single digit organic because of the CHF 9.2 billion profit on
growth in all three zones. Innovation in the disposal of 24.8% of Alcon
key brands such as Bakers, ONE, recognised in 2008. For the same
Friskies and Beneful continued to drive reason, the 2009 earnings per share
growth, whilst new launches such as decreased from CHF 4.87 to CHF 2.92.
the super-premium Chef Michael’s, The underlying earnings per share
targeted at smaller dogs, achieved rose 9.6% from CHF 2.82 to CHF 3.09
encouraging momentum. Two brands, and better reflects the performance
Beneful and ONE, had sales over achieved in 2009.
CHF 1 billion for the first time in 2009.

Cash flow Cash flow Financial position
The Group’s operating cash flow In billions of CHF The average trade net working capital
increased by 67%, or CHF 7.2 billion, to 15 improved 30 basis points to 10.6%
CHF 17.9 billion. This was achieved of sales. The evolution is mainly due
despite the impact of the decline in 10 to the decrease in inventories
value of most currencies against the as explained above in the cash
Swiss Franc. The improvements 5 flow review.
achieved in all key elements of working Nestlé’s strong financial position has
capital reflect an outstanding enabled the Board to propose a
operational and financial performance, Free 6.6 7.0 8.2 5.0 12.4 meaningful increase in the dividend per
characterised by a high level of cash flow share in both 2008 and 2009, as well
discipline and a particular focus on Operating 10.2 11.7 13.4 10.8 17.9 as to announce both an acceleration
operational efficiencies. There were cash flow of the current CHF 25 billion Share
also some negative events that have 2005 2006 2007 2008 2009 Buy-Back Programme and a further
reversed in 2009, particularly the CHF 10 billion Programme to be
impacts in 2008 of higher raw material completed by the end of 2011. There
costs and of our decision to increase were no significant acquisitions
our inventories of certain raw materials. Return on invested capital (a) in 2009. In early 2010, however,
The free cash flow increased by In % we announced both the disposal
145.8%, or CHF 7.3 billion, from 33 of our remaining holding in Alcon
CHF 5.0 billion to CHF 12.4 billion. for about USD 28 billion and the
The Group’s level of capital investment 22 acquisition of Kraft’s Pizza business
was CHF 4.6 billion, representing for USD 3.7 billion.
4.3% of sales. 11
There were no major movements Return on invested capital
in the Group’s investing activities The Group’s return on invested capital
in 2009. In 2008 the Group received Including 11.4 11.7 12.2 14.7 15.6 increased by 90 basis points to 15.6%
CHF 10.7 billion from the sale of goodwill including goodwill, and by 30 basis
24.8% of Alcon. Excluding 20.8 21.2 22.2 34.8 35.1 points to 35.1% excluding goodwill.
In respect of shareholder returns, goodwill In line with the changes made in the
the Group’s financing activities 2005 2006 2007 2008 2009 segment reporting, the ROIC
comprise the Share Buy-Back calculation has been amended and
(a) ROIC calculation was amended in 2009 following
Programme, in which CHF 7.0 billion changes in segment reporting. 2008 figures have been
the 2008 figures have been restated
was invested in 2009 and prior-year restated accordingly. on a comparable basis.
dividends which increased to
CHF 5.0 billion (2008: CHF 4.6 billion).
The Group’s net financial debt,
as reported, increased from
CHF 14.6 billion at the end of 2008 to
CHF 18.1 billion at the end of 2009,
although the major part of the increase
is accounted for by Alcon, with
CHF 2.9 billion of net cash being
reported in Assets held for sale as
required by IFRS accounting rules.

Principal risks and uncertainties potentially impact upon Nestlé’s Dividend per share
Group Risk Management financial results. The Group has In CHF
The Nestlé Group Enterprise Risk necessary policies, processes and 1.60 +14.3%
Management Framework (ERM) is controls in place to mitigate against +14.8%
designed to identify, communicate, and such an event. 1.30 +17.3%
mitigate risks in order to minimise their The Group’s liquidities/liabilities
potential impact on the Group. A “Top- (currency, interest rate, derivatives, 1.00 +15.6%
Down” assessment occurs annually and/or hedging, pension funding

and focuses on the Group’s global risk obligations, commercial credit) could
portfolio. It involves the aggregation of potentially be impacted by any major 0.90 1.04 1.22 1.40 1.60
individual “Top-Down” assessments of event in the financial markets. Nestlé 2005 2006 2007 2008 2009
Zones, Globally Managed Businesses, has necessary policies, processes and
and selected markets. It is intended to controls in place to mitigate against
provide a high-level mapping of Group such an event.
risk and allow Group Management to Nestlé is dependent on sustainable
make sound decisions on the future supply of finished goods for all product Total cash returned to shareholders
operations of the Company. Risk categories. A major event in one of In billions of CHF
assessments are the responsibility of Nestlé’s key plants, at a key supplier, 12
line management; this applies equally contract manufacturers, co-packers,
to a business, a market or a function, and/or key warehouse facility could 8
and any mitigating actions identified in potentially lead to a supply disruption
the assessments are the responsibility and impact upon Nestlé’s financial 4
of the individual line management. If a results. Necessary business continuity
Group-level intervention is required, plans are established and regularly
responsibility for mitigating actions will maintained in order to mitigate against Share 1.3 2.7 4.4 8.7 7.0
generally be determined by the such an event. Buy-Back
Executive Board. The results of the Nestlé has factories in 83 different Dividend 3.1 3.5 4.0 4.6 5.0
Group ERM are presented to the countries and its products are sold in 2005 2006 2007 2008 2009
Executive Board and Audit Committee more than 140 countries in the world.
annually. In the case of an individual Security, political stability, legal &
risk assessment identifying a risk which regulatory, macroeconomic, foreign
requires action at Group level, an ad trade, labour, and/or infrastructure
hoc presentation is made to the risk(s) could potentially impact upon
Executive Board. Nestlé’s ability to do business in a
country or region. Events such as a
Factors affecting results human pandemic could potentially also
Nestlé’s reputation is based on impact upon the Group’s ability to
consumers’ trust. Any major event operate. Any of these events could
triggered by a serious food safety or potentially lead to a supply disruption
other compliance issue could and impact upon Nestlé’s financial
potentially impact upon Nestlé’s results. Regular monitoring and ad hoc
reputation or brand image. The Group business continuity plans are
has all required policies, processes and established in order to mitigate against
controls in place to prevent against such an event. The Group’s wide
such an event. geographical and product category
Nestlé is dependant on sustainable spreads represent a tremendous
supply of a number of raw materials, natural hedge.
packaging materials and services/
utilities. Any major event triggered by
natural hazards (drought, flood, etc.),
change in macro-economic
environment (shift in production
patterns, “biofuels”, excessive trading)
resulting in input price volatilities and/
or capacity constraints could

The Nestlé share Evolution of the Nestlé registered share in 2009
The Nestlé share price recovered well
after its weakness in 2008. Having In CHF
ended 2008 at CHF 41.60, it ended
2009 at CHF 50.20. This represents a 50.00 120%
+2.03% out-performance against the
Swiss Market Index and a –8.95% 42.50 100%
under-performance against the Dow
Jones Stoxx Food and Beverage Index. 35.00 80%
Dividend 27.50
The Board is proposing to shareholders
an increase in the dividend of 14.3%
from CHF 1.40 to CHF 1.60 per share. P Registered share
P Nestlé relative to Swiss Market Index
2010 outlook
Capitalising on the momentum of an
excellent year in 2008, Nestlé’s 2009
results combined strong top and
bottom line performance in a very
challenging environment, thereby
reconfirming the group’s long-term
commitment to the Nestlé Model.
This performance was broad-based
across all categories and regions,
demonstrating our commitment to
delivering in the shorter term whilst
continuing to invest for longer-term
profitable growth. Consequently,
in spite of continued economic
uncertainty in 2010, especially in
developed countries, Nestlé expects
its Food and Beverages business to
achieve higher organic growth than in
2009 and further increase its EBIT
margin in constant currencies for the
year as a whole.

Management
responsibilities:
Food and
Beverages
In millions of CHF 2007(a) 2008 2009 RIG (%) OG (%)

Zone Europe
Western 24 476 20 854 18 941 84.1% –0.4 –0.9

Eastern and Central 3 988 4 244 3 587 15.9% –3.6 5.7
Powdered and liquid beverages 6 168 5 362 5 072 22.5% 2.8 6.5
Milk products and Ice cream 3 556 3 147 2 708 12.0% –6.4 –6.2
Prepared dishes and cooking aids 9 254 7 243 6 288 27.9% –0.6 –4.0
Confectionery 5 593 5 416 4 686 20.8% –4.3 –0.4
PetCare 3 893 3 930 3 774 16.8% 2.1 5.7
Total sales 28 464 25 098 22 528 100.0% –0.9 0.3
EBIT 3 412 3 101 2 802 12.4%

Capital expenditure 932 885 759 3.4%
Zone Americas
USA and Canada 20 824 19 106 19 946 62.0% 2.8 5.1

Latin America and Caribbean 12 093 12 251 12 222 38.0% 3.0 8.6
Milk products and Ice cream 10 159 9 884 9 698 30.2% 2.7 3.6
Prepared dishes and cooking aids 6 534 5 291 5 414 16.8% 1.7 3.5
Confectionery 4 678 4 632 4 831 15.0% 1.2 9.4
PetCare 7 539 7 804 8 395 26.1% 3.8 9.1
Total sales 32 917 31 357 32 168 100.0% 2.8 6.5
EBIT 5 359 5 206 5 402 16.8%

Capital expenditure 1 371 1 341 1 092 3.4%

In millions of CHF 2007(a) 2008 2009 RIG (%) OG (%)
Zone Asia, Oceania and Africa
Oceania and Japan 4 571 4 083 4 085 25.7% 0.1 2.7

Other Asian markets 6 983 6 643 6 886 43.3% 7.9 8.8
Africa and Middle East 5 002 4 981 4 920 31.0% 3.9 7.3
Milk products and Ice cream 5 572 5 228 5 013 31.5% 3.4 2.4
Prepared dishes and cooking aids 2 714 2 565 2 680 16.9% 7.8 12.1
Confectionery 1 886 1 850 1 852 11.7% 3.7 6.1
PetCare 699 733 770 4.8% 1.0 7.4
Total sales 16 556 15 707 15 891 100.0% 4.6 6.7
EBIT 2 697 2 590 2 658 16.7%

Nestlé Waters
Europe 4 551 4 261 3 765 41.6% –3.1 –3.2

USA and Canada 5 118 4 562 4 442 49.0% –2.9 –3.4
Other regions 735 766 854 9.4% 11.0 15.0
Total sales 10 404 9 589 9 061 100.0% –1.5 –1.4
EBIT 851 573 632 7.0%

Capital expenditure 1 043 768 493 5.4%
Nestlé Nutrition
Europe 2 807 2 986 2 746 27.6% –1.3 1.0

Americas 3 897 5 475 5 218 52.4% –1.6 1.3
Asia, Oceania and Africa 1 730 1 914 1 999 20.0% 6.2 10.0
Total sales 8 434 10 375 9 963 100.0% 0.0 2.8
EBIT 1 447 1 797 1 733 17.4%

Other Food and Beverages (b)
Total sales 3 458 10 238 10 187 100.0% 3.6 6.8

EBIT 548 1522 1603 15.7%
(a) Nestlé Professional is included in the Zones.

(b) Mainly Nestlé Professional, Nespresso and Food and Beverages joint ventures managed on a worldwide basis.

Leading positions
in dynamic
categories
In millions of CHF 2007 2008 2009 RIG (%) OG (%)

Powdered and liquid beverages
Soluble coffee 10 371 10 688 10 564 54.8% 3.4 7.8

Other 7 465 8 191 8 707 45.2% 8.5 11.8
Total sales 17 836 18 879 19 271 100.0% 5.6 9.5
EBIT 4 002 4 176 4 185 21.7%
Water (a)
Total sales 10 409 9 595 9 066 100.0% –1.5 –1.4

EBIT 852 575 633 7.0%
Milk products and Ice cream
Milk products 11 742 12 189 11 662 59.6% 3.6 3.3

Ice cream 7 521 6 969 6 573 33.6% –2.6 –1.2
Other 1 405 1 398 1 322 6.8% 1.8 6.0
Total sales 20 668 20 556 19 557 100.0% 1.3 2.0
EBIT 2 294 2 357 2 345 12.0%
Nutrition (a)
Total sales 8 438 10 380 9 965 100.0% 0.0 2.8

EBIT 1 450 1 798 1 734 17.4%
Prepared dishes and cooking aids
Frozen and chilled 10 705 10 247 9 739 56.6% –0.2 –1.8

Culinary and other 7 799 7 870 7 466 43.4% 2.2 4.2
Total sales 18 504 18 117 17 205 100.0% 0.8 0.8
EBIT 2 414 2 302 2 226 12.9%

In millions of CHF 2007 2008 2009 RIG (%) OG (%)
Confectionery
Chocolate 9 754 9 802 9 369 79.4% –1.4 3.9

Sugar confectionery 1 207 1 145 1 109 9.4% –1.1 4.1
Biscuits 1 287 1 423 1 318 11.2% 2.2 7.3
Total sales 12 248 12 370 11 796 100.0% –1.0 4.3
EBIT 1 426 1 619 1 599 13.6%
PetCare
Total sales 12 130 12 467 12 938 100.0% 3.1 7.9

EBIT 1 876 1 962 2 108 16.3%
Alcon
Total sales 6 679 6 822 7 039 100.0% 6.1 6.4

EBIT 2 326 2 436 2 477 35.2%
Health and beauty joint ventures
Nestlé’s share of sales 640 722 781

Nestlé’s share of EBIT 109 137 139
Associated companies
Nestlé’s share of results 1 280 1 005 800
(a) 2008 comparatives have been restated following first application of IFRS 8. Moreover, the water products are now disclosed separately
from Powdered and liquid beverages, and the nutrition products from Milk products and Ice cream. The figures between Operating segments
and Products are slightly different due to the fact that some water and nutrition products are also sold by Operating segments other than
Nestlé Waters and Nestlé Nutrition.

Geographic data:
people, factories
and sales
Employees by geographic area Sales

In millions of CHF
2008 2009 Differences 2009/2008
Europe (a) 34.0% 33.9% By principal markets in CHF in local currency 2009
Americas 38.7% 38.0% USA +2.6% +2.7% 30 698
Asia, Oceania and Africa 27.3% 28.1% France –5.9% –1.1% 8 055
Total Germany –10.8% –6.4% 5 805
Brazil +2.1% +10.5% 5 787
Italy –12.5% –8.1% 3 886
United Kingdom –9.9% +6.0% 3 730
Employees by activity Mexico –12.6% +6.2% 3 121
In thousands Spain –8.2% –3.6% 2 789
2008 2009 Greater China Region +12.7% +10.7% 2 514
Factories 147 149 Japan +8.4% 0.0% 2 465
Administration and sales 136 129 Switzerland –1.0% –1.0% 2 046
Total 283 278 Rest of the World –2.0% (b) 36 722
By continent
Europe –8.4% (b) 37 801
USA + Canada +2.1% (b) 33 146
Factories by geographic area
Nestlé has 449 factories in 83 countries around the world. This is a Latin America + Caribbean –0.4% (b) 15 462
reduction from 456 in 2008. During the year, 10 factories were acquired Asia +3.8% (b) 15 262
or opened and 16 were closed or divested. Furthermore, the
Africa +4.0% (b) 3 111
reorganisation of our factories resulted in a reduction of 1 factory
due to satellisation. Oceania –4.1% (b) 2 836
2008 2009 Total Group –2.1% (b) 107 618
Europe 165 159
Americas 168 167 (a) 9086 employees in Switzerland in 2009.
(b) Not applicable.
Asia, Oceania and Africa 123 123
Total 456 449
Sales by geographic area: total Food and Beverages

In millions of CHF
2008 2009
Europe 39 127 35 690
Americas 43 781 44 226
Asia, Oceania, Africa 19 456 19 882
Total 102 364 99 798

Europe Asia, Oceania and Africa
Austria 1 P L L P L L L L Algeria 1 P L L L L L
Belgium 3 P L L L L L P L Australia 11 P L P L L P L P L L
Bulgaria 2 L P L L P L L L Bahrain 1 P L L L L L
Czech Republic 3 L L P L P L L L Bangladesh 1 P L P L P L L
Finland 2 L P L L L L L Cameroon 1 L P L P L L
France 30 P L P L P L L P L P L Côte d’Ivoire 2 P L P L P L
Germany 22 P L P L P L P L P L P L Egypt 3 P L P L P L L
Greece 4 P L P L L L L L Ghana 1 P L P L L L L
Hungary 3 P L P L L P L P L L Greater China Region 18 P L P L P L P L P L L
Italy 15 P L P L P L P L P L L Guinea 1 L L P L L L
Netherlands 2 L P L L L P L L India 6 P L P P P L
Poland 8 P L P L P L P L L L Indonesia 3 P L P L P L P L L L
Portugal 4 P L P L L L L L Iran 2 P L P L L L L
Republic of Ireland 1 L L L L L P L Israel 9 P L P L P P L L L
Republic of Serbia 1 L P L L L L L Japan 3 P L P L L P L L L
Romania 1 P L L L P L L L Jordan 1 P L L L L L
Russia 11 P L P L P L P L P L L Kenya 1 P L P L P L L L
Slovak Republic 1 L L P L L L L Lebanon 1 P L L L L L
Spain 13 P L P L P L P L P L P L Malaysia 6 P L P L P L P L L L
Sweden 2 P L L L L L L Morocco 1 P L P L P L L L
Switzerland 12 P L P L P L P L L P L New Caledonia 1 L P L L P L L
Turkey 4 P L L P P L L New Zealand 2 L P L P L P L P L L
Ukraine 2 P L L P L P L L L Nigeria 1 P L P L P L P L
United Kingdom 12 P L P L L P L P L L Pakistan 4 P L P L P L L
Papua New Guinea 1 P L P L P L L L
Philippines 4 P L P L L L L L
Qatar 1 P L L L L L
Americas Republic of Korea 2 P L P L L L L
Saudi Arabia 7 P L P L P L L L
Argentina 8 P L P L P L L P L Senegal 1 L L P L L
Brazil 23 P L P L P P L P L P L Singapore 1 P L L P L L L L
Canada 10 P L P L P L P L P L P L South Africa 9 P L P L P L P L P L L
Chile 6 P L P L P L P L L L Sri Lanka 1 P L P L P L
Colombia 4 P L P L P L P L P L L Syria 1 P L P L P L L
Costa Rica 1 L P L L Thailand 6 P L P L P L L L L
Cuba 3 P L P L L L L Tunisia 1 L P L L L L
Dominican Republic 2 L P L P L L L L United Arab Emirates 2 P L P L L L L L
Ecuador 2 P L P L P L P L L L Uzbekistan 1 P L P L L L L
Guatemala 1 L L P L L L L Vietnam 3 P L P L P L L
Jamaica 1 P L P L L L L L Zimbabwe 1 P L P L P L L L
Mexico 13 P L P L P L P L P L P L The figure in black after the country P Beverages
Nicaragua 1 L P L L L L L denotes the number of factories. P Milk products, Nutrition
Panama 1 L P L P L L L L and Ice cream
P Local production (may represent P Prepared dishes and
Peru 1 P L P L P L P L L L production in several factories). cooking aids
Trinidad and Tobago 1 P L P L L L L L P Confectionery
United States 81 P L P L P L P P P L L Imports (may, in a few particular P PetCare
cases, represent purchases P Pharmaceutical products
Uruguay 1 P L L L L L L from third parties in the market
Venezuela 7 P L P L P L P L P L L concerned).

We recognize that in turbulent programme relating to the Corporate
Corporate times the corporate governance

framework is of particular importance
Business Principles using independent
auditors), and the creation of a fraud
Governance and and take an active role in its

development based on a continuous
database strengthened our audit
efforts. Our anti-bribery programme
Compliance engagement with our investors and

other stakeholders. In that spirit we
and our internal complaints
management were other focus areas.
undertook in 2009 another shareholder An internal Data Protection Office
survey, this time among the was registered with the authorities, and
shareholders attending our last the annual self-assessment of the
shareholders’ meeting, to receive Group’s internal control system and
their input and priorities regarding the annual Board risk assessment
this event. The results (see were performed.
www.nestle.com) confirmed support
for our format and suggested topics
Corporate Governance to be covered in future meetings.
Nestlé pursues a strategy of best
practice of corporate governance. In Compliance
2008, the Annual General Meeting Compliance builds trust. It forms
approved a complete revision of the the base of how we do business
Company’s Articles of Association. and is the first layer of how we create
99% of the votes represented at the shared value.
meeting were cast in favour of the While responsibility for compliance
revision. The new Articles have is assigned to the markets as per the
modernised our governance in the Custodian Concept, a small corporate
best interests of our Company and Compliance function and a cross-
its stakeholders to aim for long-term, functional Compliance Committee
sustainable value creation, a statement define the framework, facilitate the
which was expressly added to the coordination between the various
new Articles. relevant support functions and provide
While the new Articles have guidance and best practices. Through
addressed many governance issues, the Compliance Committee and the
compensation remains the subject of Corporate Compliance Programme we
much political debate. In 2008, we build awareness and ensure a
produced for the first time a special coordinated, holistic approach to
annual compensation report describing compliance and risk management.
our compensation system and the The implementation of the values
compensation granted. The report was enshrined in the Corporate Business
approved by the shareholders as part of Principles, the Nestlé Management and
the approval of the annual financial Leadership Principles and the Code
statements. Since then, we kept in of Business Conduct is the cornerstone
close contact with many of our of the Corporate Compliance
shareholders and asked for their opinion Programme. In 2009 we focussed
regarding this issue. As a result, at the on the implementation of our Code
2009 Annual General Meeting, we of Business Conduct including a
submitted our compensation report for compliance e-learning tool and of our
the first time to a separate advisory Supplier Code of Conduct. An anti-trust
vote of the shareholders, as per the learning tool initially implemented in
alternative procedure foreseen in the Zone Europe was launched across all
Swiss Code of Best Practice for Zones in locally adapted versions.
Corporate Governance. In 2010 we will The addition of a new integrity module
again submit the report to a separate to our CARE programme (Compliance
advisory vote as an interim solution Assessment of Human Resources,
until the new Swiss law is clarified on Safety & Health, Environment and
this topic. Business Integrity, our audit

Shareholders by geography (a)
P 35.6% Switzerland P 3.7% Canada

P 21.5% USA P 3.6% Norway
P 10.8% United Kingdom P 3.2% France
P 4.3% Germany P 17.3% Others
Distribution of Share Capital by geography (a)
60%
40%
20%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
P Switzerland P Canada
P USA P Norway
P United Kingdom P France
P Germany
Share Capital by Investor Type (a)
90%
60%
30%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
P Institutions
P Private Shareholders
(a) Percentage derived from total number of registered shares.

Registered shares represent 61.9% of the total share capital.
Statistics are rounded, as at 31.12.2009.

Further information Important dates
Shareholder To order additional copies of this

document, please go to www.nestle.
15 April 2010
143rd Annual General Meeting,
information com/Media_Center/order. “Palais de Beaulieu”, Lausanne
For additional information, contact: 16 April 2010

Nestlé S.A., Investor Relations Last trading day with entitlement
Avenue Nestlé 55, CH-1800 Vevey to dividend
(Switzerland)
tel.: +41 (0)21 924 35 09 19 April 2010
fax: +41 (0)21 924 28 13 Ex dividend date
e-mail: ir@nestle.com
22 April 2010
The Nestlé Annual Report, the Payment of the dividend
Financial Statements and the Corporate
Stock exchange listing Governance Report are available 22 April 2010
At 31 December 2009, Nestlé S.A. on-line as a PDF file in English, French Announcement of first quarter 2010
shares were listed on the SIX Swiss and German. The consolidated income sales figures
Exchange (ISIN code: CH0038863350). statement, balance sheet and cash
American Depositary Receipts (ADRs) flow statement are also available as 11 August 2010
(ISIN code: US6410694060) Excel files. Publication of the Half-yearly Report
representing Nestlé S.A. shares are January/June 2010
offered in the USA by Citibank. As to information concerning the share
register (registrations, transfers, 22 October 2010
Registered Offices address changes, dividends, etc.), Announcement of nine months
Nestlé S.A. please contact: 2010 sales figures
Avenue Nestlé 55, CH-1800 Vevey Nestlé S.A. (Share Transfer Office)
(Switzerland) Zugerstrasse 8, CH-6330 Cham 17 February 2011
tel.: +41 (0)21 924 21 11 (Switzerland) 2010 Full Year Results;
tel.: +41 (0)41 785 20 20 press conference
Nestlé S.A. (Share Transfer Office) fax: +41 (0)41 785 20 24
Zugerstrasse 8, CH-6330 Cham e-mail: shareregister@nestle.com 14 April 2011
(Switzerland) 144th Annual General Meeting,
tel.: +41 (0)41 785 20 20 The Company offers the possibility “Palais de Beaulieu”, Lausanne
of depositing, free of charge,
Nestlé S.A. shares traded on the
SIX Swiss Exchange.
Nestlé URL: www.nestle.com

(Switzerland)
Key figures
(consolidated)

and German text.

Paper
+14.8%
Free cash flow (b) 5 033 12 369 1.30 +17.3% 8

Underlying (c) CHF 2.82 3.09 2005 2006 2007 2008 2009

5 000 33
4 250 22
3 500 11
2005 2006 2007 2008 2009

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Annual Report Our objective is to be the

2009 recognised leader in Nutrition,

Table of contents 2 Letter to our shareholders

8 The Nestlé Roadmap to Good Food, Good Life

Cover: Through The Cocoa Plan, Accompanying reports

Côte d’Ivoire, receive high-yield including

cocoa plantlets and technical 2009 Financial

support from agronomist

Opposite, left: Nestlé Chairman

Creating Shared Value Corporate

The brands in italics are registered trademarks

In case of doubt or differences of interpretation,

Net profit (a) Earnings per share Concept and design

Net financial debt 14 596 18 085 1.00 +15.6% 4

Capital expenditure Return on invested capital (d)

In case of doubt or differences of interpretation,

Net profit (a) Earnings per share Concept and design

Net financial debt 14 596 18 085 1.00 +15.6% 4

Capital expenditure Return on invested capital (d)

Table of contents 2 Letter to our shareholders

8 The Nestlé Roadmap to Good Food, Good Life

Cover: Through The Cocoa Plan, Accompanying reports

Côte d’Ivoire, receive high-yield including

cocoa plantlets and technical 2009 Financial

support from agronomist

Opposite, left: Nestlé Chairman

Creating Shared Value Corporate

The brands in italics are registered trademarks

30 basis points EBIT margin 30 basis points Food and Beverages

9.6% increase in underlying 67% increase in operating cash flow

30 basis points increase in return 90 basis points increase

2010: A year of economic Nestlé expects Food and Beverages

Letter to our ensure that we understood how

shareholders changing and to keep them abreast of

2 Nestlé Annual Report 2009

Nestlé Annual Report 2009 3

4 Nestlé Annual Report 2009

Nestlé Annual Report 2009 5

Andreas Rolf Hänggi (3, 6)

Jean-Pierre André Kudelski (6)

Carolina Steven G. Hoch (5)

David P. Frick Naïna Lal Kidwai (6) Beat Hess (6)

6 Nestlé Annual Report 2009

of Nestlé S.A. Members Executive Board

Nestlé Annual Report 2009 7

The Nestlé recognised as the world leader in

Roadmap by all its stakeholders, and to be the

to Good Food, its industry. We believe that leadership

Good Life behaviour. Trust, too, is about

8 Nestlé Annual Report 2009

Four competitive brand portfolio

advantages is characterised by strong market

10 Nestlé Annual Report 2009

Four growth Nestlé’s cornerstone, and its

drivers and Wellness agenda, encapsulated in

12 Nestlé Annual Report 2009

NAN H.A. formula

Nespresso Volluto Nespresso AAA

Four operational to ensure products are new, or

pillars Innovation at Nestlé is about taking big

14 Nestlé Annual Report 2009

NaturNes baby food

Lean Cuisine meals