Investor Presentaiton

Nestlé 2023 Half-Year Results Thursday 27th July 2023 adjusted. And so clearly, the decision and the consequence of getting out of this, if we do this over time, then will lead to reduced cost burden. And then obviously, as you mentioned in your question, organic growth does help a lot. Luca Borlini, Nestlé S.A, Head of Investor Relations: Next question is from Bruno Monteyne at Bernstein. Question on: EU legislation for sustainability and cost of Net Zero Free cash flow and level of Buybacks Bruno Monteyne, Bernstein: Thanks for your extra attention to palm oil in the results today. And obviously it highlights the focus of all the additional European Union legislation, whether it's a corporate sustainability, due diligence directive, and they're busily legislating for more. Now I acknowledge that you tend to lead in many areas of sustainability, but all the actual legislation tends to raise the bar even for good companies like yourselves. So given the latest EU legislations, what are the areas where you expect you'll have to make further improvement to be in line with this latest EU legislation? Are you still able to stay within the cost that you identified, I think 1 or 2 years ago, when you talked about the cost of Net Zero, is that cost going up because of the legislation? The second one is around free cash flow. I mean even despite the improvement free cash flow to a sort of back at the old levels, but when I'm trying to be optimistic, I get to about CHF 9 billion to CHF 10 billion free cash flow for Nestle, but you're paying out nearly CHF 8 billion of dividends, which only leaves by CHF 1 to 2 billion for buybacks. You're buying back a lot more than that and your leverage is already a bit high. The cost of debt is getting ever higher. So my question is really is the level of buybacks that you're currently doing given the level of free cash flow, isn't it too high? And shouldn't you start to signal to moderate that level of buybacks going forward given the higher cost of financing? Mark Schneider, Nestlé S.A. Chief Executive Officer: Let me cover the first question and then hand it to François for the free cash flow question. So clearly, on palm oil, I see ourselves very well equipped for the oncoming EU legislation. Remember, the numbers we were quoting you here, the 96%, is a global number. And so within that envelope of 96%, we can easily then direct deforestation-free palm oil to anything that gets sold in the EU perimeter. 21 21

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