Strong performance by Nestlé in 2008

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+-------------------------------------------------------------------+
| | | Change vs. 2007 |
|--------------+----------+-----------------------------------------|
| CHF Millions | Reported | Reported | Organic | Constant |
| | 2008 | | Growth | Currencies |
|--------------+----------+----------+---------+--------------------|
| Sales | | | | |
|--------------+----------+----------+---------+--------------------|
| Group | 109 908 | + 2.2% | + 8.3% | + 10.0% |
|--------------+----------+----------+---------+--------------------|
| Food & | 102 364 | + 2.1% | + 8.2% | + 9.9% |
| Beverages | | | | |
|--------------+----------+----------+---------+--------------------|
| EBIT margin | | | | |
|--------------+----------+----------+---------+--------------------|
| Group | 14.3% | + 30 bps | | + 50 bps |
|--------------+----------+----------+---------+--------------------|
| Food & | 12.8% | + 20 bps | | + 40 bps |
| Beverages | | | | |
|--------------+----------+----------+---------+--------------------|
| Earnings Per | | | | |
| Share | CHF 4.87 | +75.2% | | |
| Reported | CHF 2.82 | +0.7% | | + 10.9% |
| Underlying | | | | |
+-------------------------------------------------------------------+

All calculations based on non-rounded figures

* Nestlé Group: above target 8.3% organic growth, 2.8% real
internal growth
EBIT of CHF 15.7 billion, EBIT margin 14.3%, up 30 bps, up 50 bps
in constant currencies
* Food and Beverages: 8.2% organic growth, 2.3% real internal
growth
Resilient performance creates momentum for 2009
* Net profit: CHF 18.0 billion (+69.4%), margin +650 bps to 16.4%
Includes profit on disposal of 24.8% of Alcon to Novartis
* Proposed dividend increase of 14.8% to CHF 1.40 per share
Reflects strong performance in 2008 and confidence for 2009
* CHF 25 billion share buyback programme on track: CHF 8.7 billion
repurchased in 2008

Paul Bulcke, CEO of Nestlé: "Nestlé's 2008 performance reflects its
ability to achieve a high level of organic growth together with an
improvement in the EBIT margin, even in difficult times. The Group's
results in 2008 are broad-based, demonstrate its intrinsic strength
and provide momentum into 2009. Nestlé's ability to capitalize on a
wide variety of market conditions across the world remains one of its
decisive competitive advantages. This will enable the Group to seize
growth opportunities worldwide in 2009 by leveraging the company's
growth platforms, particularly nutrition, health and wellness and
popularly positioned products, whilst also accelerating its cost
efficiency initiatives. We believe that the Group will once again be
one of the industry's fastest growing companies in 2009, in line with
the long-standing Nestlé model, and we are committed to achieving
organic growth at least approaching 5%, as well as a further
improvement of the EBIT margin in constant currencies."

Group sales, profitability and financial position

Vevey, 19 February 2009 - In 2008 Nestlé demonstrated its ability to
deliver a solid operating performance in a tough environment, with
above-target organic growth and a 50 basis points EBIT margin
improvement in constant currencies. 2008 was also a year in which the
value of Nestlé's strong balance sheet was proven, enabling the Group
to continue to access the debt markets at advantaged rates whilst
also pursuing its three-year CHF 25 billion share buyback programme.

In 2008, consolidated sales of the Nestlé Group amounted to CHF 109.9
billion, an increase of 2.2% compared to the prior year, driven by
organic growth of 8.3%, including real internal growth of 2.8%.
Acquisitions, net of divestitures, added 1.7% to Group sales. The
currency effect reduced Group sales by 7.8% due to the strength of
the Swiss franc compared to most other currencies. The Group's Food
and Beverages business, with sales of CHF 102.4 billion, was the main
contributor to growth, achieving organic growth of 8.2%, including
real internal growth of 2.3%.

The Group's EBIT grew to CHF 15.7 billion, resulting in an EBIT
margin of 14.3%, up 30 basis points reported, and up 50 basis points
in constant currencies. The EBIT margin for Food and Beverages was up
20 basis points reported, and up 40 basis points in constant
currencies.

Net profit increased by 69.4% to CHF 18.0 billion, resulting in a net
profit margin of 16.4%, up 650 basis points. This includes the CHF
9.2 billion profit on disposal from the sale of 24.8% of Alcon to
Novartis. Total Earnings Per Share grew by 75.2% to CHF 4.87. The
underlying earnings per share increased by 0.7% reported, and by
10.9% in constant currencies.

The Group's cost of goods sold increased by 120 basis points to 43.1%
of sales. This reflects the impact of higher packaging and raw
material costs, partially compensated by operational efficiencies
which contributed over CHF 1 billion of savings. Operational
efficiencies, enabled by GLOBE, incorporate areas such as supply
chain, factories, administrative costs, product line rationalisation
and improved returns on marketing and trade spends.

The main engine of Nestlé's growth is the continuous innovation and
renovation of its products and brands. In 2008, an additional 15% of
Nestlé products were successfully tested for superior nutritional
benefits and taste characteristics over competitors' products.
Innovation was driven by a 15% increase of Nestlé's Research and
Development investment in Food and Beverages. Furthermore, the
Company's commitment to growing its brands is demonstrated by a 7.5%
increase in consumer-facing marketing expenses in constant
currencies. Nestlé brands with annual sales of more than CHF 1
billion ("billionaire brands") accounted for over 70% of Nestlé's
Food and Beverages sales in 2008 and were the main drivers of organic
growth.

The Group's operating cash flow was CHF 10.8 billion, while free cash
flow was CHF 5.0 billion. Cash flow was impacted by the decline in
value of most currencies relative to the Swiss franc, and also a
higher level of inventories as a hedge against the higher cost of
certain raw materials. The Group's net debt decreased to CHF 14.6
billion thanks also to the proceeds from the sale of 24.8% of Alcon,
as well as from cash flow generation. The return on invested capital
(ROIC), including goodwill, was 12.3%; excluding goodwill, it was
22.2%.

Share buyback programme and proposed dividend

The share buyback programme launched in September 2007 is on track
and will be completed, subject to market conditions and strategic
opportunities, within the 36-month period originally planned. In
2008, the Group spent CHF 8.7 billion on buying back its own shares
which brings the total amount spent on repurchased shares to CHF 13.1
billion. In 2009, the Group is giving preference to a dividend
increase, as evidenced by a 14.8% rise in the proposed dividend to
CHF 1.40, and intends to invest around CHF 4 billion in repurchasing
its own shares.

Sales and EBIT margins by management responsibility and geographic
areas

In 2008, the organic growth of Nestlé's total Food and Beverages
business, including globally-managed businesses such as Nestlé
Waters, Nestlé Nutrition, Nespresso, the Food and Beverages joint
ventures, as well as the Zones, amounted to 5.3% in Europe, 8.8% in
the Americas and 13.1% in Asia, Oceania and Africa.

+-------------------------------------------------------------------+
| | 2008 | 2008 | EBIT margins |
|--------------------------| Sales | Organic |-------------------|
| | in CHF | Growth | 2008 | Change vs |
| | millions | (%) | | 2007 |
|--------------------------+----------+---------+-------+-----------|
| Food & Beverages | | | | |
| * Zone Europe | 28 153 | + 5.6 | 12.2% | +20 bps |
|--------------------------+----------+---------+-------+-----------|
| * Zone Americas | 33 134 | + 10.3 | 16.5% | +20 bps |
|--------------------------+----------+---------+-------+-----------|
| * Zone Asia, Oceania, | 17 130 | + 12.2 | 16.5% | +20 bps |
| Africa | | | | |
|--------------------------+----------+---------+-------+-----------|
| Nestlé Waters | 9 589 | -1.6 | 6.0% | -220 bps |
|--------------------------+----------+---------+-------+-----------|
| Nestlé Nutrition | 10 375 | + 7.7 | 17.3% | +10 bps |
|--------------------------+----------+---------+-------+-----------|
| Other Food & Beverages | 3 983 | + 23.5 | 17.5% | +170 bps |
|--------------------------+----------+---------+-------+-----------|
| Total Food & Beverages | 102 364 | + 8.2 | 12.8% | +20 bps |
|--------------------------+----------+---------+-------+-----------|
| Pharma | 7 544 | + 8.8 | 34.1% | +80 bps |
|--------------------------+----------+---------+-------+-----------|
| Group Total | 109 908 | + 8.3 | 14.3% | +30 bps |
+-------------------------------------------------------------------+

All calculations based on non-rounded figures

In all three Zones, EBIT margin improvements were achieved despite
significant packaging and raw material cost pressures in many
categories and despite the strength of the Swiss franc. The key
drivers of this improved performance were faster growth of more
profitable categories and markets in line with Nestlé's nutrition,
health and wellness strategy, operational efficiencies and the
benefits of rationalising underperforming product lines.

Zone Europe: sales of CHF 28.2 billion, 5.6% organic growth and 1.4%
real internal growth. The Zone's EBIT margin increased by 20 basis
points. The Zone experienced double-digit organic growth in Eastern
Europe, and positive organic growth in key Western European markets,
such as France and Great Britain, as well as in the pan-European
PetCare business.

Zone Americas: sales of CHF 33.1 billion, 10.3% organic growth and
2.7% real internal growth. The Zone's EBIT margin increased by 20
basis points. There was high single-digit organic growth in North
America and double-digit growth in Latin America.

Zone Asia, Oceania and Africa: sales of CHF 17.1 billion, 12.2%
organic growth and 3.7% real internal growth. The Zone's EBIT margin
improved by 20 basis points. All the Zone's major emerging markets
continued to achieve double-digit organic growth, with South Asia
doing particularly well. Popularly Positioned Products continued to
achieve an outstanding performance in the Zone with 27.4% organic
growth.

Nestlé Waters: sales of CHF 9.6 billion, -1.6% organic growth and
-3.9% real internal growth. The decline in sales reflects the
continued slowdown of the bottled water category, particularly in
Western Europe and North America. The emerging market businesses
achieved organic growth close to 20%. Despite significant cost
savings, the EBIT margin fell by 220 basis points as the impact of
lower sales was compounded by a significant increase in the business'
two main cost drivers, PET and distribution.

Nestlé Nutrition: sales of CHF 10.4 billion, 7.7% organic growth and
1.8% real internal growth. The EBIT margin improved by 10 basis
points to 17.3%. The successful integration of Gerber and Novartis
Medical Nutrition reinforced Nestlé Nutrition's position as the
global leader in nutrition. Infant Nutrition performed well,
supported by a highly productive innovation and renovation pipeline.
Jenny Craig achieved double-digit organic growth.

Other Food and Beverages: sales of CHF 4.0 billion, 23.5% organic
growth and 20.1% real internal growth. The EBIT margin was up 170
basis points to 17.5%. The three constituents, Nespresso, Cereal
Partners Worldwide and Beverage Partners Worldwide, all performed
well. Nespresso's annual sales exceeded CHF 2 billion for the first
time.

Sales and EBIT margins by product group

+-------------------------------------------------------------------+
| | | 2008 | EBIT margins |
|-------------------------| 2008 Sales | Organic |------------------|
| | in CHF | Growth | | Change |
| | millions | (%) | 2008 | vs |
| | | | | 2007 |
|-------------------------+------------+---------+-------+----------|
| Powdered and liquid | 18 885 | + 12.8 | 22.1% | -30 bps |
| beverages | | | | |
|-------------------------+------------+---------+-------+----------|
| Nestlé Waters | 9 589 | -1.6 | 6.0% | -220 bps |
|-------------------------+------------+---------+-------+----------|
| Milk products and Ice | 20 561 | + 9.2 | 11.5% | +40 bps |
| cream | | | | |
|-------------------------+------------+---------+-------+----------|
| Nestlé Nutrition | 10 375 | + 7.7 | 17.3% | +10 bps |
|-------------------------+------------+---------+-------+----------|
| Prepared dishes and | 18 117 | + 6.1 | 12.8% | -20 bps |
| cooking aids | | | | |
|-------------------------+------------+---------+-------+----------|
| Confectionery | 12 370 | + 8.0 | 13.1% | +150 bps |
|-------------------------+------------+---------+-------+----------|
| PetCare | 12 467 | + 12.1 | 15.7% | +20 bps |
|-------------------------+------------+---------+-------+----------|
| Total Food & Beverages | 102 364 | +8.2 | 12.8% | +20 bps |
|-------------------------+------------+---------+-------+----------|
| Pharmaceutical products | 7 544 | + 8.8 | 34.1% | +80 bps |
|-------------------------+------------+---------+-------+----------|
| Group Total | 109 908 | + 8.3 | 14.3% | +30 bps |
+-------------------------------------------------------------------+

All calculations based on non-rounded figures

Powdered and liquid beverages: sales of CHF 18.9 billion, 12.8%
organic growth and 7.4% real internal growth. The EBIT margin
declined by 30 basis points. This excellent sales performance
confirmed the dynamism of Nestlé's billionaire brands Nescafé, Milo,
Nespresso, Nesquik and Nestea. These brands benefited from a strong
pipeline of nutritionally enhanced products, including new PPP
offerings for lower-income consumers. In Asia and Australia, soluble
coffee benefited from its continuous focus on products with improved
nutritional profiles such as Nescafé Body Partner, Nescafé Protect
and Nescafé Greenblend. The successful roll-out of Nescafé Dolce
Gusto continued and allowed Nestlé to increase its market share in
Europe in the fast-growing portioned coffee segment. Following a
successful launch in Mexico, Nescafé Dolce Gusto was extended to
Japan and the US. Nespresso continued to achieve an outstanding
performance with more than 30% organic growth. The decline in the
product group's EBIT margin reflected increased support for the
accelerating Nescafé Dolce Gusto launch and raw material cost
pressures.

Milk products and Ice cream: sales of CHF 20.6 billion, 9.2% organic
growth and 1.2% real internal growth. The EBIT margin increased by 40
basis points with both milk products and ice cream contributing. The
dairy category benefited from a multi-tier strategy with products
adapted to different affordability levels and nutritional needs,
reflected in the Nestlé Nido Nutrition System. Ice Cream's organic
growth was impacted by the decision to discontinue less profitable
products and distribution routes. The super-premium portfolio with
brands such as Mövenpick of Switzerland and Häagen Dazs performed
well, as did health-focused offerings such as Skinny Cow in the US.

Prepared dishes and cooking aids: sales of CHF 18.1 billion, 6.1%
organic growth and 1.1% real internal growth. The EBIT margin
declined only slightly, by 20 basis points, due to a strong recovery
of the category over the second half of the year, particularly in
frozen food, in spite of cost pressures. Culinary products in Asia
and Eastern Europe achieved double digit organic growth, especially
the Maggi brand. In the US, the three billionaire brands Hot Pockets,
Stouffer's and Lean Cuisine accelerated during the course of the
year. In Europe, the Wagner and Buitoni pizza business continued to
perform well, as did Herta in France due to launches of products with
nutritional advantages.

Confectionery: sales of CHF 12.4 billion, 8.0% organic growth and
1.4% real internal growth. The EBIT margin improved by 150 basis
points reflecting in part the successful reorientation of the
European business. The relaunch of the "Best Ever" KitKat and the
launch of KitKat Senses continued successfully in Western Europe.
These initiatives, as well as a continued strong performance in
emerging markets, resulted in this product category's strong
performance. The category continued to focus on both the lower income
and the premium and super-premium segments. The upmarket move
resulted in the roll out of dark chocolate products and a new range
of chocolates designed by Pierre Marcolini sold exclusively in
Nespresso boutiques in Switzerland and France.

PetCare: sales of CHF 12.5 billion, 12.1% organic growth and 5.2%
real internal growth. The EBIT margin increased by 20 basis points
with a strong second half performance. Strong organic growth was
driven by resilient demand for key premium and super-premium brands
across all Zones which benefited from new product launches such as
Fancy Feast Elegant Medley's, Cat Chow Healthful Life and ONE Natural
Balance.

Pharmaceutical products: sales of CHF 7.5 billion, 8.8% organic
growth and 8.4% real internal growth. This was the result of high
single-digit growth by Alcon and double-digit growth by Galderma and
Laboratoires innéov. The EBIT margin increased by 80 basis points to
34.1%.

Popularly Positioned Products

Nestlé's Popularly Positioned Product (PPP) strategy, one of Nestlé's
four growth platforms and a specific business model which focuses on
lower income consumers by offering them relevant and high-quality
nutritious products at daily-affordable prices, is proving
particularly beneficial in these turbulent economic times. Nestlé's
Food and Beverages business in emerging markets achieved organic
growth of 15% on sales of CHF 35 billion. With an increasing number
of consumers trading down in the current economic environment, PPPs
and other initiatives providing lower-priced products are proving
particularly popular, also in developed countries. PPPs achieved
organic growth of 27% overall, with hundreds of separate initiatives
worldwide.

Nestlé Professional

Nestlé Professional, the company's division dedicated to the
out-of-home food and beverage market, was organised as a globally
managed business unit in 2008 with full profit and loss
responsibility as of 1 January 2009. In 2008, Nestlé Professional
achieved organic growth of 6.1% with sales of CHF 6.2 billion.

Outlook

The global business environment in 2008 was affected by a number of
unforeseen events, especially in the latter part of the year.
Economies around the world have significantly weakened over the last
few months and it is likely that developments could further impact
consumer demand. However, Nestlé believes that it will once again be
one of the industry's fastest growing companies this year, in line
with the long-standing Nestlé model. For 2009, Nestlé is committed to
achieving organic growth at least approaching 5%, as well as a
further improvement of the EBIT margin in constant currencies.

L'Oréal

The conditions of Nestlé's agreement with L'Oréal are public. The
main point of the agreement states that the Bettencourt family and
Nestlé will keep all of their L'Oréal shares until at least 29 April
2009 and not increase their respective stakes in L'Oréal during the
lifetime of Mrs. Liliane Bettencourt and six months after that. This
is a commitment which Nestlé will honour whatever the circumstances.
Consequently, Nestlé does not need to take any action or decision
regarding its stake in L'Oréal next April.

The future of Nestlé's participation in L'Oréal is an important topic
for the Group which the Nestlé Board of Directors is addressing with
great attention in the framework of the Group's global nutrition,
health and wellness strategy. Nestlé's participation in L'Oréal has
been beneficial to both companies for many years and Nestlé will
continue to take a long-term strategic view in shareholders' best
interest.

Appointment to the Executive Board

The Nestlé Board of Directors has appointed Petraea Heynike as
Executive Vice President in charge of Strategic Business Units,
Marketing and Sales, and Nespresso, effective on 1 March 2009. Mrs.
Heynike, currently Head of the Chocolate, Confectionery and Biscuits
Strategic Business Unit and a former Nestlé Canada CEO, has more than
36 years of experience with Nestlé in 6 countries and, over the past
three years, was responsible for the successful reorientation of
Nestlé's confectionery business, giving the category new strategic
direction and delivering strong business results. Her international
experience combined with her deep product, market and communications
expertise make her ideally suited to help define the strategic
direction of Nestlé's different product categories.

Board proposals to the Annual General Meeting

The strong performance in 2008 will enable the Board to propose to
shareholders a dividend increase of 14.8% to CHF 1.40 per share.

The mandate of Professor Günter Blobel, who first joined the Board in
2005, expires in April 2009. The Board wishes to express its
gratitude to Professor Blobel for his highly-appreciated services
over the years. Finally, the Board will propose the individual
re-elections of Ms. Carolina Müller-Möhl as well as Messrs. Kaspar
Villiger and Daniel Borel.

The General Meeting of Nestlé S.A. will take place on 23 April 2009
at 14:30 at the Palais de Beaulieu in Lausanne. The management report
will be available from 12 March 2009, while the fully-audited
financial statements are now posted on the Nestlé corporate website
(www.nestle.com). The dividend will be payable from 29 April 2009.

Contacts Media Robin
Tickle Tel.: +41 (0)21 924
22 00
Investors Roddy
Child-Villiers Tel.: +41 (0)21 924 36
22

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--- End of Message ---

Nestlé S.A.
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