BUSINESS REVIEW North America SEPTEMBER 2010...dog treats in the USA. • Waggin’ Train is the fastest growing brand in the dog snacks sub-segment and has grown the total dog snacks

Nestlé Purina PetCare

Nestlé PURINA PetCare

BUSINESS REVIEW

North America

SEPTEMBER 2010



This presentation contains forward looking statements which

reflect Management’s current views and estimates. The

forward looking statement involve certain risks and

uncertainties that could cause actual results to differ materially

from those contained in the forward looking statements.

Potential risks and uncertainties include such factors as

general economic conditions, foreign exchange fluctuations,

competitive product and pricing pressures and regulatory

developments.

Disclaimer



• NPPC is the leading PetCare Company in North America.

• We are number 1 or 2 in every category.

• Market Shares have increased 2.0 pts. over the past 3 years.

• We are responsible for 42% of the category growth over the past 5

years and 57% of the growth in the grocery and mass channel

(versus our market share which is currently 33%).

• We are ahead of the acquisition targets.

• Our scale and operating model provide a sustained advantage

within our petcare competitive set.

Key FactsNPPC – North America



NORTH

AMERICA

41%

LATAM

15%

AOA

10%

EUROPE

34%

NORTH

AMERICA

34%LATAM

13%

AOA

14%

EUROPE

39%

North America is a large region for pet food.

Nestlé Purina Global PetCare Sales for 2009 were $12 billion.

VolumeValue



42%

17%

10%

11%

9%

2% 9%

Dry Dog

Dry Cat

Wet Dog

Wet Cat

Dog Snacks

Cat Snacks

Litter

49%

14%

7%

6%

3%

21%

Value Volume

The USA market is biased to Dry Petfood.



Price

Increase

Q1 ’06

Price

Increase

Q2 ‘07

Price

Increases

Q1 & Q3

‘08

Price

Increase

Q1 ‘09

% Chg vs YA

The Petfood Category Is resilient with the

ability to cover cost increases with pricing.



3 YR

CAGR

Dog 1.5%

Cat 0.9%

Mio

Pet Population continues to experience

steady growth.



Food

27%

Pet

Specialty30%

Mass

30%

All Other

13%

Major channels are fairly similar in size

with Pet Specialty growing faster.

(Vet, Club, Value)



NPPC posts share gains in petcare across

all channels over the past 4 years.

Food

Mass

Pet

Spec



NPPC

33.6%

Mars

14.7%

P&G

7.6%

Colgate

8.1%

Delmonte

9.8%

PVL

10.9%

A/O

15.4%

NPPC is the only branded vendor to achieve

$ share gains in 2010.

+.2

-.4

-.6

-.1

-.2

+.2

+.9



NPPC is #1 or Strong #2 in all category segments.

NPPC

Market Share

NPPCShare Position

Dry Cat 38% #1

Wet Cat 63% #1

Dry Dog 28% #1

Wet Dog 28% #2

Total Snacks 24% #1

Litter 32% #1



2004 2007 2010

4

5

6

7

8

Actual Sales

Aq. Assumption Sales

Actual EBIT

Aq. Assumption EBIT

Sales and Profits are ahead of acquisition targets.

INDEX

SALES 110 119 133

EBIT 117 125 133

INDEX = Value versus

that year’s assumption



Friskies

Dog Chow

Beneful

Fancy Feast

Other

ONE

Cat Chow

Tidy Cats

Alpo Dog

Pro Plan

Beggin

Friskies

Dog Chow

Beneful

Fancy Feast

Other

ONE

Cat Chow

Tidy Cats

Alpo Dog

Pro Plan

Beggin

9.3%

9.7%

28.7%

10.6%

-3.5%

6.0%

11.0%

3.8%

2.8%

8.7%

10.7%

Our leading brands generally growing faster than

our overall portfolio.

Overall Portfolio CAGR 04-10 is 8.0%

04-10

CAGR



Innovation and renovation platform is a critical

component of our growth over the past 5 years.

0

2

4

6

8

2004 2005 2006 2007 2008 2009

Sales

16% 19% 23% 20% 19% 21%

$ B

illio

ns

I & R



Innovation is very broad based.



Innovation is more than product.



Innovation is more than product.



• 24 factories in North America.

• Based on “Make it where you sell it” model that moving raw

ingredients is more effective than moving finished goods.

• Delivers Best-In-Class total delivered cost and high service levels.

• Geographically distributed capacity and innovative portfolio

cleansing has indefinitely deferred capital for a new factory.

• 70% of customer shipments are “one touch” from the factory to

the customer enabled by scale and flexible, efficient business

practice incentives.

Product Supply CapabilitiesNPPC – North America



NPP NA Manufacturing Network

.

Flagstaff

Denver

Mississauga

Mechanicsburg

Oklahoma City

Atlanta

Innisfail

Clinton

Hager City

Zanesville

Dunkirk

Davenport

King William

Maricopa Springfield

Caledonia

Bloomfield

Moncton

JeffersonFt. Dodge

Crete Allentown

WeirtonSt Joseph



• Rigorous Segmentation drives financial and human resources to

high value customers.

• General manager mindset balances growth and customer

profitability in performance reviews and compensation.

• Local customer teams are empowered through flexible customer

specific funding plans.

• Team-based, multi-functional organizations with embedded supply

chain expertise.

• Balanced focus on Employee and Customer Satisfaction annual

measurement.

• Delivered at Best-in-Class cost.

Salesforce Capabilities Enabled by

Multi-functional Teams



• Waggin’ Train is a leading marketer of premium, meat based

dog treats in the USA.

• Waggin’ Train is the fastest growing brand in the dog snacks

sub-segment and has grown the total dog snacks sub-segment.

• Waggin’ Train has 3 of the top 5 SKU’s in the dog treat sub-

segment.

• Waggin’ Train fills a gap in our current dog treat portfolio and

provides a new growth platform with new consumers to the

Nestlé Purina business.

Waggin’ Train Acquisition



• NPPC North America is a growth business in a mature market.

• Category and market shares are growing.

• Our brands and our category have been very resilient during the

economic downturn.

• Our financial performance is significantly ahead of the acquisition

assumptions.

• Focus, scale and capability building in consumer insights, product

supply networks and customer relationship management create

gaps to our competition.

Key TakeawaysNPPC – North America

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BUSINESS REVIEW North America SEPTEMBER 2010...dog treats in the USA. • Waggin’ Train is the fastest growing brand in the dog snacks sub-segment and has grown the total dog snacks