Full Year 2021 Nestle SA Earnings Press Conference

February 17, 2022

Mark Schneider: Good morning, and a warm welcome to our full year 2021 press conference. Thank you for joining us today. At the same time, I would like to express my regrets to our media partners that we can't meet with you in person here at our headquarters. We hope, as the pandemic subsides, that this will be possible again in future years. We appreciate your attention, and today we have an exciting program. First, I would like to take you through some summary thoughts on our year 2021. I will then hand over to our chief financial officer, François-Xavier Roger, who will give you a more detailed review of our financial and also the performance by category and region. Then, of course, we're looking forward to answering all of your questions.

Mark Schneider: Good morning, and a warm welcome to our full year 2021 press conference. Thank you for joining us today. At the same time, I would like to express my regrets to our media partners that we can't meet with you in person here at our headquarters. We hope, as the pandemic subsides, that this will be possible again in future years. We appreciate your attention, and today we have an exciting program. First, I would like to take you through some summary thoughts on our year 2021. I will then hand over to our Chief Financial Officer, François-Xavier Roger, who will give you a more detailed review of our financial and also the performance by category and region. Then, of course, we're looking forward to answering all of your questions.

Good morning, and a warm welcome to our full year 2021 Press conference.

And for joining us today and at the same time I would like to express my regrets to all media partners that we can't meet with you in person here at our headquarters we hope as the pandemic subsides that this will be possible again in future years.

We appreciate your attention and time today, we have an exciting program. Our first I would like to take you through some summary thoughts on our 2021 I will then hand over to our Chief Financial Officer, Paul <unk>, who will give you a more detailed review of our financial highlights and also the performance by category Andrew.

Region, and then of course, we're looking forward to answering your questions before.

Mark Schneider: Before we get started, let me just get some formalities out of the way. Here is our safe harbor statement, which applies to the comments during this event and also all presentation material. Starting on the overview of 2021, certainly a very strong year, with a strong ending. The fourth quarter came in more strongly than we expected, and it's also very reassuring to see that as we enter 2022, that there is tremendous momentum in the company. We had a strong start to the year. Looking at the key messages for 2021, I'm not focusing here on every bullet point, but to me, the key message is that at a time when the company had to navigate significant pandemic and supply chain challenges, we did deliver a very significant, very successful operating and financial metrics.

Mark Schneider: Before we get started, let me just get some formalities out of the way. Here is our safe harbor statement, which applies to the comments during this event and also all presentation material. Starting on the overview of 2021, certainly a very strong year, with a strong ending. The Q4 came in more strongly than we expected, and it's also very reassuring to see that as we enter 2022, that there is tremendous momentum in the company. We had a strong start to the year. Looking at the key messages for 2021, I'm not focusing here on every bullet point, but to me, the key message is that at a time when the company had to navigate significant pandemic and supply chain challenges, we did deliver a very significant, very successful operating and financial metrics.

Before we get started let me just get some formalities out of the way here is our safe Harbor statement, which applies to the comments do want this event and also all presentation material.

So starting on the overview of 2021, certainly a very strong year.

With a strong ending in the fourth quarter came in more strongly than we expected and it's also very reassuring to see that as we enter 2022 that there is tremendous momentum in the company. So we had a strong start to be here.

Looking at the key messages for 2021, I'm not focusing here on every bullet point, but to me the key messages that at a time when the company had to navigate significant pandemic and supply chain challenges, we did deliver a very significant and very successful operating and financial metrics and more.

Mark Schneider: More importantly, we did not lose sight of the longer-term strategic objectives and making progress towards those. Those apply to innovation, for example. They apply to our ESG targets. They apply to digitalization and also adjusting our portfolio over time through active portfolio management. On all of these metrics, the company did very well. You see that it's been a very consistent picture here, confirming once more Nestlé as a very consistent and dependable company in difficult times. I would also like to take a moment at this point to thank our Team Nestlé for tremendous efforts that they have displayed in this year 2021. It's been a very challenging year, more than the numbers suggest. The effort and the commitment is not only visible in our operating and financial data.

Accordingly, we did not lose sight of the longer term strategic objectives, and making progress towards those.

Supply to innovation for example.

Two our ESG targets, they apply to digitalization and also adjusting our portfolio overtime through active portfolio management and to on all of these metrics. The company did very well you'll see that it.

It's been a very consistent picture here confirming once more nationally it is a very consistent and dependable company in difficult times.

I'd also like to take a moment at this point to thank our team nessler for tremendous efforts that they have displayed in this year 2021, it's been a very challenging year more than the numbers suggest.

And the effort and the commitment is not only visible in our operating and financial data more importantly in a year. That's still saw so much hardship in so many challenges due to the pandemic and supply chain issues around the world I've seen time and time again airports that went over and above what was typically expected.

Mark Schneider: More importantly, in a year that still saw so much hardship and so many challenges due to the pandemic and supply chain issues around the world, I've seen time and time again efforts that went over and above what was typically expected and out of the way to really make things happen. In a time when compassion was so important, we've seen heart-moving acts of kindness and help to the communities around us and also to each other, as we try to assure safety in the workplace and business continuity. Well done, Team Nestlé. I'm very proud of what has happened here, and I think we were all living up to the best of our values. Now, the next two pages will focus on our organic growth performance.

And out of the way to really make things happen.

And in a time when compassionate, what's so important we've seen heart moving acts of kindness and and help to the communities around us and also to each other.

We try to assure safety in the workplace and business continuity, so well done to Nestle I'm very proud of what has happened here and I think we were all living up to the best of our values.

Now the next two pages will focus on our organic growth performance and obviously 2021, we're very pleased with the strong seven 5% organic growth.

Mark Schneider: Obviously, 2021, we're very pleased with the strong 7.5% organic growth. We know that some of that, of course, was aided by the tailwinds coming from the pandemic, stronger at-home consumption. To me, the more important message of this slide is that we are fully geared now towards sustained mid-single-digit organic growth for 2022 and beyond. It's borne out in our guidance for this year and also in the midterm outlook that we issued today with our press release. We were already telling you during the year that we have what it takes with our portfolio to make that happen. You see the ramping from 2017 towards 2020. Of course, the strong showing in 2021.

We know that some of that of course was aided by the tailwind coming from the pandemic stronger at home consumption to me the more important message of this slide is that we are fully geared now towards sustained mid single digit organic growth for 2022 and beyond it's borne out in our guidance for this year.

Here and also in the midterm outlook that we issued today with our press release, we weren't already telling you do in the year that we have what it takes with our portfolio to make that happen you see the ramping from 2017 towards 2020 of course, the strong showing in 2021, but then I think with all.

Mark Schneider: I think with all of the issues that you see on the right-hand side of the page, the investment in fast-growing categories and geographies, innovation, digitalization, market share gains, and portfolio rotation, I think we're now there. We're at the point where we can live up to one of the cornerstones of the old Nestlé model, and that is sustained mid-single digit organic growth performance, which is very important to a compounding value growth model that we pursue over time. Looking more specifically at the organic growth performance in 2021, let me highlight some high growth categories and channels. When it comes to categories, clearly three stand out. That's pet care, coffee, and Nestlé Health Science. Pet care and Nestlé Health Science with double-digit organic growth. Coffee, just a shade under double-digit organic growth at 9.7%.

All of the issues that you see on the right hand side of the page.

The investment in fast growing categories, and geographies innovation digitalization market share gains and portfolio rotation I think we're now they are at the point, where we can live up to one of the cornerstones of the openness of the model and that is sustained mid single digit organic growth performance, which is very important too.

<unk>, a compounding value growth model that we pursue overtime.

Looking more specifically at the organic growth performance in 2021, let me highlight some high growth categories and channels.

When it comes to categories clearly three stand out that's petcare coffee and that's the health Science, Petcare and Nestle health science with double digit organic growth coffee, just a shade under double digit organic growth at 9.7%.

Mark Schneider: Very strong showing. I think betting on these high growth categories, giving them all the investment and runway they needed, really paid off for the company and supported our strong growth and also associated market share gains. When it comes to the mid and longer term prospects, I think the future for these three categories continues to look bright. In Petcare, we're seeing vastly increased pet adoption rate around the world, which of course will translate into significant demand for pet food. Coffee benefits from what we call the at-home revolution, the fact that even post-pandemic, people will have a much more flexible work style when it comes to office-based work, at-home work, and more work being done from home. Cups of coffee at home, of course, our market share continues to be above the one in out-of-home.

Very strong showing I think betting on these high growth categories given them all the investment in one way they need it we only paid off for the company and supported our strong crop and also associated with market share gains.

When it comes to the mid and longer term prospects I think the future for these three category categories.

He needs to looks bright in pet care, we're seeing a vastly increased pet adoption rates around the world, which of course will translate into significant demand for pet food.

Coffee benefits from what we call the at home Revolution, The fact that.

Even post pandemic people will have a much more flexible.

Workstyle when it comes to office based work at home work and more work being done from home and Cups of coffee at home of course, our market share continues to be above the one in out of home. Hence we are benefiting from this trend.

Mark Schneider: Hence, we're benefiting from this trend. Nestlé Health Science, I think even when the pandemic subsides, we're seeing renewed interest in personal health. Continued strong interest in boosting the immune system. This should also bolster the long-term fundamentals of the vitamins, minerals, and supplements categories. We did see in 2021 continued double-digit growth in our plant-based food area. This at a time when some other competitors experienced some trouble. I think our early foray into specialties in addition to some mainstream products, so think about plant-based alternatives to tuna and shrimp or egg, as an example, has clearly paid off, and we continue to put significant research and development effort in this area.

Nestle Health Science, I think even if and when the pandemic subsides, we're seeing renewed interest in personal health also strong interest continued strong interest in boosting the immune system and so this should also bolster the long term fundamentals of the vitamins minerals and supplements.

Categories.

We did see in 2021 continued double digit growth in our plant based food area. This at a time when some other competitors' experiments some trouble I think our early foray into specialties. In addition to some mainstream products.

Think about plant based alternatives to tuna and shrimp or as an example has clearly paid off and we continue to put significant research and development effort. In this area. We continue to see it as a once in a generation opportunity to revitalize and re energize, our food business, which as you know has more than 10 billion Swiss francs.

Mark Schneider: We continue to see it as a once in a generation opportunity to revitalize and re-energize our food business, which as you know, has more than CHF 10 billion of sales. E-commerce continued certainly to benefit from the pandemic around the world. Over and above the pandemic, I think people have discovered now the convenience and the benefits of shopping for food and beverage products online. We believe that's here to stay, and we have an ambitious target to triple up that number to about 25% of our revenues by the year 2025, up from the 14 that we saw in the year 2021.

Of sales.

E Commerce.

Continued certainly to benefit from the pandemic around the world, but over and above the pandemic I think people have discovered now the convenience and the benefits of shopping for food and beverage products online. We believe that's here to stay and we have an ambitious target to try to up that number to about 25 per.

<unk> of our revenues by the 25 up from the 14 that we saw in the year 2021.

Mark Schneider: Portfolio management, I'll focus on that on one of the following pages, but I think the two defining steps in the year 2021 were the continued expansion of Nestlé Health Science and also the transformation of our waters business, in particular the sale of our North American water brands. It's not only about trading, it's also very much about fixing underperforming businesses. Two examples here from the year 2021 were the recovery of out-of-home channels. Clearly, this was aided by the pandemic subsiding in many markets. We saw a very strong 24.5% growth, and we're now close back to levels that we've seen pre-pandemic. Continued success with our frozen meals in the US, almost double-digit growth.

Portfolio management I'll focus on that on one of the following Patriots, but I think the two defining steps in the year 2021 were the continued expansion of Nestle Health Science and also the transformation of our water business and in particular of the sale of our North American water France.

It's not only about trading it's also very much about fixing underperforming businesses and.

Two examples here from the year 'twenty, one where the recovery of <expletive> , sorry out of home channels. So clearly this was aided by the pandemic subsiding in many markets.

But we saw a very strong.

24, 5% growth and we're now close back to levels that we've seen pre pandemic and then continued success with our frozen meals in the U S. Almost double digit growth and here again, it's not only a pandemic driven it's also very much some of the internal fixing and frankly by utilization.

Mark Schneider: Here again, it's not only pandemic driven, it's also very much some of the internal fixing and plant revitalization that we engaged in. All in all, very strong picture underpinning the growth and success with our organic growth numbers around the world. Now, this is a summary of the last five years when it comes to the portfolio turnover and portfolio reshaping. You see more than 85 transactions, both on the buying and the selling side. Since 2017, we swapped out and changed almost 20% of group sales. You see that it gave us a very nice organic growth contribution. I think this is part of our value creation strategy.

That we engaged in so all in all very strong patria, an underpinning of the growth and success with our organic growth numbers around the world.

Now this is a summary of the last five years when it comes to the portfolio turnover and portfolio reshaping.

C more than 85 transactions.

Both on the buying and the selling side since 2017, we swapped out and changed almost 20% of group sales and do you see that it gave us a very nice organic growth contribution. So I think this is part of our value creation strategy. It's not the only part that's something we always pointed.

Mark Schneider: It's not the only part, that's something we always point out, but certainly it has helped us to adjust to some changing consumer tastes. We see it as a continued effort here, also ranging into the future. As always, we will act with prudence when it comes to these transactions. Paying the right price when we acquire and insisting, of course, on full value when we divest is a hallmark of our portfolio adjustment strategy. The next two slides, I would like to focus on two ESG-related topics. One is our sustainable livelihoods initiative that we announced on 27 January in conjunction with the government of Côte d'Ivoire. This one is specifically targeted at reducing child labor risk in the cocoa industry.

Out, but certainly it has helped us to adjust to some changing consumer tastes and then we see it as a continued effort here also ranging into the future.

As always we will act with Prudence when it comes to these transactions.

So paying the right price when we acquire and insisting of course on a full value. When we divest is a hallmark of our portfolio adjustments strategy.

The next two slides I would like to focus on two ESG related topics.

One is our sustainable livelihoods initiative that we announced on January 27 in conjunction with the government of Coty block. This one is specifically targeted at reducing and trough type of risks in the cocoa industry.

Mark Schneider: I think building on the long-term efforts of our Nestlé Cocoa Plan and many insights that we had through pilot programs, we now have a very interesting novel incentive and support program, one that gives support independent of output, so that smallholder farmers benefit. We are supporting families for sending kids to school. We're supporting them for sustainable agricultural practices that will also drive and help output over time. We also help them with income diversification. All of that geared towards helping them achieve a living income and making that sustainable over time and then lessening the risk for child labor.

And I think building on the long term efforts of our nessler cohort plan and many insights that we had through pilot programs. We now have a very interesting novel incentive and support program. One that gifts supports independent of output so that small holder farmers benefit and we are supporting.

<unk> families for sending kids to school with supporting them for sustainable agricultural practices that we'll also try and help output overtime.

And we also help them with income diversification. So all of that's geared towards helping them achieve their living income and to making that sustainable overtime and then lessening the risk for a child labor that goes hand in hand with a several year effort that's underway to make our system Oh.

Mark Schneider: That goes hand in hand with a several-year effort that's underway to make our supply chain fully traceable, because only with a fully traceable supply chain, you have that source to consumer link, and you can generate consumer trust. The next one I would like to focus on is an update on our Nestlé Climate Roadmap. I think this is timely because the 2021 numbers just came in and have been reviewed by Ernst & Young and also by the Science Based Targets initiative, whose guidance we very much follow. Also there has been some recent debate on the subject. I think this is a good opportunity to show you the facts from our side and also in some discussion items put the record straight.

Supply chain fully traceable, because only with a fully traceable supply chain you have that source to consume a limb.

Link and you can generate consumer trust.

The next one I would like to focus on is an update on our Nessler climate Road map I think this is timely because the 2021 numbers just came in and have been reviewed by Ernst and young.

And also by the Science based target initiative, whose guidance are we very much photo and also if there has been some recent debate on the subject and so I think this is a good opportunity to show you the facts from our side and also in some discussion.

Discussion of items put the record straight.

Mark Schneider: The key message here is that peak carbon is behind us. Coming from a level acquisition-adjusted of about 93 million tons in the year 2018, we continued to slightly go up. We reached peak carbon sometime around 2019 with about 96, 97 million tons. Ever since, we've been going down. We've been going down even though, as a company, we've been growing strongly, as you've seen from the numbers. I think this is to us the key issue here, that we are able, with our reduction initiatives, to overcome the upward trend that comes from growth. Hence, that whole notion of growth-adjusted reductions, that is something that we strongly pointed out in our Net Zero Roadmap and something that is now fully borne out by the facts.

So the key message here is that peak carbon is behind us so coming from a level acquisition adjusted of about 93 million tons in the year 2018, we continued to slightly go up we reached peak karpen sometime around 2019 with about 90 697 million tonnes.

And ever since we've been going down and we've been going down even though as a company we've been calling strongly ex U S. You've seen from the numbers and I think this is to US. The key issue here that we are able with our reduction initiatives to overcome the upward trend that comes from growth.

And hence that whole notion of crop adjusted reductions.

That is something that we strongly pointed out in our net zero roadmap and something that is now fully borne out by the facts.

Mark Schneider: When you think to the COP26 discussion and to many public debates around that, one personal comment from my side, I certainly get impatient these days when I hear too much talk about the focus on what will happen in 2040, 2045, or 2050. It is February 2022, and we need to act on one of the defining issues of our time now. Hence, this notion about whose carbon emissions are going down and whose carbon emissions are going up, to me, is key. To me, more important than your plans for 10, 20, 30 years from now are the immediate actions and also the verified levels of output and full disclosures around that.

And when do you think to the cop 26 discussion and to many public debates around that.

One personal comment from my side.

I certainly get impatient. These days went out here too much talk about the focus on what will happen in 2040 20 to 45 for 2015.

It is February 2022, and we need to act on one of the defining issues of our time now and has this notion about who's carbon emissions are going down and who is carbon emissions are going up to me is key.

To me more important than your plans for 10 2030 years from now the immediate actions and also the various light levels of output and full disclosures around that so to me. The question are you on your way down.

Mark Schneider: To me, the question, are you on your way down or are you on your way up, is a key question that separates the doers from the talkers. In all modesty, we count ourselves among the doers in this area, and I think the numbers bear it out. Again, suffice it to say all of this reviewed with Ernst & Young, our auditors, and all of this fully in compliance with the requirements of the Science Based Targets initiative, which we see as the gold standard in this area. As you know, their work has the full backing from the United Nations Global Compact and is largely seen as completely above board and the best standard out there.

Oh, you're on your way up is a key question that separates the doors from the talk us and they're all modesty, we count ourselves among the doors in this area and I think the numbers bear it out okay.

Suffice it to say all of this reviewed with Ernst <unk> young our auditors and all of this fully in compliance with their requirements.

At the same pace science based target initiative, which we see as the gold standard in this area as you know their work has the full backing from the United Nations Global compact and its largely seen as completely above board and the best standard out there.

Mark Schneider: I would also like to confirm that we are fully on track for our targeted 20% reduction by the year 2025, and a targeted 50% reduction by the year 2030. Again, this is the decade where action needs to happen and where results need to roll in. I think in our case, they have started to roll in, and we're very proud of that. With this, let me turn to the 2022 guidance and also the midterm outlook. In line with what we told you about the sustained mid-single-digit performance, we do guide to organic sales growth of around 5% in 2022. We're targeting an underlying trading operating profit margin between 17% and 17.5%.

I would also like to confirm that we are fully on track for our targeted 20% reduction by the year 2025, and a target of 50% reduction by the year 2030. So again. This is a decade, we're actually needs to happen and when results need to roll in and I think in our case they have started to roll in and we're very proud of.

All of that.

With this let me turn to the 2022 guidance and also the midterm outlook.

So in line with what we told you about the sustained mid single digit performance, we do guide to organic sales growth of around 5% in 2022.

And we're targeting an underlying trading operating profit margin between 17 and 17.5% the obvious question compared to the 17.4% that we achieved in 2021 is is this conservative and the answer is yes. It is conservative because I think being conservative in a volatile environment.

Mark Schneider: The obvious question compared to the 17.4% that we achieved in 2021 is this conservative? The answer is, yes, it is conservative, because I think being conservative in a volatile environment with significant inflation around us and uncertainty about what will happen later this year is the right way to approach it. It's very consistent with the kind of approach we've taken to our guidance practice in the past years. As always, looking at the last bullet point, the underlying earnings per share in constant currency and capital efficiency are expected to increase. Then turning to the midterm outlook, we're fully confirming the expectation of sustained mid-single-digit organic sales growth. Very importantly, we also see the return to continued moderate underlying trading operating profit margin improvements.

With significant inflation around us and uncertainty about what will happen. Later this year is the right way to approach it and it's very consistent with the kind of approach we've taken to our guidance practice in the past years.

As always looking at the last bullet point, the underlying earnings per share in constant currency and capital efficiency are expected to increase.

And then turning to the midterm outlook, we're fully confirming the.

The expectation of sustained mid single digit organic sales growth and then very importantly, we also see the return to continued moderate underlying trading operating profit margin improvement. So this is another key hallmark off the old Nestle more or less you know with operating leverage and efficiency gains over time that this.

Mark Schneider: This is another key hallmark of the old Nestlé model, as you know, with operating leverage and efficiency gains over time that this supports our operating margins, and we fully intend to return to that. As always, continued prudent capital allocation and capital efficiency improvements. This concludes my part of the presentation. Let me hand it over to François now, and then we'll be back for the Q&A. Thank you.

Supports our operating margins and we fully intend to return to that and as always continued prudent capital allocation and capital efficiency improvements.

This concludes my part of the presentation, let me hand, it over to Frank One now and then we'll be back for the Q&A. Thank you.

François-Xavier Roger: Thank you, Mark. Good morning or good afternoon to you all. I will now go into further details on our financial performance in 2021, starting first with a look at the components of growth. Organic growth was 7.5%. RIG was strong at 5.5%, with positive contributions from volume and mix. Pricing increased to 2% with an acceleration to 3.1% in Q4. Acquisitions net of divestitures reduced sales by 2.9%, largely relating to the Nestlé Waters North America, Yinlu, and Herta transactions, which more than offset the acquisition of the core brands of The Bountiful Company and Freshly. The negative impact on sales from foreign exchange moderated to 1.3%, turning even positive in H2.

Thank you Mark good morning, or good afternoon to you all I will not go into further details on our financial performance in 2021, starting first with a look at the components of growth.

Organic growth was seven 5% re was strong at 545 quarters.

We supposed to take contributions from volume and mix.

Pricing increased two 2% with an acceleration to three 1% in the fourth quarter.

Acquisitions net of divestitures reduced sales by two 9% largely relating to the initially what else in North America, you do have that transactions, which more than offset the acquisition of the Ko brands of the Bountiful company. Unfortunately.

The negative impact on sales from foreign exchange moderately to one 3% turning even positive in the second half.

François-Xavier Roger: Total sales were CHF 87.1 billion, a 3.3% increase versus last year on a reported basis. This slide illustrates the development of our sales by geography and includes both our zones as well as our globally managed businesses. Organic growth was positive in all geographies, with particular strengths in the Americas and MENA. The Americas reported close to 10% organic growth, building on strong sales development in 2020. MENA saw high single-digit growth, reaching the highest level in the last decade. AOA posted mid-single digit growth in a difficult environment. Growth was balanced with contribution from developed and emerging markets. Organic growth in developed markets was strong at 7.2% based on disciplined execution, a resilient supply chain, and broad-based market share gains.

Total sales were $87 1 billion Swiss francs, the three 3% increase versus last year on a reported basis.

These slides illustrate the development of our sales by geography and includes both our zones as well as a globally managed businesses.

Organic growth was positive in all geographies, we spotted your loss trends in the Americas on immuno.

The Americas reported close to 10% organic growth building on strong sales development in 2020.

And not so high single digit growth, reaching the highest level in the last decade.

Anyway posted mid single digit growth in a difficult environment.

Growth was balanced with contribution from developed and emerging markets are.

We're getting growth in developed markets was strong at seven 2% based on disciplined execution, a resilient supply chain on broad based market share gains.

François-Xavier Roger: Growth in emerging markets was 7.8% based on strong contribution from Brazil, India, Russia, and Mexico. Let's now look at the breakdown of sales by channel. Organic growth for retail sales remained strong at 6.4%, with a high base of comparison in 2020. Growth in out-of-home channels reached 24.5%, helped by a low base of comparison due to the pandemic. We saw broad-based growth across most of our categories in 2021, demonstrating that our diversified portfolio is well geared for fast-changing trading conditions. Our largest category is powdered and liquid beverages, accounting for more than a quarter of our total sales. Coffee, the largest component, posted around 10% growth, supported by Nescafé, Nespresso, and Starbucks products.

Growth in emerging markets was seven 8% based on strong contribution from Brazil, India, Russia and Mexico.

Let's now look at the breakdown of sales by channel.

Organic growth for retail sales remained strong at six 4% with a high base of comparison in 2020.

Growth in out of home channels reached 24, 5% helped by your low base of comparison due to the pandemic.

We saw broad based growth across most of our categories in 2021, demonstrating that our diversified portfolio is well geared for fast changing trading conditions.

Our largest category you spell delle donne liquid beverages accounting for more than a quarter of our total sales.

Coffee the largest component posted around 10% growth supported by Ms, Jessie Nespresso and Starbucks products.

François-Xavier Roger: Sales of Starbucks products grew by 17.1% to reach CHF 3.1 billion, and we have grown this business by more than 50% over the last three years. We have now captured close to 20% of the Nespresso-compatible capsules market globally. Pet care, our second-largest category, maintained its strong growth momentum. Most segments and geographies grew at a double-digit rate with market share gains. The performance in pet care was driven by continued e-commerce growth and increased demand for premium products. Nutrition and health science grew at 1.4%. Nestlé Health Science grew at a double-digit rate, building on a strong sales development in 2020. The business saw broad-based market share gains across markets and categories, particularly vitamins, minerals, and supplements.

Sales of Starbucks products grew by 17, 1% to reach 3.1 billion Swiss francs, and we have grown this business by more than 50%. Although the last three years, we have not captured close to 20% of the Nespresso compatibles kept suited market globally.

Pet care of cigar largest category maintained its strong growth momentum.

Most segment on geographies grew at a double digit rate with market share gains.

The performance in Pet care was driven by continued e-commerce growth and increased demand for premium products.

Nutrition and health Science grew at one 4% Nestle Health Science grew at a double digit rate building on the strong set of development in 2020.

The business saw broad based market share gains across market some categories, particularly zeta means many older unsub elements.

François-Xavier Roger: Sales in infant nutrition were impacted by a sales decrease in China and lower birth rates globally in the context of the pandemic. Prepared dishes and cooking aids saw 6.6% growth, led by ambient culinary and frozen meals. Plant-based food products continued to deliver strong double-digit growth, with sales reaching around CHF 800 million. Milk products and ice cream products grew by 5.9%. The key growth drivers were premium and fortified milks, as well as coffee creamers and ice cream. Growth in confectionery was 7.9%, reflecting a recovery in impulse and gifting products. Water posted 6.8% growth, supported by a steady recovery in out-of-home channels and a low base of comparison. Let's now move to the performance of some of our key growth platforms.

Sales and infant nutrition were impacted by your sales decrease in China, and low L. Bell strides globally in the context of the pandemic.

Prepared dishes and cooking AIDS saw $6 six boats on growth led by Amgen culinary and frozen meals.

Plant based food products continued to deliver strong double digit growth, we sell is reaching around 800 million Swiss francs.

Milk products on ice cream products grew by five 9% the key growth drivers, where premium and fortified milks as well as coffee creamers on ice cream.

Growth in confectionery was seven 9%, reflecting a recovery in in person gifting products.

What posted 636, 8% growth supported by a steady recovery in out of home channels under low base of comparison.

Let's now move to the performance of some of our key growth platforms.

François-Xavier Roger: We continue to see strong demand for premium products with organic growth reaching 12%. Premium products now account for 35% of group sales. Premiumization continues to be a key component of our portfolio transformation, fueled by innovation. E-commerce sales grew by 15.1%, reaching 14.3% of group sales. Growth was broad-based with strong momentum in most categories, particularly pet care, coffee, and Nestlé Health Science. Overall, portfolio management had a positive impact on our growth. Businesses acquired since 2017 generated sales of CHF 6.8 billion in 2021, growing 2.5 times faster than the group average at 18.2%. In 2021, our underlying trading operating profit margin decreased by 30 basis points to 17.4%.

François-Xavier Roger: We continue to see strong demand for premium products with organic growth reaching 12%. Premium products now account for 35% of group sales. Premiumization continues to be a key component of our portfolio transformation, fueled by innovation. E-commerce sales grew by 15.1%, reaching 14.3% of group sales. Growth was broad-based with strong momentum in most categories, particularly pet care, coffee, and Nestlé Health Science. Overall, portfolio management had a positive impact on our growth. Businesses acquired since 2017 generated sales of CHF 6.8 billion in 2021, growing 2.5x faster than the group average at 18.2%. In 2021, our underlying trading operating profit margin decreased by 30 basis points to 17.4%.

We continue to see strong demand for premium products with organic growth, reaching twist persons premium products now account for 35% of group sales.

Premium musician continues to be a key component of our portfolio transformation fueled by innovation.

E Commerce sales grew by 15, 1%, reaching 14, 3% of group sales.

Growth was broad based with strong momentum in most categories, particularly petcare coffee unnecessary health science.

Overall portfolio management had a positive impact on our growth.

Businesses acquired since 2017 generated sales of $6 8 billion Swiss francs in 2021 growing two five times faster than the group average at 18, 2%.

In 2021, our underlying trading operating profit margin decreased by 30 basis points to 17, 4%.

François-Xavier Roger: One-off integrations related to the acquisition of the core brands of The Bountiful Company had a negative impact of around 10 basis points. The remaining decrease reflects time delays between cost inflation and pricing actions. In 2021, gross margin decreased by 130 basis points. Inflation was significant and broad-based across raw and packaging material, as well as transportation and energy costs, particularly in H2. Mitigating actions, particularly pricing, took some time to take effect. Distribution cost as a percentage of sales decreased by 20 basis points, mainly as a result of the disposal of the Nestlé Waters brands in North America. Administration and marketing expenses decreased by around 80 basis points as a percentage of sales based on strong operating leverage and efficiencies. At the same time, we continue to invest for growth, increasing our consumer-facing marketing expenses in constant currency.

Wonder if integrations related to the acquisition of the core brands of the Bountiful company had the negative impact of around 10 basis points.

The remaining decrease reflects time delays between cost inflation and pricing actions.

In 2021 gross margin decreased by one on rhythm 30 basis points inflation was significant and broad based across raw and packaging material as well as transportation on energy cost, particularly in the second half.

Mitigating actions, particularly pricing took some time to take effect.

Distribution costs as a percentage of sales decreased by 20 basis points, mainly as a result of the disposal of the initially what those brands in North America.

Administration, and marketing expenses decreased by around 80 basis points as a percentage of sales based on strong operating leverage and efficiencies.

At the same time, we continue to invest for growth, increasing our consumer facing marketing expenses in constant currency.

François-Xavier Roger: The group return on invested capital before goodwill and intangible increased by 60 basis points to 41.7%, reflecting improved operating performance, particularly sales growth. The group's return on invested capital was 14.2% when excluding the Wyeth impairment, with a decrease of 50 basis points, mainly reflecting the acquisition of the core brands of the Bountiful Company. Cash generated from operations decreased from CHF 17.2 billion to CHF 16.6 billion, mainly due to slightly higher working capital at year-end. In the context of significant supply chain disruption, the group increased its inventory levels temporarily. Capital expenditure increased in the short term to meet strong volume demand, particularly for Purina pet care and coffee. As a result, free cash flow decreased from CHF 10.2 billion to CHF 8.7 billion.

François-Xavier Roger: The group return on invested capital before goodwill and intangible increased by 60 basis points to 41.7%, reflecting improved operating performance, particularly sales growth. The group's return on invested capital was 14.2% when excluding the Wyeth impairment, with a decrease of 50 basis points, mainly reflecting the acquisition of the core brands of the Bountiful Company. Cash generated from operations decreased from CHF 17.2 to 16.6 billion, mainly due to slightly higher working capital at year-end. In the context of significant supply chain disruption, the group increased its inventory levels temporarily. Capital expenditure increased in the short term to meet strong volume demand, particularly for Purina pet care and coffee. As a result, free cash flow decreased from CHF 10.2 to 8.7 billion.

The group returns on invested capital before goodwill and intangible increased by 60 basis points to 41, 7%, reflecting improved operating performance, particularly standards girls.

The group's return on invested capital was 14 14, 2% when excluding the wireless impairment with a decrease of 50 basis points, mainly reflecting the acquisition of the KOL brands of the bounty food company.

Cash generated from operation decreased from $17 2 billion Swiss francs to $16 6 billion suites for Swiss francs, mainly due to slightly higher working capital at yearend.

In the context of significant supply chain disruption the group increased its inventory levels temporarily.

Capital expenditure increased in the short term to meet strong volume demand, particularly for Purina Petcare on coffee.

As a result free cash flow decreased from $10 2 billion to $8 7 billion Swiss francs.

François-Xavier Roger: This concludes my presentation, and now we are happy to take your questions.

This concludes my presentation and now we are happy to take your questions.

Mark Schneider: The first question is from Corinne Gretler at Bloomberg. Some companies warn that inflation across the board is shrinking consumers' budget, but that premium products continue to outperform. Is that mirrored at Nestlé, or are you seeing any down trading? When do you expect price increases to cause volumes to decline? Corinne, that is a very important question and one that the entire industry is watching very closely. Especially after some of the support checks in some countries due to the pandemic, question is at what point will consumers feel the pinch and will they trade down, or will they continue with the current consumption levels? The latest data, when you look at the United States, for example, and yesterday's announcement about consumer activity continued to point to a very vibrant consumer environment.

So the first question is from current correctly or Bloomberg some companies want that inflation across the board is shrinking consumers' budget, but.

But that premium products continue to outperform is that merit at Nestle are you seeing any down trading when do you expect price increases to cause volumes to decline.

Chris that is a very important question and one that the entire industry is watching them very closely.

So, especially after some of the support checks in some countries due to the pandemic question is at what point will consumers feel a pinch and will.

Will they trade down or will they continue with the current consumption levels. The latest data when you look at the United States for example, and yesterday's announcement about consumer activity.

Continue to point to a very vibrant consumer environment, but it is something that we watch for very closely so generally premium products as we know from past downturns do hold up very well.

Mark Schneider: It is something that we watch for very closely. Generally, premium products, as we know from past downturns, do hold up very well. We see most of the pressure in mid-range products. We have seen some of the down trading in more exposed economies last year, for example, in developing markets. Overall, we believe that, as François pointed out, with the strength of our premium products and also some of the efficiencies we were able to gain, that we have been able to offset any negative impact there. Next question is from Tavia Von Off at AWP. Your competitors seem to be suffering more with margin pressure than you. What is Nestlé doing better? It's hard to comment on our competitors.

We see most of the pressure in mid range products.

And we have seen some of the down trading in more exposed economies last year for example in developing markets, but overall, we believe that as Scott pointed out with the strength of our premium products and also some of the efficiencies we were able to gain that we have been able to offset any negative impact there.

Next question is.

From Tabi iPhone off at AWP Youre.

Your competitors seem to be suffering more with margin pressure than you what is necessarily doing bedroom.

It's hard to comment on our competitors you know event overall efficiency has been one of our key priorities for several years, we started to work on that several years ago, you've seen this exemplified with our operating margin improvement.

Mark Schneider: You know that overall efficiency has been one of our key priorities for several years. We started to work on that several years ago. You've seen this exemplified with our operating margin improvement. Obviously, in an environment where we knew from the beginning that we have to price very responsibly, we looked first at all internal efficiency upsides to make sure that we can spare our consumers any unnecessary inflation. Hence that efficiency focus was certainly redoubled in 2021 and continues to be a top priority in 2022. In size of the magnitude of inflation around us, obviously pricing also had to react.

Obviously in an environment, where we knew from the beginning that we have to price very responsibly. We looked first at all internal efficiency upsides to make sure that we can spin our consumers any unnecessary inflation.

And hence that efficiency focus will certainly be doubled in 2021 and it continues to be a top priority in 2022.

But inside inside of the magnitude of inflation around what has obviously pricing also had to react and just as Paul pointed out all throughout 2021, you've seen continued pricing action and that will also have to continue in 2022, because we still see continued and significant cost inflation.

Mark Schneider: Just as François pointed out, all throughout 2021, you've seen continued pricing action, and that will also have to continue in 2022 because we still see continued and significant cost inflation. Next question is from Corinne Gretler at Bloomberg. You've spoken about being disciplined in acquisitions. Would you ever consider partnering with private equity firms to make bids for big portfolios or consumer divisions? Corinne, I think generally, when you look at our past deal-making activity over long periods of time, I think one of the hallmarks of Nestlé has been to be very creative when it comes to deal-making. You always have to size up each and every individual situation and circumstance and see what makes sense.

Next question is from current correctly like Bloomberg, you've spoken about being disciplined in acquisitions would you ever consider partnering with private equity firms to make bids for big portfolios or consumer divisions.

Correct I think generally when you look at our past dealmaking activity over a long periods of time.

I think one of the hallmark shelf necessarily has been to be very creative when it comes to dealmaking.

You always have to size up each and every individual situations and circumstance and see what makes sense.

Mark Schneider: To give you a good example for partnering with private equity, look at our Froneri joint venture in the ice cream business, which I think financially has been very attractive for us. But more importantly, it has also done wonders for the business because it created a world-class player in the ice cream business that has consistently now been able to gain market shares in key markets. I think we'll judge every new situation as it comes along and then try to find the most efficient and value-generating solution for Nestlé. Yeah, we're very comfortable working with private equity where needed, but of course, we also have the balance sheet and the cash to completely fund acquisitions on our own where it makes sense.

To give you a good example for partnering with private equity you look at our coronary joint venture in the ice cream business, which I think financially has been very attractive for us but more importantly, it is also done one does for the business because it created a world class player in the ice cream business that has consistently been able to gain market shares in key.

Key markets and so I think we'll judge every new situation as it comes along.

And it's been trying to find the most efficient and value generating solution for Nestle and so yeah, we're very comfortable working with private equity where needed but of course, we also have the balance sheet and the cash to completely fund acquisitions on our own where it makes sense, so before turning to the financial side.

Mark Schneider: Before turning to the financial side, what is much more important is the strategic fit and the cultural fit, and basically, you know, our assessment, you know, if the deal long-term for this company makes sense. Next question is from Tavia Von Off from AWP. You say that your pricing needs time to take effect, or you're too slow with price increases. As mentioned, again, we try to spare consumers any unnecessary inflation, which is why we turned internally towards our own efficiencies first and continue to do that. Of course, it's not about being fast or slow, it's about honoring contracts that you have in place. In many jurisdictions, the way our contracts with retail partners go, you cannot just jack around prices from one day to another.

It's much more important is the strategic fit and the cultural fit and basically you know our assessment if the deal long term for this company makes sense.

Okay.

Next question is from <unk> <unk> from AWP, you say that your price in each time to take effect, we are too slow with price increases.

As mentioned again, we tried to spare consumers any unnecessary inflation, which is why we turned internally to watch our own efficiencies first and continue to do that.

And then of course, it's not about being a fast or slow it's about honoring contracts that you have in place and in many jurisdictions the way our contracts with retail partners go you cannot just that Jack around prices from one day to another are there certain dates when you're going to reset prices and hence we had to on a bad so it was always clear and.

Mark Schneider: There's certain dates when you can reset prices, and hence we had to honor that. It was always clear, and I think the rest of the industry is no different from that there was going to be a time lag between inflation rising and then our price adjustments. We've been mentioning that all throughout last year because we knew what the nature of our contract is. We're fully in line with that. It was very clear that when you have this compression point, when inflation starts to rise, that temporarily this was gonna be a drag on our margin. In the future, one of two things is gonna happen.

I think the rest of the industry is no different from that that there was going to be a time lag between inflation rising and then our price adjustments.

Been mentioning that all throughout last year, because we knew what the nature of our contract is and so we are fully in line with that and it was very clear that when you have this compression point when inflation starts to to rise that temporarily if this was going to be a drag on our margin.

In the future one of two things is going to happen either we're settling into a regular inflation pattern and in fact case I think the company can address so its not a permanent downward pressure on our margin or inflation at some point will ease again and then also I think you will see some of those negative effects are reversing.

Mark Schneider: Either we're settling into a regular inflation pattern, and in that case, I think the company can adjust, so it's not a permanent, downward pressure on our margin, or inflation at some point will ease again, and then also, I think, you will see some of those negative effects, reversing themselves. The next question is from Sophie Marenne at AGEFI. The trend of home working will continue, that's sure. But with the returns to the office, are you expecting some slowdowns in certain categories like ready meals and frozen foods? How do you prepare for it? Sophie, very important question, and as I mentioned when I took you through the coffee performance, this whole notion of the at-home revolution, that's something I very strongly believe in. That, to me, is a longer-term trend that is here to stay.

Themselves.

The next question is from Sophie Moran, It's H E F. I the trend of Homeworking will continue about sure, but where the returns to the office are you expecting some slowdowns in certain categories like ready meals in frozen foods, how to prepare for it.

So if you're a very important question and as I mentioned when I took you through the coffee performance. This whole notion of the at home Revolution, that's something that I very strongly believe in and that to me is a longer term trend that is here to stay and we all learnt.

Mark Schneider: We all learned new things in our repertoire when it comes to working remotely, in those years, 2020 and 2021. It's a safe assumption, looking around the world and companies' announcements about more flexible work patterns, that some of this is here to stay. We're also adjusting for this at Nestlé, where we offer much more flexibility than we offered in the past. As a result of that, at-home consumption of coffee, frozen meals, and many other products will probably continue to benefit. Still, people will need to have coffee, they will need to have food, and when they return to a regular work-life pattern, they will also be time-squeezed, so convenience will be important. The fact that you can prepare a meal quickly or that you can prepare your coffee quickly.

New things and I'll repertoire, when it comes to working remotely in.

In those years 'twenty to 'twenty and 2021 and it's a safe assumption looking around the world and company's announcements about more flexible work patterns.

That's somewhat this is here to stay and we're also adjusting for this at Nestle, where we offer a much more flexibility than we offered in the past and as a result of that at home consumption of coffee frozen meals and many other products. It will probably continue to benefit and still people will need to have coffee they will.

Need to have food and Tim.

When they returned to a regular work life pattern. There will also be time squeeze so convenience will be important. The fact that you can prepare a meal quickly well that you can prepare your coffee quickly. So all of this I think plays into our hands because we do have strong at home market shares and we do have products that are very much geared towards not only enjoyment and top.

Mark Schneider: All of this, I think, plays into our hands because we do have strong at-home market shares, and we do have products that are very much geared towards not only enjoyment and top quality, but also convenience when it comes to preparing them. What you may see is short-term year-over-year slowdowns. I mean, you see this exemplified in our guidance for this year, that we're guiding towards 5% organic growth after 7.5. That's normal. That's math. That's, you know, one year that's very strong, kind of creates a higher base for the next year. But the more important value creation outlook is mid and long term, and there I think we're right on story here when it comes to this at-home revolution. The next question is from Johannes Ritter at FAZ.

Quality, but also convenience when it comes to preparing them. What you may see is short term year over year slowdown I mean, you see this exemplified in our guidance for this year they were guiding towards a 5% organic growth after seven and a half that's normal that's math. That's you know one year, that's very strong.

Kind of creates a higher base for the next year, but the more important value creation outlook is mid and long term and there I think we're right on story here when it comes to this at home Revolution.

The next question is from Johan Switzer at if asset profit margins in the water business have fallen further how we are responding to this will be the best for the low mushroom water plants, when we will see better results.

Mark Schneider: Profit margins in the water business have fallen further. How are we responding to this? Will you divest further low-margin water brands? When will we see better results? I think our focus on the premium brands, which we started to put in place last year, has been fully borne out. I think this is a much more resilient segment of the market. It's also one where we create more consumer value, especially with some of our products that offer additional benefits when it comes to taste and nutritionals. Clearly, looking at it from a growth rate point of view, this is the way we go.

So I think our focus on the premium brands, which we started to put in place last year has been fully borne out and I think this is a much more resilient segment of the market. It's also one where we create more consumer value, especially with some of our products that offer additional.

That's when it comes to taste and Nutritionals and so clearly looking at it from a profile point of view.

This is the way we go obviously last year was still one where for part of the year we held on.

Mark Schneider: Obviously, last year was still one where for part of the year, we held on to these more mainstream brands, and where we had to face the separation itself, and we had to face significant cost increases, in particular on shipping and trucking. I don't think that last year is a good yardstick for this. Going forward, this premiumization added-value strategy, I think, continues to be our main focus and has been already borne out by some of the short-term results we've seen. Next question is from Pearly Neo from FoodNavigator. First, could you please provide more details on the results you have seen from the Asia-Pacific region and your thoughts on the outlook for this region in the coming year? Second, what are the high-growth product categories identified for the Asia-Pacific region?

To these more mainstream brands and where we had to face the separation itself and we had to face significant cost increases in particular on shipping and trucking.

And so I don't think that last year is a good yardstick for this going forward. This premium amortization added value strategy. I think is contingent continues to be our main focus and has been already borne out by some of the short term results we've seen.

Next question is from currently nail from food navigator.

First could you. Please provide more details on the results you have seen from the Asia Pacific region, and your thoughts on the outlook for this region in the coming year.

Second what are the high growth product categories identified for the Asia Pacific region, and third this nest to predict any increase of product prices in markets, including developing markets within APAC.

Mark Schneider: Third, does Nestlé predict any increase of product prices in markets, including developing markets, within Asia Pacific? So I'm very pleased overall with the performance of our zone AOA, and that includes the Asia Pacific region. I would argue that Asia Pacific has been one of the growth drivers in that zone AOA performance. As you know, we did have some issues in our Chinese market activities last year, in particular on infant nutrition, and a lot of that was made up by very strong performance in Asia Pacific. We continue to be very bullish when it comes to the expectations of this region and very much open towards investing there and growing our presence. When it comes to the high-growth product categories, they're not that different from the rest of the group.

So I'm very pleased overall with the performance of our zone AOA.

And that includes the Asia Pacific region, and I would argue that Asia Pacific has been one of our growth drivers in that zone AOA performance. As you know we did have some issues in our Chinese market activities last year in particular in infant nutrition and a lot of that was made up by very strong performance in Asia Pacific.

So we continue to be very bullish when it comes to the expectations of this region and I'm very much open towards investing in there and growing our presence.

When it comes to the high growth product categories. They are not that different from the rest of.

Mark Schneider: I would add to that, some of our ready-to-drink products and some of our dairy products and nutrition, which continue to be, of course, of key importance, in those markets. When it comes to price increases, again, we will be very socially responsible in how we do this. Obviously, in the face of the significant inflation we're seeing, when we don't find another way to compensate for input cost increases, we also have to consider, pricing action. That applies to Asia Pacific just like to any other zone around the world. The next question is from Sophie Marenne at AGEFI. How to explain that the slowdown that has recently affected vegetarian alternatives to meat has spared Nestlé? And given its growth numbers, why don't you highlight this segment stories?

The crude and Tim I would add to that some of our ready to drink products in some of our dairy products and nutrition, which continue to be of course of key importance in those markets and then when it comes to price increases again.

We will be very socially responsible in how we deal with this but obviously in the face of the second half of inflation, we're seeing when we don't find another way to compensate for input cost increases. We also have to consider a pricing action that applies to Asia Pacific Trust too just like any other zone around the world.

Okay.

The next question is from Sophie Moran at a J F I.

To explain that the slowdown that has recently affected vegetarian alternatives to meet has spurred in Iceland and given its growth numbers why don't you highlight this segment.

Please.

Mark Schneider: Sophie, it is part of our food category, and to whatever benefit you're seeing is then benefiting the food category overall. In order to highlight the performance, I pointed out the growth rate, which was solid double-digit. I think we also highlighted in our press release the absolute number, which is around CHF 800 million. It's a sizable, nice contributor. You know, anytime we can get our hands on a CHF 800 million business that grows double-digit, we are thankful for it. We're very glad about what we have created there, and most of that has been created through internal means, like developing exciting products and getting them to market under brands that really resonate with consumers, and just having a very compelling proposition there.

So if he so it is part of our food category and so to whatever benefit you are seeing it.

Then benefiting the food category overall.

And then in order to highlight the performance I pointed out the close rate, which was a solid double digit and I think we also highlighted in our press release, the absolute number which is around 800 million Swiss francs. So it's a sizable a nice contributor you know anytime we can get our hands on and that 800 million.

Shrank business that grows double digit we are thankful for it. So we're very clat about what we have created there and most of that has been created through internal means like developing exciting products and getting them to market and the brands that really resonate with consumers and just having a very propelling proposition there.

Mark Schneider: We have a strategy that combines strong out-of-home and in-home presence, so I think this is one that sets us apart. Through Nestlé Professional, we have that meaningful out-of-home presence, which rebounded nicely in 2021. Of course, we have with Garden Gourmet and with Sweet Earth, for example, strong brands that cater to the retail market and the retail consumer. Across the board, we're very happy with how this is doing. I think one strategy focus that sets us apart from some of our competitors is the fact that we are increasingly betting on specialties. Think about plant-based alternatives to tuna, shrimp, and egg products, and also ready-made meals that include plant-based ingredients.

We have a strategy that combines strong out of home and in home presence. So I think this is one that sets us apart through NASA professionals, we have that meaningful out of home presence, which rebounded nicely in 2021.

Then of course, we have with garden Gourmet and what we are for example, a strong plans that cater to the retail market and the retail consumer and so across the board, we're very happy with how this is doing.

One strategy focus that sets us apart from some of our competitors is the fact that we are increasingly betting on specialties. So think about plant based alternatives to tuna and shrimp and egg products and also a ready made meals and that include plant based ingredients. So it's not just the sheer ingredients like the borough.

Mark Schneider: It's not just the sheer ingredient, like the burger or the chicken pieces, but rather the full ready-made meal that then builds on these high-quality, plant-based, ingredients. The next question is from Jamey Keaten, Associated Press. You mentioned supply chain issues and declining birth rates during the pandemic having some impact on the business in 2021. Overall, where did you see the most impact from the COVID pandemic last year, and how will the implications from it affect the business, this year? I think one of the key areas. Obviously, I mean, every business somewhere or another got touched by the COVID pandemic and had to make adjustments and be very flexible and nimble.

All of the chicken pieces, but rather the fall, but he made meal that then builds on these high quality plant based ingredients.

The next question is from Jamie Keeton associated press.

You mentioned supply chain issues and declining birth rates during the pandemic, having some impact on the business in 2021, but overall, where did you see the most impact from the Covid pandemic last year and how will the emotions from it affect the business this year.

I think one of the key areas, obviously, I mean every business somewhere or another got touched by the COVID-19 pandemic and have to make adjustments and be very flexible and nimble.

Mark Schneider: One of the key impacts we've seen around the world has been on our infant nutrition business, where clearly during the COVID pandemic times, birth rates have decelerated faster than before. We believe that this is probably temporary and that there will be some rebound over time. This has simply not been a good time for people to start a family or enlarge their family, just simply due to medical concerns and the overall economic insecurity that came with the pandemic. We've also seen in some markets trading down to cheaper solutions, and that has some weighing on the business. I think some of that will correct itself. Then, of course, we also have a lot of homework to do.

One of the key impacts we've seen around the world has been on our infant nutrition business, where clearly.

During the Covid pandemic times birth rates have to accelerated faster than before we believe that this is probably temporary and that there will be some rebound over time. This has simply not been a good time for people to start a family or in Nash that family, just simply due to medical concerns and and.

The overall economic and security that came with the pandemic. We've also seen in some markets trading down to cheaper solutions and that has some weighing on the business and so I think some of that will correct itself. But then of course, we also have a lot of homemade.

Mark Schneider: Think about the Yinlu situation in China, which I think we are addressing very energetically right now. We've been hurting in this area for the past two years. The business leadership is now taking very decisive steps, and I hope that we can already point to improving results there for the year 2022. I see this completes the questions. Again, thank you very much for joining us today, and we look forward to staying in touch with you. As I mentioned at the beginning, I hope that for the next full year press conference, we will be able to see each other in person again.

Work to do so think about the wife situation in China, which I think we are testing a.

Very energetically right now we've been hurting in this area for the past two years. The business leadership has now taken very decisive steps and I hope that we can already point to improving results there for the year 2022.

Yeah.

I see this a complete the question. So again, thank you very much for joining us today, and we look forward to staying in touch with you as I mentioned at the beginning I hope that for the next full year Press conference, we will be able to see each other in person again and.

Mark Schneider: That will give us an opportunity over and above the information provided here through the presentations and press release to also showcase some of the products firsthand, and we always enjoy these opportunities. Thank you very much again for joining us today. Stay healthy, safe, and see you soon.

It will give us an opportunity over and above the information provided here for the presentation and press release to also showcase some of our products firsthand and we always enjoy these opportunities. So thank you very much again for joining us today stay healthy safe and see you soon.

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