Investor Presentaiton

Nestlé 2023 Half-Year Results François-Xavier Roger, Nestlé SA, Chief Financial Officer: Thursday 27th July 2023 Céline, you're absolutely right that, as I said earlier, so gross margin will increase materially in the second half again. That being said, don't forget as well that we put ourselves in an investment position to support growth and not everything that we will generate in terms of additional gross margin will flow to the bottom line, mainly because we invest to start with in marketing. So marketing as a percentage of sales was flat in H1, although it increased in local currency by more than 7%. But it was flat year-on-year. In the second half of the year, we plan that it will increase by probably 100 basis points, or more, versus the same period of last year in H2. So in addition to that, we still continue to invest in sustainability, in digitalization, in CapEx and so forth. And in addition to that there is still a little bit of uncertainty as well on the input cost evolution as we mentioned earlier, so we want to make sure that we keep some downward protection and as a consequence, we maintain our guidance for 17% to 17.5% UTOP for the full year. Luca Borlini, Nestlé S.A, Head of Investor Relations: Next question is from Patrik Schwendimann of Zurich Kantonal Bank. Questions on: Net Working Capital Gross margin in 2024 Patrik Schwendimann, ZKB: I have a question regarding the cash flow. There was a substantial negative impact from payables in H1, does this revert in the full year? Or what is your best guess assumption for the net working capital movement the full year, can you expect here already a lower net working capital year on year at the full year. And the second question again on the gross margin. You've seen very nice improvements since the second half of last year, but you're still far away from the level you have seen back in '21 and 2020. Do you see a chance to get already quite close next year to the '21 level? François-Xavier Roger, Nestlé SA, Chief Financial Officer: On the payables, it is really over the short term, the impact that we saw given that, as you know, we decided to bring our inventory back to the level where we were before because last year, we increased our inventory in the context of supply can disruption, which was a voluntary decision. I think it was a good decision, but we knew that we would have to address it and it has started already in H1, and we are very positive about it. 18

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