NESTLE

Mission
Statement
investigation
ANALYSIS OF ANNUAL REPORT

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 NUML UNIVERSITY OF MODER LANGUAGES
ISLAMABAD

Department: Management Sciences

Report of Nestle:
Subject: Human Resources Management

DOS: 17/12/2020

Submitted to: Mr Adnan Iftikhar

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 Selection of Company

According to the advice of our honorable teacher Adnan Iftikhar, We have to select the
multinational company.

Nestle Pakistan

And finally by the discuss of our group member we have to selected company.

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 We are the Good food, Good Life Company

“Nestlé” is a Swiss multinational food and beverage company whose business started in 1866. It
is one of the largest food companies in the world, with presence in 191 countries, and more than
2,000 brands.

Some of these are globally iconic while others are just regional, presenting a great variety of
products, such as tea, coffee, bottled water, medical and baby food, breakfast cereals, and lots
more. It is a well-known company world-wide, especially because of Nestlé milk chocolate bar,
which is one of the most famous products.

The company focuses on the production and supply of great quality and healthy food products.
The Company’s priority is to bring the best and most relevant products to people, wherever they
are, whatever their needs are, and for all age groups. Its main objectives are to serve the
consumers with best products. People, products and brands are the main flag bearers of the
Company’s image,

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 MISSION STATEMENT

Nestle mission statement is “Good Food, Good Life” is to provide consumers with the

best tasting, most nutritious choices in a wide range of food and beverage categories and

eating occasions, from morning to night.”

1 Core Values

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 Be specific to have an impact upon on the behavior of individuals throughout the business.

Customer satisfaction

The mission statement of Nestle focuses on addressing issues of customer satisfaction. The
mission statement of Nestle has identified its target customer groups, and also identified their
needs and demands. The mission statement reflects on how its products and services work
towards increasing customer satisfaction for its target customers.

This statement also reflects the image of high-quality products that Nestle offers . Every day,
millions of people all over the world show their trust in the company by choosing Nestle
products. This trust comes from a quality image that has been built up for over a century. Top
priority is consumer. They believe that they cannot exist without their customers. So while
designing their products they first think about the need of customer.

Employee’s satisfaction

 Nestlé leads food companies in employee satisfaction awards from the country biggest
employee’s satisfaction survey.(150 Pvt & public companies poll in Australia)
 At Nestlé we believe that it is important to give people the opportunities for life-long
learning. Nestle provides a very healthy working environment
 ‘Nestle Family’ annual events are organized by their HR department whereby employees
along with their families are invited.
 Employee turnover is less than 5%., which is considered to be very low for a multinational
corporation.
 Nestle has almost employs around 339,000.people.
 Different benefits which include:(Leave-Personal & Medical, Children Education Assistance
Scheme, Provident fund, Retirement Gratuity Scheme, Group & Individual Insurance)

Training & Development

 Nestle encourage its employee force to training if need.

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 Enhancing this virtuous circle is the ultimate goal of our training efforts at many different
levels through the thousands of training programs Nestle run each year.

 Nestlé Apprenticeship Program for the training and appreciation for employees all over the
world. And also many others International Training Centers.

 Nestlé operating companies run their own training centers. Training is the largest component
of Nestlé’s people development activities worldwide and a majority of the company’s 240
000 employees receive training every year.
 Nestle is holding workshops to refine the values being defined in the mission statement and
build them in its employee force.
 Training can be in-house or out-house for employees

Stake Holders:

 Nestle the mission statement includes to all stakeholders – employees, customers,

shareholders, public, government etc.
 Nestle believes Delivering shareholder value through profitable long term growth.
 Nestlé believes for a company to be successful in the long term and create value for its
shareholders, it must also create value for society.
 Nestle engage &, listen to and respond to a wide range of stakeholders on a regular basis and
believe stakeholders have helped us improve and set the priorities for our Creating Shared
Value strategy.
 It is one of the main shareholders of L’Oreal, the world’s largest cosmetics company.
 Nestle work with suppliers from a range of countries, many in poorer regions of the world; it
is becoming increasingly important to take a wider view of responsibilities.

Reflect the distinghing advantages of the orgnization

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Competitive advantages

 Unmatched product and brand True competitive advantage comes from a combination of hard-to-
portfolio copy advantages throughout the value chain, built up over decades.
 Unmatched R&D capability
There are inherent links between great products and strong R&D,
 Unmatched geographic presence
Between the broadest geographic presence and an entrepreneurial
 People, culture, values and
spirit, between great people and strong values.
attitude

Operational pillars

 Innovation & Renovation Nestlé must excel at each of these four inter-related core competences.
They drive product development, renewal and quality operational
 Wherever, whenever, however
performance, interactive relationships with consumers and other
 Consumer engagement stakeholders and differentiation from our competitors.

 Operational efficiency
If we excel in these areas we will be consumer-centric, we will
accelerate our performance in all key areas and we will achieve
excellence in execution.

Differentiation from its competitor

It has more variety in food products line as compared to its competitors. It has more variety in
food products line as compared to its competitors. Nestlé is the market leader in food and
beverage industry. They are producing high quality well-known brands.

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Nestle also selects the differentiated marketing. It offers wide range of different product
for different segments based on different age, occupation, season and climate

.Nescafe 3 in 1: Coffee for people who are busy.

Koko Krunch, Nesquick: Chocolate milk who want to get taste of chocolate.

Nescafe Ice: Cold coffee for the people in hot weather.

 By creating product, service, channel, people and image differentiation Nestle reach
the consumer touch point more effectively and efficiently in comparing with their
competitors in the highly competitive food-processing sector.
 It has many advantages over competitors by offering different types quality products.
To create profitable relationship with the different types of customers. Nestle stays alert
and finds different ways to differentiate itself in the eye of every customer.
 Marketers often prepare perpetual positioning map to plan strategies.
 It shows consumer perceptions of their brands versus competing products on important
buying dimensions.
 The company always tries to maintain a better position in consumer minds than others
 It pushes customer to understand that Nestlé’s product are healthier and better driven by
company’s promise.

BE REALISTIC AND ATTAINABLE

Is nestle is giving the consumers best testing food and service effectively and within time. To
make better food so those people live a better life

This means that Nestle sets objectives keeping in view the organizational resources and
constraints to be able to achieve its mission statement effectively and within time. Nestlé's is to

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 manufacturing and market the products in such a way as to create value that can be sustained
over the long term for shareholders, employees, consumers, and business partners.

 By promoting good health

Nestle can help people live longer, happier lives and they believe that through nutrition they

can help prevent disease and make the world a healthier place. They are particularly focused

on encouraging health world to eat nutritious food and get active by creating new and better

products, promoting education and conducting industry.

How they are fulfilling the criteria of attainable and realistic

 By Launching more nutritious foods and beverages, especially for mothers-to-be, new
mothers and children

 Empower parents, caregivers and teachers to foster healthy behaviors in children;

 Advocate for water as a top choice for healthier hydration;

 Leverage marketing efforts to promote healthy cooking, eating and lifestyles;

 Apply and explain nutrition information on packs, at point of sale and on-line;

 Partner for promoting healthy food environments;

 Build and share nutrition knowledge and build health-promoting products.

 By giving people high quality products protected them from impure products.

 Offering them good quality food to meet their needs

Nestle measures the performance and satisfaction by listening to customers’ feedbacks. When
mistakes and shortcomings are analyzed, prompt action will be taken for correction and

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improvement. Besides, understanding customer needs and meeting the satisfaction of the
customer leads to the high quality of the products. Adequate resources, equipment’s, procedures
and systems are provided to sustain the high quality of the product.

 The company never compromises on food

Nestle strive for zero defect and no wastage when it comes to quality. They focus on zero defects
while seeking opportunities for continuous improvement of quality standards delivered to the
customers and consumers.

 Nestlé's purpose

Inspire people to live healthier lives. This is how we contribute to society while ensuring the
long-term success of our company. With over 140 years of experience and expertise, they take
great pride in bringing you the best products because happy, healthy consumers are important.
They develop their products keeping the preferences, tastes, and needs of customers in mind.

They understand along with millions of other consumers, know that and trust on products to
deliver purity, quality, convenience, and nutrition. Our products are carefully aligned to Pakistani
tastes and needs. Nestle is always trying hard to develop new products and improve existing
ones, and serve our consumers better. That’s why through constant renovation and innovation
they’re always testing or launching value added products and making them available in sizes that
will suit every requirement.

Be Flexible enough to take accounts of shifts in the environment

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While promoting a common value in nutrition and protecting the environment in which their
businesses operate.

Nestlé considers its people as its most valuable asset and ranks the highest priority on protecting
them. In every country where Nestle operate, it emphasizes the need for safe working
environments, which must meet the strict global corporate standards. They are determined to
provide a safe working environment for all employees, contractors and visitors and are vigilant
in continuing to implement Health and Safety practices and programs at all the sites.

Valuing people by providing a safe place to work.

Identifying, assessing and reducing risk of products

By supporting their mission of ‘good food and good life’ in a changing social environment i.e.
rising levels of child

 Innovations
More nutritious food and beverages for children and families. Every year, we sell over 360
billion servings of foods and beverage in 189 countries around the world. To ensure our brands
support healthier lifestyles.

In 2017, we have launched over 1000 new products which meet the nutritional needs of children.
In the same year, we provided over 174 billion servings of fortified foods and beverages in
countries where people lack vital micronutrients such as iodine or iron.

Ensuring our products are both nutritious and tasty can be challenging. With both the passion of
our employees and our industry-leading innovation, we are focusing our efforts on delivering
even more nutritious food and beverages for children and families.

 COVID 19 Situation

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The spread of the coronavirus has required extraordinary effort from our team in China. We have
focused on ensuring the safety of our people and their families and introducing protective
measures for all our facilities. We are working closely with the Chinese authorities as they take
measures to contain this epidemic, building on our significant experience and expertise on the
ground.

Our immediate thoughts are with the people directly impacted by this global health emergency.
We stand in solidarity with the Chinese people and are working hard to ensure our nutritious
food and beverages continue to be widely available, particularly those for the most vulnerable,
the youngest and the oldest in society.

The Greater China region is our second largest market, representing about 8% of global sales. It
is too early to quantify the financial impact of this outbreak at the present time."

 NESTLE care about our responsibility to provide good nutrition, especially for the most
vulnerable in society – children, the elderly and those struggling with illness.
 NESTLE have implemented enhanced safety measures at all our sites, with particular focus
on our frontline workers in Nestlé factories, quality labs and distribution centers.

 As Nestle said its mission statement to provide consumers best tasting food in any occasion
from day to night. Nestle donate food, medical nutrition products and bottled water to bring
relief to those most affected by the pandemic.
 Partnership with the International Federation of the Red Cross and Red Crescent Societies
(IFRC)

 Also, where needed, NESTLE offering free meals and transport for staff to help reduce the
risk they fall ill

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 Conclusion
Either the company is working according to its mission statement or not?

As we discussed the core values of nestle and investigation its mission statement I can say that the
company is filling the criteria of its mission statement and working with its goals and its objects.

Nestle believe on quality that leads to good business and good development. Either we see the
aspects of how nestle deals with its customers, consumers and shareholders and work with the
pandemics situation and filling the customers’ needs and requirements of Good food Good life
satisfying their customers with good services and innovations.

While focus on pure products while seeking opportunities for continuous improvement of quality
standards delivered to the customers and consumers. Inspire people to live healthier lives. It has
more variety in food products line as compared to its competitors Nestle is working related to its
mission that’s why daily millions of people trust Nestle.

2 Annual Report

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NESTLE Income Statement Analysis
 Income during the year 12.8%. The company's operating profit increased by 24.9%
 Both profit and sales are increasing. But increase in profit is less than increase in sales. So
the profit earned per revenue is decreasing.
 There is a considerable increase in other expenses which is contributing a negative effect
to the increase in net profit.
 The finished goods handling transport and distribution increase costs increased t his has
resulted in decrease in profit and hence a decrease in profit margin.
Net profit for the year grew by 31.2%.Net profit margins during the year grew from
12.0% in CY17 to 13.9% in CY18.

NESTLE Income Statement 2017-18

No. of Mths Year Ending 12 Dec-17* 12 Dec-18* % Change

Net Sales 100,096 112,923 12.80%
Other income 1,769 2,589 46.30%
Total Revenues 101,865 115,512 13.40%
Gross profit 20,965 26,177 24.90%
Depreciation 3,423 3,357 -1.90%
Interest 919 1,120 21.80%
Profit before tax 18,393 24,290 32.10%
Tax 6,141 8,220 33.90%
Profit after tax 12,252 16,069 31.20%
Gross profit margin 20.9 23.2
Effective tax rate 33.4 33.8
Net profit margin 12 13.9

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NESTLE Balance Sheet Analysis
 The company's current liabilities increased by 24.3%.This imply that Nestle can pay its
current liabilities using its current assets. It is favorable for the Nestlé’s short term
creditors.
 The fixed assets of the nestle is positively increasing and net profit is also increasing.
This shows that the increase in asset is impacting the profits the company. So these assets
are properly utilized in increasing the profit.

NESTLE Balance Sheet as on December 2017-18

No. of Mths Year Ending 12 Dec-17* 12 Dec-18* % Change

Networth 34,206 36,737 7.4

Current Liabilities 14,927 18,550 24.3

Long-term Debt 351 351 0

Total Liabilities 73,626 80,881 9.9

Current assets 39,374 47,370 20.3

Fixed Assets 27,103 25,058 -7.5

Total Assets 73,626 80,881 9.9

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NESTLE Cash Flow Statement Analysis
 The cash inflow through the operational activities increases from the 2010 to 2018. This is
the indication of the financial flexibility. The company is depending on its core activities
for producing cash.
 The company is investing more on its fixed assets which is the indication that the
company is expanding. The investment activities in fixed assets are varying from 1017 to
1018 that means company has spent a lot of money in fixed assets.
 Nestle is paying mostly to dividends than loans. This indicating that it is risk free.
company is at a financial advantage and even if company is to provide higher dividend,
they would be able to do so.

NESTLE Cash Flow Statement 2017-18

12 12
%
Particulars
Dec- Dec- Change
17 18

Cash Flow from Operating 18,17

20,525 12.9%
Activities 8

Cash Flow from Investing

-1,306 -524 -
Activities

Cash Flow from Financing -

-9,966 -
Activities 13,174

Net Cash Flow 6,906 6,826 -1.2%

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Net Profit and Earnings Per Share

 Company’s commitment to Nutrition, Health and Wellness was further strengthened in 2018 through
new product launches, community engagement, contribution to the society and care for the
environment
 The year 2018 was shaped by innovation and renovation, with the launch of around 13 new products.
Net profit benefited from several large one-off items, including income from the disposal
of businesses. The increase was also supported by the improved operating performance.
 Earnings per share increased by 13.9% in constant currency and by 13.1% on a reported basis
to 4.02. Nestlé’s share buyback program contributed 2.0% to the underlying earnings per
share increase, net of finance costs.
 The Group's return on invested capital increased to 12.1%. The improvement was the result
of lower goodwill impairment, improved operating performance and disciplined capital
allocation.

Year Year
Particulars % Change
2017 2018

NET SALES 91'439 89'590 2.5%

PER SHARE EARNING 13.1% 13.9% 4.02%

Net Profit 41.6% 45.5% 3.36%

Group Return 12.1%.

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