CORPORATE BAcKGROUNDER

Nestl Nespresso SA, Corporate Communications, March 2013

Coffee is at the heart of all we do. Yet consumer pleasure is why we do it. AT A GLANCE Coffee is at the heart of all we do. Yet consumer pleasure is why we do it. The Nespresso story began with a simple but revolutionary idea: enable anyone to create the perfect cup of coffee just like a skilled barista. From its beginning in 1986, the Nespresso brand concept has redened and revolutionised the way millions of people enjoy their coffee today, and it has shaped the global coffee culture. Nespresso is not just a coffee. It is a genuine experience that combines perfection and pleasure, simplicity and aesthetics. Nespresso has evolved from being the pioneer and trendsetter into the reference in the portioned coffee category through a singular focus on delivering the ultimate coffee experience to our consumers cup after cup. This is the cornerstone upon which the company was founded, and it is the foundation that has fostered the incredible growth we have enjoyed over the last 27 years. Our success is built on creating the highest quality Grand Cru coffees, long-lasting consumer relationships and sustainable business success. These will continue to be the Key Growth Drivers of our business moving forward, as we compete in the dynamic and growing portioned coffee category. Nestl Nespresso is a company without boundaries, with both a direct business-to-consumer and business-to-business approach. Our Unique Business Model provides a competitive advantage and a strong platform for continued, sustainable growth as we continue to innovate to deliver moments of pleasure and indulgence in everyday life. The strength of our brand, the quality of our coffees and our unique service offering also provide Nestl Nespresso with enormous growth opportunities in the professional sector as well as unique client engagement and service opportunities for business partners. An autonomous globally managed business of the Nestl Group, Nestl Nespresso is present in almost 60 countries worldwide and is headquartered in Lausanne, Switzerland. Over 8,300 employees around the world are focused on continuing to provide the best coffee and exclusive services to consumers around the world.

over

330 employees

2000

2013 over 8,300 employees

UNSURPASSED COFFEE QUAlITY AND DEEP COFFEE EXPERTISE NespressoGrand Cru coffees are produced from an exclusive selection of the nest green coffee grown in the world. Our choice of exceptional blends and pure, single origin coffees is specially developed to suit every taste preference and offer variety to discerning coffee lovers. Only an estimated 1-2% of the coffee grown globally meets our specic taste and Gourmet aroma proles and our high standards coffee 10-20% of quality and sustainability. nESPRESSO

Commercial grades

10%

of the world's green coffee crop

1-2%

PERFORMANcE Nespresso performed strongly in 2012, delivering solid double-digit growth. The company cemented its position in its mature European markets and expanded its presence in the strategic Asia Pacic and Americas regions.

The Nespresso coffee experts at our state-of-the-art production centres in Switzerland orchestrate the subtle interplay of each coffees complex properties, including acidity and body, to compose a range of Grand Cru coffees with unique avour and aroma proles and a tantalising crema.

For more information on Nespresso, please visit: www.nestle-nespresso.com

A global network of over 300 boutiques

UNSTOPPABlE DRIVE FOR INNOVATION, DISTINcTIVE DESIGN AND IN-HOUSE R&D EXPERTISE Continuous innovation and our passion for perfection have been key drivers in our quest to consistently deliver the highest quality coffee to consumers worldwide for enjoyment at home and away from home. The Nespresso system the interaction between the original Nespresso capsule and the genuine Nespresso machine is designed to work as one to deliver the perfect cup of coffee time after time by controlling every variable. It is a technology unique to Nespresso, rened over 27 years by our in-house R&D experts. Our unrelenting focus on innovation and R&D led to the invention of unique technology that delivers a balance between the right water temperature, quantity and speed, along with 19 bars of pressure, creating the perfect cup every time. Today, Nespresso machines range from the compact Essenza model to the PiXie and U models to the specically designed business-to-business machines.

Nespresso is a brand focused on creating perfect experiences and moments of pleasure. The brand welcomes coffee lovers and invites them into an exclusive relationship. The Nespresso Club has grown organically into a global community of some of the most discerning coffee connoisseurs, and it has played a part in evolving the global coffee culture. These Club Members stand as the true representation of our brand and a lifestyle that is selective, yet inviting; accomplished, yet inspiring; simple, yet rened.

UNIqUE BUSINESS MODEl AND ROUTE TO MARKET We are responsible for every stage of the sourcing, production and sale of our coffees. Our Unique Business Model enables us to guarantee quality at every stage of the value chain and to maintain a direct dialogue with our consumers and Club Members. Our unique route to market encompassing our e-commerce platform, our exclusive boutiques and our dedicated Customer Relationship Centres (call centres), along with our partner model for machine distribution provides us with a unique competitive advantage versus our competitors. Business-to-business sales provide an exciting area of growth. We continue to innovate in our business-to-business offerings, providing solutions designed to meet the needs of some of the most discerning hosts in the business and hospitality industry.

ASPIRATIONAl, GlOBAl BRAND AND PASSIONATE GlOBAl BRAND COMMUNITY Over 27 years, Nespresso has grown into one of the most wellrecognised brands in the world of coffee, trusted by millions of consumers the world over as a mark of passion, authenticity and service. The combination of the brands entrepreneurial roots and the modern, forward-looking approach to innovation continues to keep Nespresso relevant in the minds of consumers. It has also allowed it to transcend the product category to become a truly global symbol of understated elegance. Our global network of boutiques offers an insight into the brand, providing consumers with a unique opportunity to experience Nespresso with all their senses. With the opening of over 50 boutiques in 2012, including new agships in London, San Francisco and Seoul, the global Nespresso boutique network grew to more than 300 boutiques worldwide.

UNIqUE EXPERTISE AND A HOlISTIc APPROAch TO SUSTAINABlE QUAlITY DEVElOPMENT We recognise our obligations as the reference in portioned coffee worldwide, and we are committed to ensuring sustainability throughout our operations. It is an important component of what our Club Members and partners expect from us, and it is a core value of our company. The Nespresso EcolaborationTM program provides a framework for partnership and innovation to drive ongoing, sustainable development. The program examines all aspects of coffee sourcing, the production, use and disposal of our capsules, and optimisation of our environmental performance. By 2013, we have committed to: Source 80% of our coffee through our unique AAA Sustainable QualityTM Program, including Rainforest Alliance certication. Put systems in place to increase our capacity to recycle used capsules to 75%. Reduce the overall carbon footprint required to produce a cup of Nespresso coffee by 20%. Nespresso has surpassed its recycling capacity commitment one year ahead of plan, reaching 76.4% at the end of June 2012.

over

300 boutiques
worldwide