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Corporate Human ResourcesCorporate Human ResourcesInvestors Meeting, May 15th, 2006Investors Meeting, May 15th, 2006

Paul BroeckxHead of Corporate Human Resources

Chantal GaemperleHead of Corporate Management Development & Sourcing

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This presentation contains forward looking statements which

reflect Managements current views and estimates. The forward

looking statements 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

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Driving the Transformational Strategy

Strategic Transformation

A long-term transition from

traditionalbusinesses into a

Nutrition, Health andWellness Company

Organizational Transformation

A new organizational dimension : Roleof the Centre, Role of the Market and

Role of the Market Head

Nestl on the Move : From Hierarchyto Network Organization

Human Resources as a Partner & Change Agent toenable Company Transformation

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Nestl on the Move

FROM

RESULT ORIENTATIONTASK ORIENTATION

TOHierarchy Network

AlignmentCommandExperience Insight

Competing Co-operationDiscipline Initiative

National - Functional Cross-border/Cross-functional

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Inspiring Management

Flat & Flexible Structures

Long-Term Development

Dynamic Compensation

Life-long Learning

Prerequisites

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Business objectives to be translated into Personal objectives

Focus on the WHAT but also on the HOW

Focus on development and dialogue

No rating but evaluating the "Nature of the Contribution"

Trails / Acquires / Masters / Steers / Transforms

No mechanic link with salary

"Develop People" : A new approach to PerformanceEvaluation

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New Skills Needed

Inspiring People

Adding Value

Opening UpDealingwith others

Lead people

Develop people

Practisewhat you preach

Know yourself

Insight

Service Orientation Curiosity

Courage

Proactiveco-operation

Impact / Convinceothers

Resultsfocus

Initiative

Innovation &Renovation

Nestl Leadership

Framework

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Transformational Challenge

Develop

People

HR as a Business Partner

RETAIN, EVALUATE AND DEVELOP

Management Development

Progress & Development Guides

Corporate Leadership Programme

Development Centers

ATTRACT

Sourcing (600 hirings a year)

International GraduateProgrammes

Employer Branding

Attractivity Surveys

Driving Evolutionary Change

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ZoneZone

AOAAOA

ZoneZone

AMSAMS

ZoneZone

EUREURWatersWaters NutritionNutrition NespressoNespresso

FunctionsFinance & Control / Technical & Production / Supply Chain

Human Resources / IT/IS

Strategic Business UnitsCoffee & Beverage / Confectionary / Ice-Cream

Petcare / Culinary / Dairy / Foodservices

Network Structure

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Corporate Management Development

Succession Planningfor Corp. Key Positions (Sept 2005)

Work on 2 Axis

Succession Planning

for Corporate Key Positions

SCOPE : ~1200 positions

TARGET : 2 successors per position

Talent Pool Management

Group Talent Pool followed at

Corporate Level

Talent

Pool

Total : 1689

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Corporate Management Development

Increased Scope & Visibility : 1'200 positions on the radar screen

Evolution of Talent Pool over the last 5 years : from 400 to 1'700

Strong Senior Management Involvement

-> June : Talent Pool review

-> September : Succession Planning

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An integrated, global approach toPeople Development

70 Meetings in 2005to prepare for the 2 Key Moments:

Talent Pool & Succession Planning

Across Zones / Businesses / SBUs & Functions

54% changes proposed in the Group

Talent Pool in 2005

increase of 26%

15% Increase of cross-Zones transfers (35%)

F&C : 60% of Group Talents moved between

2004 and 2005

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Global Analysis of Talent Management Groupwide

Key Performance Indicators Followed-up and tracked :

- Number of Key Positions (1'200 groupwide)

- Number of Successors (Target : 2 per Key Position,coming from the Talent Pool)

- Group Talent Pool increase (+ 26% in 2005)

- Follow Up on Performance (Target : 100% of Progress &

Development Guides received for Key Positions Holders,

their successors & the Group Talent Pool)

- Gender representation- Cross Zones / Businesses transfers (+ 15% in 2005)

- Time in position / turnover

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Corporate Leadership ProgramCorporate Leadership ProgramFrom Individual ImpactFrom Individual Impact

To organizational DevelopmentTo organizational Development

"Leadership Is the Capacity to

Inspire People to higher level

of Performance"

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Leadership Development Intervention customised toour needs and challenges

18 months preparation work with LBS

+120 Interviews in 2002 (Australia, UK, US, Germany,France + Centre)

Background and Preparation

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Programme content:

3 main parts:

1 - Open Mindedness - Innovation2 - Leadership & Motivation (Developing others,

Leading others, Performance Management andFeedback)

3 - People relationships in network, relational

skills, teamwork, cooperation and integration Alternance of theory, data feedback and exercices

Approach and Content

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Key Features

Feedback /"Leadership Awareness Survey" (360)

Coaching

Across Zones and Businesses

Early involvement of Top Management, including CEO

Follow-up & Progress Measurement after 12-18 months

External Benchmark

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Core Leadership Programme Follow up sessions Roll out "Nestl 4'000"

12-18 months

after first participation

measurement of

progress

started in 2004 2 sessions in 2004

6 sessions in 2005

6 sessions in 2006

3 regional platforms

London

Miami

Singapore same methodology

and content

A groupwide effort

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From Personal development to Organizational Impact

1) Support development at personal level by :

- giving feedback (know yourself)

- elaborating action plans

- personalized coaching

2) Support organizational evolution by :

- observing cultural and structural

aspects- proposing actions to evolve the

organization

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Conclusion

HR is a strategic partner driving efficiency throughCorporate Initiatives such as :

- The Leadership Program- Management Development

- Develop People- Employer Branding- Industrial Relations- Grading Structure- etc

Such strategic positioning enhances companiescompetitiveness.

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Corporate Human ResourcesCorporate Human ResourcesInvestors Meeting, May 15th, 2006Investors Meeting, May 15th, 2006