nestle internal audit

8/3/2019 Nestle Internal Audit

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INTERNAL

AUDIT REPORT

NESTLE


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Nestl S.A. is the largest food and nutrition

company in the world. Founded and headquartered

in Vevey, Switzerland, Nestl originated in a 1905

merger of the Anglo-Swiss Milk Company,

established in 1867 by brothers George Page andCharles Page, and Farine Lacte Henri Nestl,

founded in 1866 by Henri Nestl. The company

grew significantly during the First World War and

again following the Second World War, eventuallyexpanding its offerings beyond its early condensed

milk and infant formula products. Today, the

company operates in 86 countries around the world,

and employs over 280,000 people.


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FINANCIAL REPORT

Margins % ofSales

2009-12 2010-12

Revenue 100.00 100.00

COGS 42.01 41.79

Gross Margin 57.99 58.21SG&A 41.53 41.74

R&D 1.88 1.71

Other 1.15

Operating Margin 13.91 14.76Net Int Inc &

Other

-0.57 19.93

EBT Margin 13.34 34.69


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Profitability 2009-12 2010-12Net Margin % 9.69 31.20

Asset Turnover (Average) 0.99 0.99Return on Assets % 9.61 30.76

Financial Leverage

(Average)2.27 1.80

Return on Equity % 20.92 61.80

Return on Invested

Capital %14.40 44.38

Current Ratio

1.29 1.10Quick Ratio 0.49 0.78Operating Profit 15% 14.80%


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Efficiency 2009-12 2010-12Days Sales

Outstanding

43.67 40.57

Days Inventory 68.93 62.33

Payables Period 103.51 102.00

Cash ConversionCycle 9.09 0.90Receivables

Turnover

8.36 9.00

Inventory Turnover 5.29 5.86

Fixed Assets

Turnover

5.04 5.10

Asset Turnover 0.99 0.99


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MARKET SHARE SAMPLE


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STOCK PRICE PERFORMANCE

Stock Price

08/08/2011 08/12/2011


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EMPLOYEE TURNOVER

1.Programmes shares and best practices formanufacturing, leadership and people

development.

2.Major global effort in implementing safety

and health approach in the workplace.

3.SAP Development and Performance

Evaluation and Personal Development

Processes.4.Mentoring Scheme Programs.

5. International career Development.

6.Employee engagement


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LABOUR PRIORITIES

Respect the right of our employees

to establishand join organizations of their own choosing

and engage in constructive negotiations.

Offer competitive wages and

benefits that allow

our employees to cover their needs accordingto local standards of living.

Respect Corporate guidelines

regarding

temporary employees based on which

temporary staff shall only be used incircumstances where it is justified by the

temporary nature of the job and will not result

in unjustifiable differences in employment

conditions.

Respect Corporate guidelinesregarding

outsourced activities which indicate that

only those activities which are non-core to

the business may be outsourced and that the

people performing them will be treated fairly atall times.

Implement the Corporate guidelines

regarding

working time for our employees to assure a

safe and healthy workplace and a workingenvironment respectful of their family lives.

Treat every employee with dignity

and without

any tolerance for discrimination, harassment or

abuse.


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COMPETITIVE ADVANTAGE

Our unmatched product and

brandportfolio, with strong market

positions.

Over 20 Nestl brands have

annual

sales of over CHF 1 billion.

Whether

global or regional, our brands

are

always relevant to consumerslocally.

Our unmatched R&D is the

unseen

impetus behind the growth ofour

brands. It is science-based,

consumer centric and focused

on differentiation

from our competitors. It goes

beyond food to cover new

products,

packaging, technology and

manufacturing, quality andsafety.


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Our unmatched geographic

presence has been established

overmany years and is a reflection

of both

the breadth of our presence,

with ourbrands available more or less

everywhere, and the duration

for which

we have been present in

countries theworld over.

Our people, culture, values,

and

attitude enable us to bedecentralised

and entrepreneurial. It

combines

devolved responsibilities with acohesive strategic direction.

We are

patient and not averse to taking

reasonable risks. Our speed

and focusenable us to remain

competitive in spite

of any challenges in the

marketplace.


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CORE COMPETENCE

Nutrition, Health and Wellness.

Each of our product categories,

from

Chocolate to Baby Food, has a

specific

strategy to ensure that it can be the

nutrition leader in its space.

Emerging markets and Popularly

Positioned Products. We have

tailorednot just our products, but also our

business models and marketing mix

to ensure that we are best able to

realise the growing opportunity to

provide nutritious, affordable,

branded

food to lower income consumers

around the world.

Out-of-home consumption is

growing faster than in-home. We are

the largest branded manufacturer,with

a business built on branded

ingredients

but increasingly achieving newstandards in customer solutions,

systems and service.


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Innovation & renovation. Innovation

is about big steps and changing the

rules of the game, or even changingthe game. It is hard to copy. Its

rewards

can be measured by profitable

growthfor years to come and sustainable

competitive advantages. Renovat

is more incremental, and lies behind

the still-growing success of brands

such as Nescaf and KitKat,

both over 70 years old

Operational efficiency seeks toensure that we have the highest

quality,

the lowest cost and best

customer service. The aim is toimprove our

sustainability by being better,

faster, more efficient, less

wasteful and,

as a result, higher performing


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WEAKNESSESS

1.Increasing instance of productrecall hampering brand equity.

2.Limited presence in organicfoods market.

3. Lack in retail presence


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Choose Wellness

Choose NestleGood food, good life

nestle internal audit

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