Nestlé Nespresso SA

Results 2006 - Nestlé Nespresso positioned to double its business by 2010

Company Emphasizes Quality and Customers as Key to Global Expansion

    Paudex (ots) - Fulfilling CEO Gerhard Berssenbrügge's forecast for the Company, Nestlé Nespresso SA, the worldwide leader in highest quality perfectly portioned coffee, surpassed 1 billion CHF in revenue for the first time in 2006. This achievement marked the sixth consecutive year that Nestlé Nespresso enjoyed sales growth rates above 30 %, making it the fastest growing business in the Nestlé group and the latest addition to its set of "billionaire brands".  As a result, Nestlé Nespresso is on target to achieve 2 billion CHF in revenue by 2010 and poised to fulfill its ambition of becoming the Icon for Perfect Coffee Worldwide.     2006 marked a number of significant performance milestones for Nestlé Nespresso, indicating that the Company will continue to deliver vigorous growth in all areas of the business:

    - Overall sales growth of 42%, to 1.16 billion CHF, up from 819 million CHF in 2005 - a Nespresso record above its sales target of 1. billion CHF.

    - The number of coffee machines sold in retail distribution outlets increased by 32% to over 1 million, thereby expanding Nestlé Nespresso's global leadership position in the espresso machine market with an increase of 4.8% points to 22.7%.

    - Over 1.1 million new Club Members were acquired in 2006, compared to 770,000 in 2005, bringing the total number worldwide to more than 3.1 million.  

    "The Nespresso trilogy of highest quality Grand Cru coffees, smart and stylish machines and exclusive customer services has been the key to our success," said Gerhard Berssenbrügge, CEO of Nestlé Nespresso. "Moving forward, our commitment to highest quality will continue to be the Company's cornerstone for achieving successful, sustainable growth on a global level. We will demonstrate this through our customer-focused business model, our constant innovation and our strategic entry plan into new markets."

    Setting the foundation for its vision, Nestlé Nespresso has explored new ways to exceed the expectations of a growing number of coffee connoisseurs in 2006, while expanding brand visibility on a global scale:

    - Opening 39 Nespresso Boutiques, Boutique Bars and Boutiques-in-Shops, which brought the world wide total to 79. Highlights include a flagship location on New York's Madison Avenue, plus for the first time, a Nespresso presence in Central Europe and South America.  

    - Introducing George Clooney as the first official Nespresso ambassador resulted in a widely successful premiere celebrity campaign.

    - Launching the Nespresso Siemens Essenza, Le Cube and the Siemens by Porsche Design machines offered customers a complete range of functionality, design and price points.

    - Concluding its third year of successful collaboration with the Rainforest Alliance non-governmental organization on the Nespresso AAA Sustainable Quality™ Coffee Program, which ensures farming practices that lead to the highest quality beans and economic viability, whilst contributing to the well being of farmers and their communities.  As a result, Nespresso was able to grow its share of green coffee sourced from the Program by 10 percentage points to 30%.

    Strategic Direction for Nespresso is Validated     Nestlé Nespresso pioneered the portioned coffee market in 1986, paving the path for what would become a worldwide trend.  According to AC Neilsen Europe & North America, the segment share of portioned coffee in 2006 is still only at 3% by volume and 7% by value of worldwide coffee consumption, which provides great potential for future Nespresso business development plans. In fact, the Company expects that the share of portioned coffee worldwide will double by 2010, the same year Nestlé Nespresso is positioned to achieve 2 billion CHF in revenue. This would complete Phase IV of the Nespresso Global Expansion Plan, which the Company began in 2006.

    "Despite increased competition, I am confident that our 20 years of experience as the only super premium brand in the portioned coffee category gives us valuable knowledge to draw on," said Berssenbrügge. "The fundamentals of our strategy have been proved right by our excellent performance in 2006. Our expansion plan is aggressive, but sustainable, and I am confident that Nestlé Nespresso will achieve its next important milestone of 2 billion CHF in 2010."

    2007 in Prospect

    To fulfill its three-year revenue objective, as well as its strategic vision of becoming the Icon for Perfect Coffee Worldwide, Nestlé Nespresso set the following critical business targets for 2007:

    - Maintain highest quality in all elements of the Nespresso value chain. This year, it will break the ground for a new state-of-the-art Production and Distribution Centre in Avenches, Switzerland, investing 150 million CHF to underpin global growth with consistent Swiss quality;

    - Continue its successful Nespresso AAA Sustainable Quality™ Coffee Program, which will see an increase in coffee from this source, from 30% in 2006 to a target of 50% in 2010;          - Place additional focus on the business-to-business area to allow more customers the opportunity to enjoy the Nespresso Ultimate Coffee Experience wherever they are - at work, traveling or at leisure in high-end restaurants, luxury hotels and boutiques, offices, or when flying first class;

    - Open more than 40 new Nespresso Boutiques, Boutique Bars and Boutiques-in- Shop, to take the total to 120 locations:

    -  Including the first Boutique Bars in new markets, such as
         Singapore, Shanghai, Beijing, and Dubai where the role of the
         Boutique Bar as a brand exemplar will signal a new approach to
         market entry;

    - Including further expansion with a global flagship location on
        the Champs Élysées, which with a size of 1'500 m2 will bring a  
        new dimension to the brand that promises to engage and delight
        customers.

    - Introduce the new Nespresso Lattissima one-touch milk froth
        machine in cooperation with De'Longhi to satisfy consumer demand
        for espresso based fresh milk beverages.

    "Nespresso delivers coffee aficionados around the world excellence in every cup, every time," claimed Berssenbrügge. "We will do the utmost to ensure that our trilogy of Grand Cru coffees, innovative machines and second-to-none customer service meets and exceeds our customers' expectations as we commit to double our business by 2010."

    About Nestlé Nespresso SA

    Nestlé Nespresso SA, the worldwide pioneer and market leader in premium portioned coffee, introduced consumers to the very highest quality Grand Crus to be enjoyed in the comfort of their' own homes, as well as to be savoured at locations outside the home, such as luxury restaurants, cafes, hotels and offices. What transpired was the creation of the unique Nespresso trilogy, a unique combination of the world's highest-quality Grand Cru coffees, smart and stylish coffee machines and second-to-none customer service. The culmination of these three elements came to be known as the Nespresso Ultimate Coffee Experience. Headquartered in Paudex, Switzerland with more than 1,700 employees, Nestlé Nespresso SA sells products in more than 50 countries directly to its customers and currently operates more than 79 prestigious boutiques in key cities around the world.  In 2006, it became the fastest growing company within the Nestlé Group and one of its "billionaire brands", having achieved a growth rate of 42 percent and 1.16 billion CHF in revenue. For more information, visit www.nespresso.com and www.nespresso-pro.com.

ots Originaltext: Nestlé Nespresso SA
Internet: www.presseportal.ch

Contact:
Hans-Joachim Richter
Director Corporate Communications
Nestlé Nespresso SA
Phone:  +41/21/796'96'96
E-Mail: Hans-Joachim.Richter@nespresso.com

Christine Saunders, Weber Shandwick
Phone:  +41/43/255'19'31
E-Mail: csaunders@webershandwick.com



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