2003 Financial Statements en
2003 Financial Statements en
2003 Financial Statements en
5 Consolidated income statement for the year ended 31st December 2003
6 Consolidated balance sheet as at 31st December 2003
8 Consolidated cash flow statement for the year ended 31st December 2003
10 Consolidated statement of changes in equity
12 Annex
12 Accounting policies
13 Financial risk management and commodity price risk management
13 Valuation methods and definitions
17 Changes in accounting policies and modification of the scope of consolidation
18 Notes
44 Principal exchange rates
45 Report of the Group auditors
46 Financial information – five year review
48 Companies of the Nestlé Group
As percentages of sales
EBITA (a) 12.5% 12.3%
Net profit 7.1% 8.5%
5
Nestlé Consolidated accounts of the Nestlé Group
Assets
Current assets
Liquid assets 8
Cash and cash equivalents 7'074 6'338
Other liquid assets 8'054 7'953
15'128 14'291
Trade and other receivables 9 12'851 12'666
Inventories 10 6'995 6'794
Derivative assets 11 669 959
Prepayments and accrued income 590 632
Total current assets 36'233 35'342
Non-current assets
Property, plant and equipment 12
Gross value 41'778 40'797
Accumulated depreciation (24'339) (23'772)
17'439 17'025
Investments in associates 13 2'707 2'561
Deferred tax assets 23 1'398 1'519
Financial assets 14 2'394 2'862
Employee benefit assets 21 1'070 1'083
Goodwill 15 26'745 25'718
Intangible assets 16 1'575 1'242
Total non-current assets 53'328 52'010
6
Nestlé Consolidated accounts of the Nestlé Group
Current liabilities
Trade and other payables 17 9'852 9'932
Financial liabilities 18 15'419 18'702
Tax payable 549 825
Derivative liabilities 19 846 384
Accruals and deferred income 3'699 3'894
Total current liabilities 30'365 33'737
Non-current liabilities
Financial liabilities 20 14'064 10'548
Employee benefit liabilities 21 3'363 3'147
Deferred tax liabilities 23 576 492
Tax payable 4 15
Other payables 305 400
Provisions 24 3'061 3'381
Total non-current liabilities 21'373 17'983
Equity
Share capital 25 404 404
Share premium and reserves
Share premium 5'926 5'926
Reserve for treasury shares 2'458 2'830
Translation reserve (5'630) (4'070)
Retained earnings 36'093 32'307
38'847 36'993
39'251 37'397
Less:
Treasury shares 26 (2'371) (2'578)
Total equity 36'880 34'819
7
Nestlé Consolidated accounts of the Nestlé Group
Operating activities
(a) The figure for 2002 includes the Net profit of consolidated companies (a) 6'000 7'389
gain of CHF 3.9 billion on the partial
IPO of Alcon, Inc. See note 2. Depreciation of property, plant and equipment 12 2'408 2'542
Impairment of property, plant and equipment 12 148 1'316
Amortisation of goodwill 15 1'571 1'438
Impairment of goodwill 15 — 839
Depreciation of intangible assets 16 255 189
Impairment of intangible assets 16 74 41
Increase/(decrease) in provisions and deferred taxes 312 343
Decrease/(increase) in working capital 27 (688) 787
(b) For 2002, mainly reversal of the Other movements (b) 45 (4'636)
gain on the partial IPO of Alcon, Inc.
and of the profit on the disposal of
FIS. The cash proceeds are included Operating cash flow (c) 10'125 10'248
in cash inflow on "Disposals".
8
Nestlé Consolidated accounts of the Nestlé Group
Financing activities
Dividend for the previous year (2'705) (2'484)
Purchase of treasury shares (318) (605)
Sale of treasury shares and options 660 395
Movements with minority interests (197) (195)
Bonds issued 2'305 3'926
Bonds repaid (693) (1'639)
Increase/(decrease) in other medium/
long term financial liabilities (134) (47)
Increase/(decrease) in short term financial liabilities (2'930) (3'805)
Decrease/(increase) in marketable securities
and other liquid assets (736) 1'309
Decrease/(increase) in short term investments 734 (1'251)
Other movements (a) — (364) (a) Tax payments related to
financing activities amounted
to CHF 406 million in 2002.
Cash flow from financing activities (4'014) (4'760)
9
Nestlé Consolidated accounts of the Nestlé Group
Equity as at 31st December 2001 5'926 2'588 12 27'517 36'043 404 (2'794) 33'653 (a)
Distributions to and
transactions with shareholders
Dividend for the previous year (2'484) (2'484) (2'484)
Movement of treasury shares (net) 242 (242) — (242) (242)
Result on options and treasury
shares held for trading purposes (427) (427) 458 31
Total distributions to and
transactions with shareholders 242 (3'153) (2'911) 216 (2'695)
Equity as at 31st December 2002 5'926 2'830 (4'070) 32'307 36'993 404 (2'578) 34'819
(a) In the event of a redemption of the Turbo Zero Equity-Link issue, part of the USD 123 million premium received in June 2001 on warrants
issued would be repaid, i.e. up to USD 103 million in 2003 and up to USD 47 million in 2006 (see note 20).
10
Nestlé Consolidated accounts of the Nestlé Group
Equity as at 31st December 2002 5'926 2'830 (4'070) 32'307 36'993 404 (2'578) 34'819
Distributions to and
transactions with shareholders
Dividend for the previous year (2'705) (2'705) (2'705)
Movement of treasury shares (net) (372) 372 — 372 372
Result on options and treasury
shares held for trading purposes 135 135 (165) (30)
Premium on warrants issued (b) (0) (0) (0)
Total distributions to and
transactions with shareholders (372) (2'198) (2'570) 207 (2'363)
Equity as at 31st December 2003 5'926 2'458 (5'630) 36'093 (c) 38'847 404 (2'371) 36'880
11
Nestlé Consolidated accounts of the Nestlé Group
Annex
Accounting policies Foreign currencies
In individual companies, transactions in foreign currencies are
Accounting convention and accounting standards
recorded at the rate of exchange at the date of the transaction.
The Consolidated accounts comply with International Financial Monetary assets and liabilities in foreign currencies are translated
Reporting Standards (IFRS) issued by the International at year-end rates. Any resulting exchange differences are taken
Accounting Standards Board (IASB) and with the Standing to the income statement.
Interpretations issued by the International Financial Reporting On consolidation, assets and liabilities of Group companies
Interpretations Committee (IFRIC) of the IASB. denominated in foreign currencies are translated into Swiss
The accounts have been prepared on an accrual basis and francs at year-end rates. Income and expense items are
under the historical cost convention, except that the following translated into Swiss francs at the annual average rates of
assets and liabilities are stated at their fair value: derivative exchange or at the rate on the date of the transaction for
financial instruments, investments held for trading, available-for- significant items.
sale investments and recognised assets and liabilities subject to Differences arising from the retranslation of opening net
fair value hedges. All significant consolidated companies have a assets of Group companies, together with differences arising
31st December accounting year-end. All disclosures required by from the restatement of the net results for the year of Group
the 4th and 7th European Union company law directives are companies, from average or actual rates to year-end rates, are
provided. taken to equity.
The balance sheet and net results of Group companies
operating in hyperinflationary economies are restated for the
Scope of consolidation changes in the general purchasing power of the local currency,
The Consolidated accounts comprise those of Nestlé S.A. and of using official indices at the balance sheet date, before translation
its affiliated companies, including joint ventures, and associates into Swiss francs at year-end rates.
(the Group). The list of the principal companies is provided in the
section "Companies of the Nestlé Group".
Segmental information
Segmental information is based on two segment formats: the
Consolidated companies primary format reflects the Group’s management structure,
Companies, in which the Group has a participation, usually a whereas the secondary format is product oriented.
majority, and where it exercises control, are fully consolidated. The primary segment format – by management responsibility
This applies irrespective of the percentage of the participation in and geographic area – represents the Group’s management
the share capital. Control refers to the power to govern the structure. The principal activity of the Group is the food business,
financial and operating policies of an affiliated company so as to which is managed through three geographic zones. Nestlé
obtain the benefits from its activities. Minority interests are Waters, managed on a worldwide basis, is disclosed separately.
shown as a separate category apart from equity and liabilities in The other activities encompass mainly pharmaceutical products
the balance sheet and the share of the profit attributable to as well as other food businesses, which are generally managed
minority interests is shown as a separate line in the income on a worldwide basis. The secondary segment format
statement. representing products is divided into six categories (segments).
Proportional consolidation is applied for companies over Segment results represent the contribution of the different
which the Group exercises joint control with partners. The segments to central overheads, research and development costs
individual assets, liabilities, income and expenditure are and the profit of the Group. Unallocated items comprise mainly
consolidated in proportion to the Nestlé participation in the equity corporate expenses as well as research and development costs.
(usually 50%). Specific corporate expenses as well as research and development
Newly acquired companies are consolidated from the costs are allocated to the corresponding segments.
effective date of acquisition, using the purchase method. Segment assets comprise property, plant and equipment,
trade and other receivables, inventories and prepayments and
accrued income. Unallocated items represent mainly corporate
Associates and research and development assets, including goodwill.
Liabilities comprise trade and other payables, accruals and
Companies where the Group has a significant influence but does
deferred income. Eliminations represent inter-company balances
not exercise management control are accounted for by the equity
between the different segments.
method. The net assets and results are recognised on the basis
Segment assets and liabilities by management responsibilities
of the associates’ own accounting policies, where it is impractical
and geographic area represent the situation at the end of the
to make adjustments with the Group's accounting policies.
year. Assets by product group represent the annual average as
this provides a better indication of the level of invested capital for
management purposes.
12
Nestlé Consolidated accounts of the Nestlé Group
Financial risk management and commodity The Group has several benchmarks and approval
requirements for borrowing and investing as well as for using
price risk management
derivatives. In general, affiliated companies may borrow in their
Financial risk management is an integral part of the way the respective local currencies up to six months forward while Group
Group is managed. The Board establishes the Group's financial management approval is required for longer terms and for any
policies and the Chief Executive Officer (CEO) establishes indebtedness in foreign currency as well as for interest and
objectives in line with these policies. An Asset and Liability foreign exchange derivatives on such positions. The affiliated
Management Committee, under the supervision of the Chief companies may also hedge their foreign currency exposures up
Financial Officer (CFO), is then responsible for setting financial to six months forward mainly through the Regional Treasury
strategies, which are executed by the Centre Treasury, the Centres but they must obtain approval of Group management for
Regional Treasury Centres and, in specific local circumstances, longer maturities. The affiliated companies must repatriate all
by the affiliated companies. Approved Treasury Management their excess liquidities to Group finance companies or require the
Guidelines define and classify risks as well as determine, by approval of the Group management for the rare cases where
category of transaction, specific approval, limit and monitoring they may have a justification to invest them locally. The Asset
procedures. In the course of its business, the Group is exposed and Liability Management Committee reviews and decides the
to financial market risks, credit risk, settlement risk and liquidity currency and interest rate framework of Nestlé's intragroup loans
risk. In accordance with the aforementioned policies, the Group portfolio on a monthly basis.
only enters into derivative transactions related to operating As regards to commodity price exposures, Group
and/or financial assets or liabilities or anticipated future management defines the hedging policy for affiliated companies.
transactions. The Group does not enter into trading derivative This policy is sufficiently flexible to allow management to rapidly
transactions without underlying assets or liabilities. adjust their hedges following possible changes in their raw
Financial market risks are essentially caused by exposures to material needs.
foreign currencies, interest rates and commodity prices. Foreign
currency transaction risk arises because affiliated companies
sometimes undertake transactions in foreign currencies such as Valuation methods and definitions
the import of raw materials, the export of finished goods and the
related borrowings. Translation exposure arises from the Sales to customers
consolidation of the Group accounts into Swiss francs. Interest Sales to customers represent the sales of products and services
rate risk comprises the interest price risk that results from rendered to third parties, net of general price reductions and
borrowing at fixed rates and the interest cash flow risk that sales taxes. Sales are recognised in the income statement at the
results from borrowing at variable rates. Commodity price risk moment the significant risks and rewards of ownership of the
arises from transactions on the world commodity markets for goods have been transferred to the buyer.
securing the supplies of green coffee, cocoa beans and other
commodities necessary for the manufacture of some of the
Group's products. These risks are mitigated by the use of Net financing cost
derivative financial instruments (see valuation methods and This item includes the interest expense on borrowings from third
definitions below). parties as well as the interest income earned on funds invested
Credit risk arises because a counterparty may fail to perform outside the Group. Exchange differences on financial assets and
its obligations. The Group is exposed to credit risks on financial liabilities and the results on interest hedging instruments that are
instruments such as liquid assets, derivative assets and its trade recognised in the income statement are also presented in net
receivable portfolios. Credit risk is managed by investing liquid financing cost.
assets and acquiring derivatives with high credit quality financial
institutions in accordance with the Group's Treasury Management
guidelines. The Group is not exposed to concentrations of credit Taxes
risk on its liquid assets as these are spread over several financial
institutions. Trade receivables are subject to credit limits, control This heading includes current taxes on profit and other taxes
and approval procedures in all the affiliated companies. Due to such as taxes on capital. Also included are actual or potential
its large geographic base and number of customers, the Group is withholding taxes on current and expected transfers of income
not exposed to material concentrations of credit risk on its trade from Group companies and tax adjustments relating to prior
receivables. years. Income tax is recognised in the income statement, except
Settlement risk results from the fact that the Group may not to the extent that it relates to items directly taken to equity, in
receive financial instruments from its counterparties at the which case it is recognised in equity.
expected time. This risk is managed by monitoring counterparty Deferred taxation is the tax attributable to the temporary
activity and settlement limits and managing presettlement differences that appear when taxation authorities recognise and
counterparty exposures. measure assets and liabilities with rules that differ from those of
Liquidity risk arises from the fact that a counterparty may not the consolidated accounts.
be able to unwind or offset a position because of inadequate Deferred taxes are calculated under the liability method at
market depth or disruption or refinancing problems. This risk is the rates of tax expected to prevail when the temporary
managed by limiting exposures in instruments that may be differences reverse. Any changes of the tax rates are recognised
affected by liquidity problems and through actively matching the in the income statement unless related to items directly
funding horizon of debt with incoming cash flows. As a result of recognised in equity. Deferred tax liabilities are recognised on all
its strong credit ratings, the Group does not expect any taxable temporary differences excluding non-deductible goodwill.
refinancing issues. Deferred tax assets are recognised on all deductible temporary
differences provided that it is probable that future taxable
income will be available.
13
Nestlé Consolidated accounts of the Nestlé Group
14
Nestlé Consolidated accounts of the Nestlé Group
15
Nestlé Consolidated accounts of the Nestlé Group
Impairment of assets Actuarial gains and losses arise mainly from changes in
Consideration is given at each balance sheet date to determine actuarial assumptions and differences between actuarial
whether there is any indication of impairment of the carrying assumptions and what has actually occurred. They are
amounts of the Group's assets. If any indication exists, an asset's recognised in the income statement, over the expected average
recoverable amount is estimated. An impairment loss is remaining working lives of the employees, only to the extent that
recognised whenever the carrying amount of an asset exceeds its their net cumulative amount exceeds 10% of the greater of the
recoverable amount. The recoverable amount is the greater of present value of the obligation or of the fair value of plan assets
the net selling price and value in use. In assessing value in use, at the end of the previous year. Unrecognised actuarial gains and
the estimated future cash flows are discounted to their present losses are reflected in the balance sheet.
value based on the average borrowing rate of the country where For defined benefit plans the actuarial cost charged to the
the assets are located, adjusted for risks specific to the asset. income statement consists of current service cost, interest cost,
expected return on plan assets and past service cost as well as
actuarial gains or losses to the extent that they are recognised.
Current and non-current liabilities The past service cost for the enhancement of pension benefits is
accounted for when such benefits vest or become a constructive
Interest-bearing current and non-current liabilities are stated at obligation.
amortised cost with any difference between the cost and Some benefits are also provided by defined contribution
redemption value being recognised in the income statement over plans; contributions to such plans are charged to the income
the period of the borrowings on an effective interest rate basis. statement as incurred.
Current liabilities include current or renewable liabilities due
within a maximum period of one year. Pensions and retirement benefits
The majority of Group employees are eligible for retirement
Provisions benefits under defined benefit schemes based on pensionable
remuneration and length of service, consisting mainly of final
These comprise liabilities of uncertain timing or amount that arise salary plans.
from restructuring, environmental, litigation and other risks.
Provisions are recognised when there exists a legal or Post retirement health care and other employee benefits
constructive obligation stemming from a past event and when
Group companies, principally in the USA and Canada, maintain
the future cash outflows can be reliably estimated. Obligations
health care benefit plans, which cover eligible retired employees.
arising from restructuring plans are recognised when detailed
The obligations for other employee benefits consist mainly of
formal plans have been established and when there is a valid
end of service indemnities, which do not have the character of
expectation that such plans will be carried out.
pensions.
Employee benefits
Equity compensation plans
Post-employment benefits
Members of the Group's Management
The liabilities of the Group arising from defined benefit
Members of the Group's Management are entitled to participate
obligations, and the related current service cost, are determined
each year in a share option plan without payment. The benefits
using the projected unit credit method. Valuations are carried out
consist of the right to buy Nestlé S.A. shares at a pre-determined
annually for the largest plans and on a regular basis for other
fixed price.
plans. Actuarial advice is provided both by external consultants
As from 1st January 1999, this plan has a rolling seven-year
and by actuaries employed by the Group. The actuarial
duration and the rights are vested after three years (previously
assumptions used to calculate the benefit obligations vary
five years and two years respectively).
according to the economic conditions of the country in which the
In order to hedge the related exposure, the Group buys - or
plan is located.
transfers from existing treasury shares portfolios - the number of
Such plans are either externally funded, with the assets of
shares necessary to satisfy all potential outstanding obligations
the schemes held separately from those of the Group in
under the plan when the benefit is awarded and holds them until
independently administered funds, or unfunded with the related
the maturity of the plan or the exercise of the rights. No
liabilities carried in the balance sheet.
additional shares are issued as a result of the equity
For the funded defined benefit plans, the deficit or excess of
compensation plan. When the options are exercised, equity is
the fair value of plan assets over the present value of the defined
increased by the amount of the proceeds received.
benefit obligation is recognised as a liability or an asset in the
The Group is not exposed to any additional cost and there is
balance sheet, taking into account any unrecognised actuarial
no dilution of the rights of the shareholders.
gains or losses and past service cost. However, an excess of
assets is recognised only to the extent that it represents a future
economic benefit which is actually available to the Group, for
example in the form of refunds from the plan or reductions in
future contributions to the plan. When such excess is not
available or does not represent a future economic benefit, it is
not recognised but is disclosed in the notes.
16
Nestlé Consolidated accounts of the Nestlé Group
Proportionally consolidated
Joint Venture:
Dairy Partners Americas, Latin America, transfer of some Milk
products businesses to a Joint Venture (50%) with Fonterra
(January)
17
Nestlé Consolidated accounts of the Nestlé Group
Notes
1. Segmental information
By management responsibility and geographic area
In millions of CHF 2003 2002 2003 2002
Sales EBITA
(a) Eismann, a frozen food Zone Europe (a) 28'574 28'068 3'561 3'442
distributor, has been Zone Americas 27'655 29'293 4'150 4'189
reclassified from Zone Europe
to Other activities because it is Zone Asia, Oceania and Africa 14'432 14'880 2'508 2'564
under a new management Nestlé Waters 8'066 7'720 782 696
following the December 2003
announcement that this Other activities (a) (b) 9'252 9'199 1'537 1'517
business, or at least a majority 87'979 89'160 12'538 12'408
stake, has been put up for sale.
2002 comparative figures have Unallocated items (c) (1'532) (1'468)
been restated. EBITA 11'006 10'940
(b) Mainly Pharmaceutical
products, Joint Ventures and The analysis of sales by geographic area is stated by customer location. Inter-segment sales are not significant.
"Trinks" (Germany).
18
Nestlé Consolidated accounts of the Nestlé Group
By product group
In millions of CHF 2003 2002 2003 2002
Sales EBITA
19
Nestlé Consolidated accounts of the Nestlé Group
Other expenses
Loss on disposal of property, plant and equipment (6) (9)
Loss on disposal of activities (71) (145)
Restructuring costs (603) (1'130)
Impairment of property, plant and equipment (148) (1'316)
Other (343) (694)
(1'171) (3'294)
Other income
Profit on disposal of property, plant and equipment 54 44
Profit on disposal of activities 277 4'690
Other 306 246
637 4'980
Other expenses
Restructuring costs and impairments result mainly from the Group's industrial reorganisation. Restructuring
costs in 2003 arise mainly from the optimisation of industrial manufacturing capacities relating to milk products
and water businesses in Europe.
Other income
2002 included the gain on the partial IPO of Alcon, Inc. and the profit on the disposal of FIS.
Interest income includes CHF 88 million (2002: CHF 44 million) of gains arising on marketable security portfolios
classified as trading, and CHF 112 million (2002: CHF 89 million) of gains arising on derivatives acquired within
the Group's risk management policies but for which hedge accounting is not applied.
4. Expenses by nature
The following items are allocated to the appropriate headings of expenses by function in the income statement:
20
Nestlé Consolidated accounts of the Nestlé Group
5. Taxes
In millions of CHF 2003 2002
21
Nestlé Consolidated accounts of the Nestlé Group
8. Liquid assets
In millions of CHF 2003 2002
Marketable securities include mainly money market and fixed income instruments.
2003 2002
Liquid assets have maturities of less than one year or can be converted into cash at short notice.
22
Nestlé Consolidated accounts of the Nestlé Group
10. Inventories
In millions of CHF 2003 2002
Inventories amounting to CHF 88 million (2002: CHF 148 million) are pledged as security for financial liabilities.
Trading
Currency derivatives 3 443 34 1'064
Interest derivatives 42 2'416 32 837
Commodity derivatives 11 62 9 139
Some derivatives, while complying with the Group's financial risk management policies of managing the risks of
the volatility of the financial markets, do not qualify for applying hedge accounting treatments and are therefore
classified as trading.
23
Nestlé Consolidated accounts of the Nestlé Group
Derivative assets related to foreign exchange risks are denominated in the following currencies:
Other derivative assets, mainly related to interest rate and/or commodity price risks, are denominated in the
following currencies:
EUR 175 70
JPY 169 128
USD 49 160
GBP 1 82
Other 90 64
484 504
Derivative assets related to cash flow hedges have the following maturities:
24
Nestlé Consolidated accounts of the Nestlé Group
Gross value
At 1st January 11'534 22'320 6'177 766 40'797 45'093
Accumulated depreciation
At 1st January (4'520) (14'462) (4'333) (457) (23'772) (25'195)
At 31st December 2003, property, plant and equipment include CHF 409 million (2002: CHF 452 million) of
assets under construction. Net property, plant and equipment held under finance leases at 31st December 2003
amount to CHF 276 million (2002: CHF 305 million). Net property, plant and equipment of CHF 112 million
(2002: CHF 85 million) are pledged as security for financial liabilities.
The fire risks, reasonably estimated, are insured in accordance with domestic requirements.
25
Nestlé Consolidated accounts of the Nestlé Group
15. Goodwill
In millions of CHF 2003 2002
Gross value
At 1st January 30'053 27'633
Accumulated amortisation
At 1st January (4'335) (2'380)
26
Nestlé Consolidated accounts of the Nestlé Group
Gross value
At 1st January 400 548 1'100 2'048 1'555
Accumulated depreciation
At 1st January (116) (299) (391) (806) (657)
27
Nestlé Consolidated accounts of the Nestlé Group
2003 2002
The fair values of current financial liabilities are not materially different from their carrying amounts.
28
Nestlé Consolidated accounts of the Nestlé Group
Trading
Currency derivatives 47 1'990 25 933
Interest derivatives 27 2'660 17 1'698
Commodity derivatives 17 306 8 157
Some derivatives, while complying with the Group's financial risk management policies of managing the risks of
the volatility of the financial markets, do not qualify for applying hedge accounting treatments and are therefore
classified as trading.
29
Nestlé Consolidated accounts of the Nestlé Group
Derivative liabilities related to foreign exchange risks are denominated in the following currencies:
Other derivative liabilities, mainly related to interest rate and/or commodity price risks, are denominated in the
following currencies:
EUR 312 81
USD 225 143
GBP 65 16
Other 75 36
677 276
Derivative liabilities related to cash flow hedges have the following maturities:
30
Nestlé Consolidated accounts of the Nestlé Group
2003 2002
Loans in other currencies are individually not significant. The effective interest rates of bonds are disclosed
below. The effective interest rates of other non-current financial liabilities are not materially different from their
nominal interest rates.
The fair value of non-current financial liabilities amounts to CHF 14 427 million (2002: CHF 10 741 million).
These figures are those from the original financial liabilities, without impact from hedges that are disclosed in
the appropriate notes.
31
Nestlé Consolidated accounts of the Nestlé Group
Bond issues subject to interest rate fair value hedges are carried at fair value, while those that are not subject
to such hedges are carried at cost.
32
Nestlé Consolidated accounts of the Nestlé Group
USD 699 0.00% 6.15% 2001-2008 Turbo Zero Equity-Link issue with
warrants on Nestlé S.A. shares.
The debt component (issue of the notes)
was recognised under bonds for USD 451
million at inception, while the equity
component (premium on warrants issued)
was recognised under equity for USD 123
million.
The investors have the option to put
the notes to Nestlé Holdings, Inc. and
the warrants to Nestlé S.A. at their
accreted value in June 2003 and in
June 2006.
Exercise conditions of the
warrants: 70'000 warrants to
purchase Nestlé S.A. shares.
Each warrant gives the right
to purchase 31.9065 shares.
The holders of warrants may exercise
their warrants to purchase shares of
Nestlé S.A. either:
1) during the note exercise period
running from July 2001 to June 2008
by tendering a note and a warrant in
exchange for shares on the basis that
one note is required to exercise each
warrant; or
2) on the cash exercise date (11 June
2008), by tendering warrants
together with the exercise price
in cash.
The effective initial exercise price per
share is USD 261.119 (or CHF 455,
based on a fixed exchange rate of
CHF 1.7425 for each USD), growing
by 2.625% per annum, prior to any
anti-dilution adjustment.
In June 2003, 100 units (at
USD 10,000 each) of this issue were
put for cash by a holder on the put
date at the prescribed price as per
the terms and conditions of the issue. 662 699
USD 950 3.50% 3.76% 2001-2005 The initial USD 650 million bond issue in
2001 was increased by USD 300 million
in 2002. 1'170 1'307
USD 300 5.13% 5.19% 2001-2007 371 415
USD 500 4.75% 4.98% 2002-2007 616 689
USD 400 4.50% 4.64% 2002-2006 Partially subject to an interest rate swap
that creates a liability at
floating rates. 501 563
NOK 2000 5.25% 4.70% 2003-2007 Subject to an interest rate and
currency swap that creates a USD
liability at floating rates. 393 —
33
Nestlé Consolidated accounts of the Nestlé Group
USD 250 3.00% 3.00% 2003-2009 Step-up fixed rate callable medium
term note. Currently a related swap
synthetically creates a liability at
floating rates.
However the note issuer sold an
option to the swap counterparty
giving it the right to terminate the
swap early, annually starting on
31 March 2005.
Further, the note's coupon rate
increases on March 31, as follows:
2003: 3%, 2005: 3.25%, 2007:
3.75%, 2008: 4%.
The current swap takes into
consideration this rate step-up, and,
if not terminated by the swap issuer
prior to its maturity in 2009, would
continuously synthetically create a
liability at floating rates. 309 —
Bond Issues of Nestlé Purina Petcare Company, USA (Face values are shown after partial repayments)
USD 83 9.25% 9.50% 1989-2009 120 137
USD 48 7.75% 7.84% 1995-2015 66 75
USD 63 9.30% 9.42% 1991-2021 102 115
USD 79 8.63% 8.72% 1992-2022 121 136
USD 44 8.13% 8.27% 1993-2023 65 73
USD 51 7.88% 8.05% 1995-2025 74 83
34
Nestlé Consolidated accounts of the Nestlé Group
EUR 175 2.56% 2.56% 2003-2006 Uridashi issue sold to retail investors
in Japan. Subject to an interest rate
swap that creates a liability at
floating rates. 272 —
EUR 500 3.50% 3.55% 2003-2008 Subject to an interest rate swap that
creates a liability at floating rates. 786 —
EUR 100 2.50% 3.23% 2003-2007 Subject to an interest rate swap that
creates a liability at floating rates. 154 —
USD 100 2.25% 3.04% 2003-2007 Subject to an interest rate and
currency swap that creates a EUR
liability at floating rates. 119 —
35
Nestlé Consolidated accounts of the Nestlé Group
Bonds subject to fair value hedges are carried at fair value for CHF 5874 million (2002: CHF 5288 million) and
the related derivatives are shown under derivative assets for CHF 374 million (2002: CHF 296 million) and
under derivative liabilities for CHF 394 million (2002: CHF 87 million).
The plan assets include property occupied by affiliated companies with a fair value of CHF 14 million (2002:
CHF 16 million).
The decrease of the excess of liabilities is mainly due to the effective return on assets, as well as to the
reorganisation of the US pension plan structure resulting in the conversion of certain funded plans into unfunded
plans.
36
Nestlé Consolidated accounts of the Nestlé Group
The expenses for defined benefit and defined contribution plans are allocated to the appropriate headings of
expenses by function.
Transfer to unrecognised assets represents excess of return of overfunded defined benefit plans that cannot be
recognised as assets as well as contributions paid to such plans in excess of their annual cost.
37
Nestlé Consolidated accounts of the Nestlé Group
Discount rates
Europe 3.5 - 5.5 % 3.5 - 5.6 %
Americas 6 - 8.2 % 6.8 - 8.7 %
Asia, Oceania and Africa 2 - 8.5 % 2 - 11 %
The methodology to disclose actuarial assumptions has been enhanced to include major pension plans only in
order to obtain a more meaningful range. 2002 comparative figures have been restated.
Movement of options
In millions of CHF 2003 2002
Number Value of Number Value of
of options shares of options shares
of which vested
at 31st December 665'302 748'315
additional options vesting
on 1st March 2004 1'306'743 —
The rights are exercised throughout the year in accordance with the rules of the plan.
38
Nestlé Consolidated accounts of the Nestlé Group
The exercise price corresponds to the average price of the last 10 trading days preceding the grant date.
Total 28 28
Board of Directors
Members of the Board of Directors receive an annual remuneration of CHF 262'500 each, members of the
Committee of the Board receive an additional CHF 200'000 each. Members of the Audit Committee receive an
additional CHF 25'000 each. Members of the Board of Directors also receive an annual expense allowance of
CHF 15'000 each. The Chairman of the Board is entitled to a salary, a bonus and share options.
50% of the remuneration of the members of the Board of Directors and the total additional remuneration of
the members of the Committee of the Board are paid through the granting of Nestlé S.A. shares at the ex-
dividend closing price at the day of payment of the dividend. These shares are subject to a 2-year blocking
period.
Executive Board
The total annual remuneration of the members of the Executive Board comprises a salary, a bonus (based on
the individual's performance and the achievement of the Group's objectives) and share options.
50% of the bonus of the members of the Executive Board is paid through the granting of Nestlé S.A. shares
at the average price of the last 10 trading days of January of the year of allocation. These shares are subject
to a 3-year blocking period.
39
Nestlé Consolidated accounts of the Nestlé Group
24. Provisions
In millions of CHF 2003 2002
Restructuring provisions arise from a number of projects across the Group. These include plans to optimise
industrial manufacturing capacities such as the project Target 2004+ on industrial efficiency, of certain ice
cream and water operations, and plans to restructure distribution, logistics and sales force operations mainly in
Europe and North America. The project FitNes aimed at reducing administrative costs also results in
administrative restructuring programmes mainly in Europe and in the Americas. Restructuring provisions are
expected to result in future cash outflows when implementing the plans usually over the following two years
and are consequently not discounted. Reversal of restructuring provisions stem mainly from the fact that
voluntary restructuring programmes implemented in Europe in 2002 have attracted less participants than
expected.
Litigation provisions have been set up to cover legal and administrative proceedings that arise in the ordinary
course of business. Reversal of such provisions refer to the cases resolved in favour of the Group. The timing of
cash outflows of litigation provisions is uncertain as it depends upon the outcome of the proceedings. These
provisions are therefore not discounted because their present value would not represent meaningful
information.
40
Nestlé Consolidated accounts of the Nestlé Group
Number of registered shares of nominal value CHF 1.- each 403'520'000 403'520'000
In millions of CHF 404 404
Additional information is given in the annex to the annual accounts of Nestlé S.A., note 19.
The share capital includes the nominal value of treasury shares (see note 26).
The movement of these shares is described in the annex to the annual accounts of Nestlé S.A., note 21.
Inventories (234) 28
Trade receivables (351) (21)
Trade payables 49 41
Other payables (122) 151
Net accruals and deferrals (23) 1
Other (7) 587
(688) 787
41
Nestlé Consolidated accounts of the Nestlé Group
28. Acquisitions
In millions of CHF 2003 2002
29. Disposals
In millions of CHF 2003 2002
42
Nestlé Consolidated accounts of the Nestlé Group
30. Dividends
Dividends payable are not accounted for until they have been ratified at the Annual General Meeting. At the
meeting on 22nd April 2004, the following dividend in respect of 2003 will be proposed:
31. Guarantees
In the normal course of business, the Group has granted guarantees to third parties, totalling CHF 331 million
(2002: CHF 341 million) on 31st December 2003.
Operating leases
Finance leases
The difference between the future value of the minimum lease payments and their present value represents the
discount on the lease obligations.
43
Nestlé Consolidated accounts of the Nestlé Group
L'Oréal
On 3rd February 2004 Nestlé and the Bettencourt family who own respectively 49% and 51% of Gesparal
Holding Company, which in turn owns 53.8% of L'Oréal, reached an agreement proposing a merger of Gesparal
into L'Oréal. This merger will be proposed at the next annual shareholders' meeting of L'Oréal on 29th April
2004. After the merger, Nestlé will own 26.4% of L'Oréal. They have also agreed not to modify their respective
shareholdings for an agreed period and to grant mutual pre-emption rights on their respective shareholdings for
a ten-year period.
44
Nestlé Consolidated accounts of the Nestlé Group
As Group auditors we have audited the Consolidated accounts (balance sheet, income statement, cash flow
statement, statement of changes in equity and annex) of the Nestlé Group for the year ended 31st December
2003.
These Consolidated accounts are the responsibility of the Board of Directors. Our responsibility is to express an
opinion on these Consolidated accounts based on our audit. We confirm that we meet the legal requirements
concerning professional qualification and independence.
Our audit was conducted in accordance with auditing standards promulgated by the Swiss profession, and with
International Standards on Auditing (ISA), which require that an audit be planned and performed to obtain
reasonable assurance about whether the Consolidated accounts are free from material misstatement. We have
examined on a test basis evidence supporting the amounts and disclosures in the Consolidated accounts. We
have also assessed the accounting principles used, significant estimates made and the overall Consolidated
accounts presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the Consolidated accounts give a true and fair view of the financial position, the net profit and
cash flows in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.
We recommend that the Consolidated accounts submitted to you be approved.
45
Nestlé Consolidated accounts of the Nestlé Group
In millions of CHF (except for per share data and personnel) 2003 2002 2001
Results
Consolidated sales 87 979 89 160 84 698
EBITA 11 006 10 940 9 987
as % of sales 12.5% 12.3% 11.8%
Taxes 2 307 2 295 2 429
Consolidated net profit 6 213 7 564 6 681
as % of sales 7.1% 8.5% 7.9%
as % of average equity 17.3% 22.1% 21.0%
Total amount of dividend 2 858 (a) 2 705 2 484
Depreciation of property, plant and equipment 2 408 2 542 2 581
as % of sales 2.7% 2.9% 3.0%
Amortisation of goodwill 1 571 1 438 494
Balance sheet
Current assets 36 233 35 342 39 045
of which liquid assets 15 128 14 291 16 042
Non-current assets 53 328 52 010 54 741
Total assets 89 561 87 352 93 786
Current liabilities 30 365 33 737 41 492
Non-current liabilities and minority interests 22 316 18 796 18 641
Equity 36 880 34 819 33 653
Capital expenditure 3 337 3 577 3 611
as % of sales 3.8% 4.0% 4.3%
(a) As proposed by the Board of Directors (b) Figures prior to 2001 adjusted in (d) As proposed by the Board of
of Nestlé S.A.. This amount includes order to make comparable the data per Directors of Nestlé S.A..
dividends payable in respect of shares share. (e) Excludes Ralston Purina.
with right to dividend at the balance (c) Calculated on the basis of the (f) Figures prior to 2001 have not been
sheet date (CHF 2793 million) as well as dividend for the year concerned but restated following the first application of
those potentially payable on the shares which is paid out in the following year. IAS 39 "Financial Instruments".
covering options and shares held for
trading purposes (CHF 65 million).
46
Nestlé Consolidated accounts of the Nestlé Group
81 422 74 660
9 911 8 700
12.2% 11.7%
2 761 2 314
5 763 4 724
7.1% 6.3%
21.2% 20.0%
2 127 1 657
2 737 2 597
3.4% 3.5%
414 384
30 747 27 169
10 131 6 670
34 777 31 770
65 524 58 939
23 174 22 182
12 446 12 304
29 904 24 453
3 305 2 806
4.1% 3.8%
225 231
47
Nestlé Consolidated accounts of the Nestlé Group
Operating companies
(a)
Principal affiliated companies which operate in the food and water sectors, with the exception of
(*)
those marked with an asterisk which are engaged in the pharmaceutical sector.
(a)
In the context of the SWX Swiss Exchange Directive on Information relating to Corporate Governance, the disclosure criteria are
as follows:
- Operating companies are disclosed if their sales exceed CHF 10 mio or equivalent;
- Financial companies are disclosed if either their equity exceed CHF 10 mio or equivalent and/or the total balance sheet is higher
than CHF 50 mio or equivalent.
Countries within the continents are listed according to the alphabetical order of the French names.
% capital shareholding corresponds to voting powers unless stated otherwise.
1. Affiliated companies for which full consolidation treatment is applied (see "Scope of consolidation").
% capital
Companies City sharholdings Currency Capital
Europe
Germany
Nestlé Deutschland AG Frankfurt am Main 100% EUR 214'266'628.49
Blaue Quellen Mineral- und Heilbrunnen AG Rhens am Rhein 100% EUR 10'565'335.43
Trinks GmbH Goslar 96.99% EUR 2'351'942.65
San Pellegrino Deutschland GmbH Mainz 100% EUR 715'808.63
Nespresso Deutschland GmbH Düsseldorf 100% EUR 51'000.00
PowerBar Europe GmbH München 100% EUR 25'000.00
Alcon Pharma GmbH* Freiburg/Breisgau 74.63% EUR 511'291.90
Geti Wilba Wild- und Geflügelverarbeitung
GmbH & Co. KG Bremervörde 100% EUR 6'135'502.57
Heimfrost Schumacher GmbH & Co. KG Delmenhorst 100% EUR 1'534'000.00
Nähr-Engel GmbH Frankfurt am Main 100% EUR 6'391'148.51
Erlenbacher Backwaren GmbH Gross-Gerau 100% EUR 2'582'024.00
Eismann Tiefkühl-Heimservice GmbH & Co. KG Mettmann 100% EUR 1'000'000.00
Family Frost International Tiefkühlheimdienst
GmbH Mettmann 100% EUR 4'116'000.00
Nestlé Schöller GmbH & Co. KG Nürnberg 100% EUR 60'000'000.00
Nestlé Schöller Produktions-GmbH Nürnberg 100% EUR 30'000.00
Gut Adlersreuth Wildspezialitäten GmbH
& Co. KG Oberreute 100% EUR 511'291.88
Distributa Gesellschaft für Lebensmittel-
Logistik mbH Wildau 70% EUR 511'291.88
Family Frost Tiefkühlheimdienst GmbH Wildau 100% EUR 2'056'000.00
Austria
Nestlé Österreich GmbH Wien 100% EUR 7'270'000.00
Nespresso Österreich GmbH & Co OHG Wien 100% EUR 35'000.00
Alcon Ophthalmika GmbH* Wien 74.63% EUR 36'336.42
Schöller Lebensmittel GmbH Wien 100% EUR 7'231'000.00
Eismann Tiefkühl-Service GmbH Mattersburg 100% EUR 365'000.00
48
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Belgium
Nestlé Belgilux S.A. Bruxelles 100% EUR 8'924'200.00
Nestlé Waters Benelux S.A. Etalle 100% EUR 19'914'000.00
S.A. Nespresso Belgilux N.V. Bruxelles 100% EUR 550'000.00
S.A. Alcon-Couvreur N.V.* Puurs 74.63% EUR 4'491'830.00
Nestlé Purina PetCare Belgilux N.V. Bruxelles 100% EUR 2'974'722.00
Nestlé Catering Services S.A. Bruxelles 100% EUR 10'535'500.00
N.V. Schöller S.A. Beerse 100% EUR 521'000.00
Eismann N.V. Geel 100% EUR 5'453'657.55
Bulgaria
Nestlé Sofia A.D. Sofia 99.98% BGN 8'785'000.00
Denmark
Nestlé Danmark A/S Copenhagen 100% DKK 41'000'000.00
Alcon Danmark A/S* Rodovre 74.63% DKK 500'000.00
Food Specialities A/S Esbjerg 100% DKK 13'095'000.00
Spain
Esplugues de Llobregat
Nestlé España S.A. (Barcelona) 100% EUR 100'000'000.00
Productos del Café S.A. Reus 100% EUR 6'611'000.00
Davigel España S.A. Palma de Mallorca 100% EUR 984'000.00
La Cocinera Alimentación S.A. Barcelona 100% EUR 150'000.00
Aquarel Iberica S.A. Barcelona 100% EUR 300'506.05
Nestlé Waters España S.A. Barcelona 100% EUR 8'400'000.00
Alcon Cusi S.A.* El Masnou (Barcelona) 74.63% EUR 11'599'783.00
Helados Miko S.A. Vitoria 100% EUR 140'563'200.00
Compañía Avidesa S.A. Alzira 100% EUR 48'000'000.00
Nestlé PetCare España S.A. Castellbisbal (Barcelona) 100% EUR 12'000'000.00
Eismann S.A. Barcelona 100% EUR 60'000.00
Family Frost S.L. Sevilla 100% EUR 420'708.47
Finland
Suomen Nestlé Oy Helsinki 100% EUR 3'363'758.53
Nestlé Purina PetCare Finland Oy Vantaa 100% EUR 84'093.96
Kotijätelö Oy Helsinki 100% EUR 500'000.00
France
Nestlé France SAS Noisiel 100% EUR 129'130'560.00
Nestlé Grand Froid S.A. Noisiel 100% EUR 42'412'000.00
Nestlé Clinical Nutrition France Noisiel 100% EUR 57'943'072.00
Nestlé Produits Laitiers Frais S.A. Noisiel 99.97% EUR 3'196'200.00
Herta S.A. Noisiel 100% EUR 12'908'610.00
Davigel S.A. Dieppe 100% EUR 7'681'250.00
Nestlé Waters France Paris 100% EUR 42'824'105.00
S.A. des Eaux Minérales de Ribeauvillé Ribeauvillé 100% EUR 846'595.13
Aquarel France Issy-les-Moulineaux 100% EUR 308'709.26
49
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Greece
Nestlé Hellas S.A. Maroussi 100% EUR 18'437'936.00
Alcon Laboratories Hellas Commercial and
Industrial S.A.* Maroussi 74.63% EUR 382'166.35
Hungary
Nestlé Hungária Kft. Budapest 100% HUF 6'000'000'000.00
Kékkúti Ásvànyvíz Rt. Budapest 100% HUF 238'326'000.00
Alcon Hungary Pharmaceuticals Trading LLC* Budapest 74.63% HUF 75'000'000.00
Nestlé-Schöller Kft. Budapest 100% HUF 3'762'470'000.00
Family Frost Kft. Budaörs 100% HUF 220'114'625.00
Italy
Nestlé ltaliana S.p.A. Milano 100% EUR 25'582'492.00
San Pellegrino S.p.A. Milano 100% EUR 58'742'145.00
Alcon Italia S.p.A.* Milano 74.63% EUR 1'300'000.00
Nestlé Purina PetCare Italia S.p.A. Milano 100% EUR 10'000'000.00
Nespresso Italy S.p.A. Milano 100% EUR 250'000.00
Eismann srl Sona 100% EUR 2'194'900.00
Kazakhstan
Kosmis LLC Kostanay 100% RUB 57'639'000.00
Lithuania
UAB "Nestlé Baltics" Vilnius 100% LTL 110'000.00
Norway
A/S Nestlé Norge Sandvika 100% NOK 81'250'000.00
Alcon Norge AS* Sandvika 74.63% NOK 100'000.00
Hjem-IS A/S Oslo 100% NOK 2'250'000.00
50
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Netherlands
Nestlé Nederland B.V. Amsterdam 100% EUR 68'067'032.41
Alcon Nederland B.V.* Gorinchem 74.63% EUR 18'151.21
Nestlé Purina PetCare Nederland B.V. Amsterdam 100% EUR 18'152.00
Nespresso Nederland B.V. Amsterdam 100% EUR 681'000.00
Eismann B.V. Duiven 100% EUR 3'312'595.58
Maître Paul B.V. Tilburg 100% EUR 4'991'582.38
Aqua System B.V. The Hague 100% EUR 18'152.20
Poland
Nestlé Polska S.A. Warszawa 100% PLN 301'314'000.00
ESI Polska Sp. z o.o. Warszawa 100% PLN 4'000.00
Alcon Polska Sp. z o.o.* Warszawa 74.63% PLN 750'000.00
Schöller Artykuly Sp. z o.o. Warszawa 100% PLN 34'995'500.00
Family Frost Polen Sp. z o.o. Tychy 100% PLN 8'205'934.30
Portugal
Nestlé Portugal S.A. Linda-a-Velha 100% EUR 30'000'000.00
Longa Vida-Indústrias Lácteas S.A. Matosinhos 100% EUR 16'250'000.00
Sociedade das Aguas de Pisões-Moura S.A. Lisboa 100% EUR 3'500'000.00
Alcon Portugal-Produtos e Equipamentos
Oftalmologicos, Ltda.* Paço d’Arcos 74.63% EUR 4'500'000.00
Family Frost - Gelados e Congelados Ltda. Lisboa 100% EUR 254'000.00
Republic of Ireland
Nestlé (lreland) Ltd Tallaght-Dublin 100% EUR 3'530'600.00
Nestlé Purina PetCare (lreland) Ltd Dublin 100% EUR 2.54
Czech Republic
Nestlé Cesko s.r.o. Praha 100% CZK 1'354'000'000.00
Schöller Zmrzlina a Mrazene Vyrobky spol.
s.r.o. Praha 100% CZK 35'229'000.00
Family Frost spol. s.r.o. Praha 100% CZK 16'991'995.96
Romania
Nestlé Romania SRL Bucharest 100% ROL 68'704'000'000.00
United Kingdom
Nestlé UK Ltd Croydon 100% GBP 120'374'341.50
Nestlé Waters UK Ltd Rickmansworth 100% GBP 14'000'000.00
Buxton Mineral Water Company Ltd Rickmansworth 100% GBP 14'000'000.00
Nestlé Watercoolers UK Ltd Rickmansworth 100% GBP 3'000'000.00
Alcon Laboratories (UK) Ltd* Herts 74.63% GBP 3'100'000.00
Nestlé Purina PetCare (UK) Ltd New Malden 100% GBP 244'000'000.00
Schöller Ice-Cream Ltd Surrey 100% GBP 1'584'626.00
Nestlé Waters Powwow Ltd Croydon 100% GBP 640'000.00
51
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Russia
JSC Confectionery Union Rossiya Samara 100% RUB 90'244'000.00
Nestlé Zhukovsky Ice Cream LLC Zhukovsky 100% RUB 364'884'000.00
Nestlé Food LLC Moscow 100% RUB 1'655'572'000.00
OJSC "Kamskaya" Perm 87.35% RUB 88'997'000.00
OOO Poseidon Trading Moscow 100% RUB 9'000.00
OOO Clean Springs Moscow 100% RUB 113'400.00
OOO "Best Water" Moscow 100% RUB 9'000.00
JSC "Khladoprodukt" Timashevsk 94.89% RUB 175'858'000.00
JSC Confectionery Firm "Altai" Barnaul 95.70% RUB 113'281'000.00
OAO Zhukovsky Khladokombinat Zhukovsky 89.41% RUB 30'981'000.00
OJSC Vologda Baby Food Factory Vologda 100% RUB 17'499'000.00
Schöller Eiscrem GmbH Moscow 100% RUB 788'000.00
OOO Clear Water Service Moscow 100% RUB 0.00
Slovakia
Nestlé Slovensko s.r.o. Prievidza 100% SKK 400'000'000.00
Schöller Potraviny, spol. s.r.o. Bratislava 100% SKK 200'000.00
Sweden
Nestlé Sverige AB Helsingborg 100% SEK 20'000'000.00
Zoégas Kaffee AB Helsingborg 100% SEK 20'000'000.00
Jede AB Mariestad 100% SEK 7'000'000.00
Alcon Sverige AB* Bromma 74.63% SEK 100'000.00
Nestlé Purina PetCare Sverige AB Malmö 100% SEK 1'000'000.00
Hemglass AB Strängnäs 100% SEK 14'000'000.00
Switzerland
Société des Produits Nestlé S.A. Vevey 100% CHF 54'750'000.00
Nestlé Suisse S.A. Vevey 100% CHF 250'000.00
Nestlé Waters (Suisse) S.A. Gland 100% CHF 1'200'000.00
Alcon Pharmaceuticals Ltd* Hünenberg 74.63% CHF 100'000.00
Nestrade - Nestlé World Trade Corporation La Tour-de-Peilz 100% CHF 6'500'000.00
Nestlé Nespresso S.A. Paudex 100% CHF 2'000'000.00
Nestlé International Travel Retail S.A. Châtel-St-Denis 100% CHF 3'514'000.00
Eismann-Tiefkühlservice AG Dällikon 100% CHF 1'499'595.20
Turkey
Nestlé Turkiye Gida Sanayi A.S. Istanbul 100% TRL 123'374'185'000'000.00
Alcon Laboratuvarlari Tic. A.S.* Istanbul 74.63% TRL 17'724'114'600'000.00
Sansu Gida Ve Mesrubat Sanayi Ticaret A.S. Gaziantep 95% TRL 8'000'000'000'000.00
Ukraine
JSC Lviv Confectionery Firm "Svitoch" Lviv 96.46% UAK 84'990'000.00
LLC Nestlé Ukraine Kiev 100% UAK 792'000.00
OJSC Volynholding Torchyn 100% UAK 100'000.00
52
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Africa
South Africa
Nestlé (South Africa) (Pty) Ltd Randburg 100% ZAR 51'200'000.00
Nestlé Purina PetCare Randburg 100% ZAR 1'000.00
Alcon Laboratories (South Africa) Pty Ltd* Randburg 74.63% ZAR 201'820.00
Cameroon
Nestlé Cameroun Douala 99.80% XAF 1'300'000'000.00
Côte d’Ivoire
° Nestlé Côte d’Ivoire Abidjan 86.50% XOF 5'517'600'000.00
Listed on the Abdjan Stock Exchange, market
capitalisation FCFA 80'005'200'000, quotation
code (ISIN) CI0009240728
Egypt
Nestlé Egypt S.A.E. Cairo 100% EGP 73'000'000.00
Dolce Company for Food Industries S.A.E. Cairo 100% EGP 73'254'000.00
Société des eaux minérales Vittor S.A.E. Cairo 99.16% EGP 36'500'000.00
Gabon
Nestlé Gabon Libreville 90% XAF 344'000'000.00
Ghana
Nestlé Ghana Ltd Tema-Accra 51% GHC 1'000'000'000.00
Guinea
Nestlé Guinée S.A. Conakry 99% GNF 3'424'000'000.00
Kenya
Nestlé Foods Kenya Ltd Nairobi 100% KES 37'145'000.00
Mauritius
Nestlé’s Products (Mauritius) Ltd Port Louis 100% BSD 71'500.00
Nestlé South East Africa Trading Ltd Port Louis 100% USD 100.00
Morocco
Nestlé Maroc S.A. El Jadida 94.50% MAD 156'933'000.00
Mozambique
Alimoc-Alimentos de Mocambique Limitada Maputo 100% MZM 4'000'000.00
Nigeria
° Nestlé Nigeria PLC Ilupeju-Lagos 62.32% NGN 264'093'750.00
Listed on the Lagos stock exchange, market
capitalisation NGN 66'054'687'500, quotation code
(ISIN) NG00000NSTL3
53
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Senegal
Nestlé Sénégal Dakar 100% XOF 1'620'000'000.00
Tunisia
Nestlé Tunisie Tunis 59.20% TND 8'438'280.00
Zimbabwe
Nestlé Zimbabwe (Pvt) Ltd Harare 100% ZWD 7'000'000.00
Americas
Argentina
Nestlé Argentina S.A. Buenos Aires 100% ARS 572'000.00
Eco de Los Andes S.A. Buenos Aires 50.87% ARS 33'949'000.00
Alcon Laboratorios Argentina S.A.* Buenos Aires 74.63% ARS 7'176'282.00
Bolivia
Nestlé Bolivia S.r.l. La Paz 100% BOB 190'000.00
Brazil
Nestlé Brasil Ltda. São Paulo 100% BRL 470'601'498.00
Industrias Alimenticias Itacolomy S/A Montes Claros 100% BRL 231'596'888.00
Companhia Produtora de Alimentos Itabuna 100% BRL 150'371'857.00
Nestlé Waters do Brasil - Bebidas e
Alimentos Ltda. Rio de Janeiro 100% BRL 87'248'341.00
Alcon Laboratorios do Brasil Ltda.* São Paulo 74.63% BRL 7'729'167.00
Chocolates Garoto S.A. Vila Velha-ES 100% BRL 160'620'000.00
Ralston Purina do Brasil Ltda. São Paulo 100% BRL 79'530'000.00
Canada
Nestlé Canada, Inc. North York (Ontario) 100% CAD 45'530'000.00
Midwest Food Products, Inc. North York (Ontario) 50% CAD 50'000.00
Alcon Canada, Inc.* Mississauga (Ontario) 74.63% CAD 3'471'735.00
Chile
Nestlé Chile S.A. Santiago de Chile 99.50% CLP 11'832'926'051.00
Alcon Laboratorios Chile Ltda.* Santiago de Chile 74.63% CLP 9'750'000.00
Colombia
Nestlé de Colombia S.A. Bogotá 100% COP 1'291'305'400.00
Laboratorios Alcon de Colombia S.A.* Bogotá 74.63% COP 20'872'000.00
Nestlé Purina PetCare de Colombia S.A. Bogotá 100% COP 17'030'000.00
Costa Rica
Compañía Nestlé Costa Rica S.A. Barreal de Heredia 100% CRC 1'694'000'000.00
54
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Cuba
Los Portales S.A. Guane 50.02% USD 24'110'000.00
El Salvador
Nestlé El Salvador S.A. San Salvador 100% SVC 39'000'000.00
Lacteos Finos de Salvador S.A. San Salvador 100% SVC 22'573'000.00
Ecuador
Nestlé Ecuador S.A. Quito 100% USD 188'497.00
Industrial Surindu S.A. Quito 100% USD 3'900'994.00
Ecuajugos S.A. Quito 100% USD 122'000.00
United States
Nestlé USA, Inc. Glendale (California) 100% USD 1'000.00
Nestlé Prepared Foods Company Solon (Ohio) 100% USD 476'760.00
Nestlé Purina PetCare Company St. Louis (Missouri) 100% USD 1'000.00
Nestlé Waters North America, Inc. Wilmington (Delaware) 100% USD 10'000'000.00
Nestlé Ice Cream Company Holdings, Inc. Wilmington (Delaware) 100% USD 1'000.00
Nespresso USA, Inc. New York 100% USD 7'010'000.00
Nestlé Puerto Rico, Inc. San Juan (Puerto Rico) 100% USD 500'000.00
Alcon Laboratories, Inc.* Fort Worth (Texas) 74.63% USD 1'000.00
Falcon Pharmaceuticals, Ltd. Fort Worth (Texas) 74.63% USD 0.00
Alcon (Puerto Rico), Inc.* San Juan (Puerto Rico) 74.63% USD 100.00
° Dreyer’s Grand Ice Cream Holdings, Inc. Wilmington (Delaware) 67% USD 963'946.47
Listed on the NASDAQ, market capitalisation USD
2'255,4 mio, quation code "DRYR")
Guatemala
Nestlé Guatemala S.A. Mixco/Guatemala 100% GTQ 23'460'600.00
NZMP Guatemala S.A. Guatemala City 100% GTQ 1'958'800.00
Honduras
Nestlé Hondureña S.A. Tegucigalpa (Branch) 100% USD 200'000.00
Jamaica
Nestlé Jamaica Ltd Kingston 100% JMD 49'200'000.00
Mexico
Nestlé México S.A. de C.V. México, D.F. 100% MXN 1'056'377'220.00
Alcon Laboratorios S.A. de C.V.* México, D.F. 74.63% MXN 5'915'300.00
Nescalín, S.A. de C.V. México, D.F. 100% MXN 445'826'740.00
Ralston Purina Mexico S.A. de C.V. México, D.F. 100% MXN 1'000.00
Nicaragua
Productos Nestlé (Nicaragua) S.A. Managua (Branch) 100% USD 150'000.00
55
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Panama
Nestlé Panamá S.A. Panamá City 100% USD 17'500'000.00
Nestlé Caribbean, Inc. Panamá City 100% USD 100'000.00
NZMP Central America S.A. Panamá City 100% USD 1'100'000.00
Paraguay
Nestlé Paraguay S.A. Asunción 100% PYG 100'000'000.00
Peru
Nestlé Perú S.A. Lima 97.38% PEN 133'797'212.00
Puerto Rico
Nestlé Puerto Rico, Inc. Catano 100% USD 500'000.00
Dominican Republic
Nestlé Dominicana S.A. Santo Domingo 97% DOP 48'500'000.00
Uruguay
Nestlé del Uruguay S.A. Montevideo 100% UYP 32'000.00
Venezuela
Nestlé Venezuela S.A. Caracas 100% VEB 516'590'000.00
Cadipro Milk Products, C.A. Caracas 100% VEB 9'505'123'000.00
Asia
Saudi Arabia
Saudi Food Industries Co. Ltd Jeddah 51% SAR 51'000'000.00
Al Manhal Water Factory Co. Ltd Riyadh 60% SAR 7'000'000.00
Springs Water Factory Co. Ltd Dammam 75% SAR 5'000'000.00
Bangladesh
Nestlé Bangladesh Ltd Dhaka 100% BDT 1'100'000'000.00
Cambodia
Nestlé Dairy (Cambodia) Ltd Phnom Penh 80% USD 5'000'000.00
India
° Nestlé India Ltd New Delhi 61.85% INR 964'157'160.00
Listed on the Mumbai and Dehli stock exchange,
market capitalisation INR 66.5 bio, quotation code
(ISIN) INE239A01016
56
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Indonesia
P.T. Nestlé Indonesia Jakarta 90.24% IDR 60'000'000'000.00
Israel
° OSEM Investments Ltd Petach-Tikva 50.10% ILS 96'644'000.00
Listed on the Tel-Aviv stock exchange, market
capitalisation USD 1'027'798'985, quotation code
(ISIN) IL0003040149
Japan
Nestlé Japan Ltd Kobe 100% JPY 10'000'000.00
Nestlé Japan Holding Ltd Ibaragi 100% JPY 20'000'000'000.00
Nestlé International Foods K.K. Kobe 100% JPY 10'000'000.00
Nestlé Confectionery K.K. Kobe 100% JPY 10'000'000.00
Nestlé Purina PetCare Ltd. Kobe 100% JPY 20'000'000.00
Nestlé Beverage K.K. Kobe 100% JPY 20'000'000.00
Nestlé Snow K.K. Tokyo 50% JPY 20'000'000.00
Nestlé Japan Administration Ltd Kobe 100% JPY 10'000'000.00
Alcon Japan Ltd* Tokyo 74.63% JPY 27'500'000.00
Nestlé Japan Manufacturing Ltd Kobe 100% JPY 10'000'000.00
Venet Tohoku K.K. Sendai 100% JPY 80'000'000.00
Venet Tokyo K.K. Tokyo 100% JPY 95'000'000.00
Venet Chubu K.K. Nagoya 100% JPY 10'000'000.00
Venet Kinki K.K. Tokyo 100% JPY 70'000'000.00
Venet Chugoku K.K. Hiroshima 100% JPY 95'000'000.00
Venet Shikoku K.K. Tokyo 100% JPY 12'000'000.00
Venet Kyusyu K.K. Fukuoka 100% JPY 50'000'000.00
Tokyo Skol K.K. Chiba 100% JPY 20'000'000.00
Jordan
Nestlé Jordan Trading Co. Ltd Amman 49% JDD 410'000.00
Kuwait
Nestlé Kuwait General Trading Co. W.L.L. Safat/Kuwait 49% KWD 300'000.00
Lebanon
Société pour l’Exportation des Produits
Nestlé S.A. Beyrouth 100% CHF 1'750'000.00
SOHAT Distribution S.A.L. Hazmieh 100% LBP 160'000'000.00
Malaysia
° Nestlé (Malaysia) Bhd. Petaling Jaya 66.97% MYR 234'500'000.00
Listed on the KLSE, market capitalisation
MYR 5,1 bio, quotation code (ISIN)
MYL4707OO005
Nestlé Foods (Malaysia) Sdn. Bhd. Petaling Jaya 66.97% MYR 100'000'000.00
Nestlé Products Sdn. Bhd. Petaling Jaya 66.97% MYR 25'000'000.00
Nestlé Asean (Malaysia) Sdn. Bhd. Petaling Jaya 66.97% MYR 42'000'000.00
Nestlé Manufacturing (Malaysia) Sdn. Bhd. Petaling Jaya 66.97% MYR 32'500'000.00
57
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Oman
Nestlé Oman Trading LLC Muscat 49% OMR 300'000.00
Pakistan
° Nestlé Milkpak Ltd Lahore 59% PKR 452'731'000.00
Listed on the Karachi and Lahore stock
exchange, market capitalisation
PKR 17'023 mio
Philippines
Nestlé Philippines, Inc. Makati City 100% PHP 2'300'927'200.00
Goya, Inc. Metro Manila 99.80% PHP 358'234'812.00
Nestlé Waters Philipines, Inc. Makati City 100% PHP 420'000'000.00
Republic of Korea
Nestlé Korea Ltd Seoul 100% KRW 17'033'060'000.00
Alcon Korea Ltd* Seoul 74.63% KRW 200'000'000.00
Ralston Purina Korea Inc. Seoul 100% KRW 1'169'000'000.00
Singapore
Nestlé Singapore (Pte) Ltd Singapore 100% SGD 1'000'000.00
Sri Lanka
° Nestlé Lanka Ltd Colombo 90.80% LKR 537'254'630.00
Listed on the Colombo stock exchange,
market capitalisation LKR 4.1 bio, quotation
code (ISIN) NEST
International Dairy Products Ltd Colombo 60% LKR 30'000'000.00
58
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Syria
Nestlé Syria Ltd Damas 100% SYP 800'000'000.00
Société pour l’exportation des
produits Nestlé S.A Damas 100% CHF 1'750'000.00
Taiwan
Nestlé Taiwan Ltd Taipei 100% TWD 300'000'000.00
Alcon Pharmaceuticals Ltd* Taipei (Branch) 74.63% CHF 100'000.00
Thailand
Nestlé Products (Thailand), Inc. Bangkok (Branch) 100% USD 1'000'000.00
Quality Coffee Products Ltd Bangkok 49% THB 400'000'000.00
Nestlé Foods (Thailand) Ltd Bangkok 100% THB 700'000'000.00
Nestlé Trading (Thailand) Ltd Bangkok 49% THB 750'000.00
Nestlé Manufacturing (Thailand) Ltd Bangkok 100% THB 250'000'000.00
Nestlé (Thai) Ltd Bangkok 100% THB 880'000'000.00
Nestlé Dairy (Thailand) Ltd Bangkok 100% THB 46'000'000.00
Perrier Vittel (Thailand) Ltd Bangkok 100% THB 235'000'000.00
Alcon Laboratories (Thailand) Ltd* Bangkok 74.63% THB 2'100'000.00
Vietnam
Nestlé Vietnam Ltd Bien Hoa 100% USD 38'598'000.00
La Vie Joint Venture Company Long An 65% USD 2'513'000.00
Oceania
Australia
Nestlé Australia Ltd Sydney 100% AUD 274'000'000.00
Petersville Australia Ltd Melbourne 100% AUD 84'702'714.00
Nestlé Echuca Pty Ltd Melbourne 100% AUD 270'000.00
Alcon Laboratories (Australia) Pty Ltd* Frenchs Forest 74.63% AUD 2'550'000.00
Fiji
Nestlé (Fiji) Ltd Ba 74% FJD 3'000'000.00
New Zealand
Nestlé New Zealand Ltd Auckland 100% NZD 2'668'000.00
Papua-New Guinea
Nestlé (PNG) Ltd Lae 100% PGK 11'850'000.00
French Polynesia
Nestlé Polynesia S.A. Papeete 100% XPF 5'000'000.00
New Caledonia
Nestlé Nouvelle-Calédonie SAS Noumea 100% XPF 250'000.00
59
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
2. Affiliated companies for which the method of proportionate consolidation is used (see "Scope of
consolidation”).
Europe
Germany
C.P.D. Cereal Partners Deutschland
GmbH & Co. OHG Frankfurt am Main 50% EUR 511'291.88
Galderma Laboratorium GmbH* Freiburg/Breisgau 50% EUR 800'000.00
Spain
Cereal Partners España AEIE Esplugues de Llobregat
(Barcelona) 50% EUR 120'202.42
Laboratorios Galderma S.A.* Madrid 50% EUR 432'480.00
France
Cereal Partners France Noisiel 50% EUR 3'000'000.00
Galderma International SAS* La Défense 50% EUR 832'620.00
Greece
C.P. Hellas E.E.I.G. Maroussi 50% GRD 50'000'000.00
Hungary
Cereal Partners Hungaria Kft. Budapest 50% HUF 22'000'000.00
Italy
Galderma Italia S.p.A.* Milano 50% EUR 112'000.00
Poland
Cereal Partners Poland Torun-Pacific
Sp. z o.o. Torun 50% PLN 12'316'960.00
Portugal
Cereal Associados Portugal AEIE Oeiras 50% EUR 99'759.58
Sweden
Galderma Nordic AB* Bromma 50% SEK 67'400'000.00
United Kingdom
Cereal Partners UK Herts 50% GBP 0.00
Galderma (U.K.) Ltd* Amersham 50% GBP 1'500'000.00
Switzerland
Beverage Partners Worldwide Europe S.A. Urdorf 50% CHF 2'000'000.00
Belté Schweiz AG Urdorf 50% CHF 3'100'000.00
CPW Operations Sàrl Prilly 50% CHF 20'000.00
60
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Americas
Argentina
Dairy Partners Americas Argentina S.A. Buenos Aires 50% ARS 12'000.00
Dairy Partners Americas Manufacturing
Argentina S.A. Buenos Aires 50% ARS 12'000.00
Brazil
Galderma Brasil Ltda* São Paulo 50% BRL 19'741'552.00
CPW Brasil Ltda Cacapava/São Paulo 50% BRL 37'885'520.00
Dairy Partners Americas Brazil Ltda. São Paulo 50% BRL 27'606'368.00
Dairy Partners Americas Manufacturing
Brazil Ltda. São Paulo 50% BRL 39'468'974.00
Canada
Galderma Canada Inc.* Markham 50% CAD 100.00
Chile
Cereales CPW Chile Ltda Santiago de Chile 50% CLP 3'026'156'114.00
United States
Beverage Partners Worldwide
(North America) Wilmington (Delaware) 50% USD 0.00
Galderma Laboratories, Inc.* Fort Worth (Texas) 50% USD 981.00
Mexico
CPW México S. de R.L. de C.V. México, D.F. 50% MXN 132'504'000.00
Galderma México S.A. de C.V.* México, D.F. 50% MXN 2'385'000.00
Puerto Rico
Payco Foods Corporation Bayamon 50% PRD 890'000.00
Venezuela
Corporacíon Inlaca, C.A. Caracas 50% VEB 6'584'590'000.00
Asia
Malaysia
Cereal Partners (Malaysia) Sdn. Bhd. Selangor 50% MYR 1'025'000.00
Republic of Korea
Beverage Partners Worldwide Korea Seoul 50% KRW 50'000'000.00
Galderma Korea Ltd. Seoul 50% KRW 375'000'000.00
Thailand
Beverage Partners Asia Ltd Bangkok 33.70% THB 20'000'000.00
61
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Oceania
Australia
Galderma Australia Pty Ltd. Frenchs Forest 50% AUD 2'700'100.00
Principal associated companies which operate in the food and water sectors, with the exception of
those marked with an asterisk (*) which are engaged in the cosmetics and dermatology sectors. For
which the equity method is used – see “Scope of consolidation”.
Germany
Alois Dallmayr Kaffee OHG München 25% EUR 5'112'918.81
France
° L’Oréal S.A.* Paris 26.40% EUR 135'212'432.00
Listed on the Paris stock exchange, market
capitalisation EUR 44 bio, quatation code (ISIN)
FR0000120321
Société de Bouchages Emballages
Conditionnement Moderne Lavardac 50% EUR 10'200'000.00
Malaysia
Premier Milk (Malaysia) Sdn. Bhd. Kuala Lumpur 25% MYR 24'000'000.00
Bahamas
Nestlé’s Holdings Ltd Nassau 100% BSD 10'003'000.00
Food Products (Holdings) Ltd Nassau 100% BSD 28'600.00
Belgium
Centre de Coordination Nestlé S.A. Bruxelles 100% EUR 7'596'391'600.00
N.V. Alcon Cordination Center* Puurs 74.63% EUR 415'000'000.00
Canada
Nestlé Capital Canada Ltd North York (Ontario) 100% CAD 1'010.00
Denmark
Nestlé Danmark Holding A/S Copenhagen 100% DKK 203'015'000.00
Ecuador
Neslandina S.A. Quito 100% USD 17'043'150.00
62
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
United States
Nestlé Holdings, Inc. Wilmington (Delaware) 100% USD 100'000.00
Nestlé Capital Corporation Wilmington (Delaware) 100% USD 1'000'000.00
Nestlé Waters North America Holdings, Inc. Greenwich (Connecticut) 100% USD 10'700'000.00
Alcon Capital Corporation* Fort Worth (Texas) 74.63% USD 1'000.00
Alcon Holdings, Inc.* Fort Worth (Texas) 74.63% CHF 24'020.00
Checkerboard Holding Company, Inc. Wilmington (Delaware) 100% USD 1'001.00
France
Nestlé Entreprises SAS Noisiel 100% EUR 739'559'392.00
Nestlé Finance-France S.A. Noisiel 100% EUR 440'000.00
Nestlé Waters SAS Paris 100% EUR 154'893'080.00
Société Immobilière de Noisiel Noisiel 100% EUR 22'753'550.00
Société Financière Meunier Nosiel 99.98% EUR 53'964'945.00
Italie
Nestlé Finanziara Italia SpA Milano 100% EUR 5'000'000.00
Panama
Unilac, Inc. Panamá City 100% CHF 1'200'000.00
Philippines
NTC-Asia Pacific, Inc. Makati City 100% PHP 50'000'000.00
United Kingdom
Nestlé Holdings (U.K.) PLC Croydon 100% GBP 57'940'000.00
Nestlé Purina Holdings (U.K.) Ltd Croydon 100% GBP 100.00
Nestlé Purina Investment Ltd. Croydon 100% GBP 1.00
Nestlé Waters Powwow (U.K.) Holdings Ltd Croydon 100% GBP 6'500'001.00
Singapore
Nestlé TC Asia Pacific (Pte) Ltd Singapore 100% SGD 1.00
Switzerland
Entreprises Maggi S.A. Cham 100% CHF 60'000.00
Nestlé Finance S.A. Cham 100% CHF 30'000'000.00
Rive-Reine S.A. La Tour-de-Peilz 100% CHF 2'000'000.00
S.I. En Bergère Vevey S.A. Vevey 100% CHF 19'500'000.00
° Alcon Inc.* Hünenberg 74.63% CHF 61'862'054.60
Listed on the New York stock exchange, market
capitalisation USD 18'709 mio, quotation code
(ISIN) CH0013826497
Galderma Pharma S.A.* Lausanne 50% CHF 48'900'000.00
Life Ventures S.A. La Tour-de-Peilz 100% CHF 30'000'000.00
NTC-Europe S.A. Vevey 100% CHF 100'000.00
NTC-Latin America S.A. Cham 100% CHF 500'000.00
Beverage Partners Worldwide S.A. Urdorf 50% CHF 14'000'000.00
63
Nestlé Consolidated accounts of the Nestlé Group
Technical assistance
Switzerland
Nestec S.A. Vevey
Technical, scientific, commercial and business assistance company whose units, specialised in all areas of the business, supply
permanent know-how and assistance to operating companies in the Group within the framework of licence and equivalent
contracts. It is also responsible for all scientific research and technological development, which it undertakes itself or has done on its behalf
by its subsidiary companies. The companies and units involved are:
Research centres
France
Nestlé Research Centre Plant Science Tours
Switzerland
Nestlé Research Center Lausanne
United States
Nestlé Product Technology Center New Milford (Connecticut)
Nestlé R&D Center, Inc. Marysville (Ohio)
Nestlé R&D Center, Inc. Solon (Ohio)
Nestlé Purina Product Technology Center St. Louis (Missouri)
Alcon Research Ltd* Fort Worth (Texas)
Galderma R&D Inc.* City of Dover (New Jersey)
France
Nestlé Product Technology Centre Beauvais
Nestlé Product Technology Centre Lisieux
Nestlé Purina PetCare R&D Centre Amiens Aubigny
Galderma R&D S.n.c.* Sophia Antipolis
Nestlé Waters MT Paris
United Kingdom
Nestlé Product Technology Centre York
Israel
Nestlé R&D Centre Sderot, Ltd. Sderot
64
Nestlé Consolidated accounts of the Nestlé Group
% capital
Companies City sharholdings Currency Capital
Singapore
Nestlé R&D Center (Pte) Ltd Singapore
Switzerland
Nestlé Product Technology Centre Konolfingen
Nestlé Product Technology Centre Orbe
65
137th Annual report of Nestlé S.A.
Income
Income from Group companies 1 4'755 6'201
Interest income 2 121 233
Profit on disposal of fixed assets 3 867 3'982
Other income 25 25
Total Income 5'768 10'441
Expenses
Investment write downs 4 1'506 2'293
Administration and other expenses 5 151 163
Interest expense 6 267 626
Provision 7 - 3'796
Total expenses before taxes 1'924 6'878
66
137th Annual report of Nestlé S.A.
Assets
Current assets
Liquid assets 9 5'876 5'345
Receivables 10 745 938
Prepayments and accrued income 66 176
Total current assets 6'687 6'459
Fixed assets
Financial assets 11 25'120 20'202
Intangible assets 14 - 1'030
Tangible fixed assets 15 - -
Total fixed assets 25'120 21'232
Liabilities
Short term payables 16 3'762 67
Accruals and deferred income 132 106
Long term payables 17 231 234
Provisions 18 3'229 3'742
Total liabilities 7'354 4'149
Equity
Share capital 19/20 404 404
Legal reserves 20 6'392 6'392
Special reserve 20 14'041 13'417
Retained earnings 20 3'616 3'329
Total equity 24'453 23'542
67
137th Annual report of Nestlé S.A.
68
137th Annual report of Nestlé S.A.
69
137th Annual report of Nestlé S.A.
This represents dividends of the current and prior years and other net income from Group companies.
2. Interest income
Substantial unrealised exchange losses on long term loans to Group companies were recorded as a
result of the strengthening of the Swiss Franc against most foreign currencies. The interest income
arising on these loans partially compensated these exchange losses. The net charge is included
under "Interest expense" in note 6.
This represents mainly the net gains realised on the sale of participations to Group companies as part
of reorganisation programmes, as well as on the sale of trademarks and other industrial property
rights previously written down.
The write down of trademarks and other industrial property rights in 2003 includes the balance of
CHF 1 030 million in respect of Ralston Purina and Chef America that was capitalised at the end of
2002.
70
137th Annual report of Nestlé S.A.
6. Interest expense
7. Provision
In 2002, a fiscal rollover ("remploi") provision was made to defer the gains on the sale of 25% of
Alcon Inc and on the disposal of FIS S.A.
This provision can be used to write down the cost of any investments in the books of Nestlé S.A. (see
note 18).
8. Taxes
This includes withholding taxes on income from foreign sources, as well as Swiss taxes for which
adequate provisions have been established.
9. Liquid assets
71
137th Annual report of Nestlé S.A.
10. Receivables
The amount owed to the Company in respect of Swiss withholding tax was received after the year-
end.
72
137th Annual report of Nestlé S.A.
The carrying value of participations continues to represent a conservative valuation having regard to
both the income received by the Company and the net assets of the Group companies concerned.
A list of the most important companies held, either directly by Nestlé S.A. or indirectly through other
Group companies, with the percentage of the capital controlled, is given in the section “Consolidated
accounts of the Nestlé Group”.
A Canadian affiliate has been granted options to purchase shares in certain Group companies
situated outside Continental Europe.
Loans granted to Group companies are usually long term to finance investments in participations.
73
137th Annual report of Nestlé S.A.
These are principally the land and buildings at Cham and at La Tour-de-Peilz. Nestlé Suisse S.A., the
principal operating company in the Swiss market, is the tenant of the building at La Tour-de-Peilz. The
"En Bergère" head office building in Vevey is held by a property company, which is wholly owned by
Nestlé S.A.
The fire insurance value of buildings, furniture and office equipment amounted to CHF 22 million at
31st December 2003 and 2002.
Amounts owed to Group companies represent a long-term bond issued in 1989. The carrying value
decreased by CHF 3 million to CHF 231 million as a result of an unrealised exchange difference
arising in 2003.
74
137th Annual report of Nestlé S.A.
18. Provisions
Unused amounts
reversed 0 (4)
The provision for fiscal rollover ("remploi") has been partially utilised during the year for the write
down of participations acquired in 2003.
2003 2002
According to article 6 of the Company’s Articles of Association, no natural person or legal entity may
be registered as a shareholder with the right to vote for shares which it holds, directly or indirectly, in
excess of 3% of the share capital. In addition, article 14 provides that, on exercising the voting rights,
no shareholder, through shares owned or represented, may aggregate, directly or indirectly, more
than 3% of the total share capital.
At 31st December 2003, the Share Register showed 194 535 registered shareholders. If unprocessed
applications for registration and the indirect holders of shares under American Depositary Receipts
are also taken into account, the total number of shareholders probably exceeds 250 000. The
Company was not aware of any shareholder holding, directly or indirectly, 3% or more of the share
capital.
75
137th Annual report of Nestlé S.A.
In millions of CHF
76
137th Annual report of Nestlé S.A.
At 31st December 2002, the reserve for own shares amounting to CHF 2 830 million, represented the
cost of 7 852 620 freely available shares acquired by a Group company (of which, 2 796 932 shares
were reserved to cover options rights granted since 2001 in favour of members of the Group's
Management), as well as 748 315 shares reserved to cover option rights granted up to the year 2000,
3 527 680 shares earmarked to cover warrants attached to bond issues of an affiliated company and
4 470 644 shares held for trading purposes.
During the year, a total of 1 221 000 shares have been acquired at a cost of CHF 318 million and
2 248 108 shares have been sold for a total amount of CHF 654 million (including 81 853 that
represented shares for which options were exercised during the year).
At 31st December 2003, 7 830 665 freely available shares were held by a Group company at an
acquisition cost of CHF 30 million. The Board of Directors has decided that these shares will be
earmarked for Nestlé Group companies' remuneration plans in Nestlé S.A. shares and options thereon
(including the Share Plan of the Board of Directors, the Short Term Bonus-Share Plan of the Executive
Board and the Management Stock Option Plan 2001 onwards, under which a total of 4 336 922
options was outstanding at 31st December 2003). As long as these shares are held by the Group
company, they will be recorded in the Share Register as being without voting rights and will not rank
for dividends. In addition to these, 3 551 694 shares were held for trading purposes, 665 302 shares
were reserved to cover Management option rights granted before 2001 and 3 524 490 shares were
earmarked to cover warrants attached to bond issues of an affiliated company. As long as the options
and warrants are not exercised, or the shares sold, these shares are also recorded in the Share
Register as being without voting rights and do not rank for dividends.
The total of 15 572 151 own shares held at 31st December 2003 represents 3.9% of Nestlé S.A.'s
share capital.
22. Contingencies
At 31st December 2003 and 2002, the total of the guarantees for credit facilities granted to Group
companies and Commercial Paper Programs, together with the buy-back agreements relating to notes
issued, amounted to CHF 15 038 million and CHF 16 862 million, respectively.
77
137th Annual report of Nestlé S.A.
Retained earnings
Balance brought forward 687'080 1'184'101
Profit for the year 3'615'299'708 3'328'174'639
3'615'986'788 3'329'358'740
78
137th Annual report of Nestlé S.A.
As statutory auditors, we have audited the accounting records and the financial statements
(balance sheet, income statement and annex) of Nestlé S.A. for the year ended
31st December 2003.
These financial statements are the responsibility of the Board of Directors. Our responsibility
is to express an opinion on these financial statements based on our audit. We confirm that
we meet the legal requirements concerning professional qualification and independence.
Our audit was conducted in accordance with auditing standards promulgated by the Swiss
profession, which require that an audit be planned and performed to obtain reasonable
assurance about whether the financial statements are free from material misstatement. We
have examined on a test basis evidence supporting the amounts and disclosures in the
financial statements. We have also assessed the accounting principles used, significant
estimates made and the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the accounting records, financial statements and the proposed appropriation
of retained earnings comply with Swiss law and the company’s articles of incorporation.
We recommend that the financial statements submitted to you be approved.
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137th Annual report of Nestlé S.A.
Sir Edward George, British, born in 1938, former Governor of the Bank of England.
Mr. Kaspar Villiger, Swiss, born in 1941, former Federal Councillor and former President of
the Swiss Confederation.
Mr. Rolf Hänggi, Swiss, born in 1943, Vice Chairman of the Board of Directors of
Roche Holding Ltd, Basel, Switzerland.
Mr. Daniel Borel, Swiss, born in 1950, Co-founder and Chairman of the Board of Directors of
Logitech International S.A., Apples, Switzerland.
Mrs. Carolina Müller-Möhl, Swiss, born in 1968, Chairman of the Board of Directors of the
Müller-Möhl Group, Zurich, Switzerland.
All candidates correspond to the nomination criteria, which specifically include professional
experience, international exposure and independence of judgement. These proposals reflect
the aim to continue to assure that the Board of Directors of Nestlé S.A. benefits from all
competences and experiences required for the Group.
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137th Annual report of Nestlé S.A.
22nd April 2004 137th Ordinary General Meeting, “Palais de Beaulieu”, Lausanne
21st October 2004 Announcement of first nine months 2004 sales figures;
Autumn press conference
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137th Annual report of Nestlé S.A.
Shareholder information
82