Investor Presentaiton

Nestlé 2023 Half-Year Results Thursday 27th July 2023 so we have to do it at the end of Q1. And we mentioned that by the way in the call in Q1 that we expected a little bit of pressure as a consequence of that in the second quarter because it has been relatively significant. We were catching up to a large extent with inflation that we received over the last 2 years. So elasticity was limited at group level. It was probably a bit higher in European context. We have always a little bit more cautious about the consumer sentiment in Europe. At the beginning of the year, it was more about energy crisis, which did not really crystallize, but we see that anyway, this is certainly Europe, the area where we are a little bit more cautious in terms of consumer sentiment with a little bit of elasticity, which is more a Q2 event. I think that this largely explained it. Don't forget either that there was one less trading day in Q2 versus Q1 was as well, which did put a little bit of pressure on Q2 RIG as well. Mark Schneider, Nestlé S.A. Chief Executive Officer: Let me comment on your second question regarding Nestlé Health Science. And look, the short answer is, yes, we're confirming everything that we said in Barcelona with regards to the target levels for 2025 on margin. But then also what was said about the recovery in organic growth in the second half of this year. So this is important to me. When you look at the first half, this is clearly the worst moment in time for a number of reasons. It's one of the businesses that I mentioned earlier, that still gets impacted, in the VMS area, by this post-covid compression. I mentioned that it just started to turn the corner now in May and June. And so I think that drag on growth will fall away. Clearly, then we're poised for much better growth in the second half as was outlined by Greg Behar even way back then because we saw it coming. We always had it in our models. Second thing is that we had planned for a long time to reap the full synergies from our various North American acquisitions by putting it all together on one operational backbone in the first half of this year. This has happened according to schedule. And so now the synergy delivery when it comes to the cost side, that really starts now to kick in, in the second half. And that will be one key driver, not the only one, but one key driver when it comes to the operating margin. The other one to keep in mind, if you're wondering about the building blocks and how to get to the 2025 margin level is clearly that, over time, the cost of maintaining PALFORZIA in the market will fall away. So clearly, there's a number of infrastructure costs related to maintaining that. Think about pharmacovigilance and such and the specialized sales force that will be 20 20

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