DOMESTIC DEMAND DRIVES NESTLÉ MALAYSIA’S 2013 FIRST HALF PERFORMANCE

To Press Releases listPetaling Jaya,Aug 27, 2013

DOMESTIC DEMAND DRIVES NESTLÉ MALAYSIA’S 2013 FIRST HALF PERFORMANCE
KEY HIGHLIGHTS
  • Turnover of RM2.4 billion in the first half of 2013, up by 5.5% from corresponding period in 2012.
  • Commendable performance driven by strong domestic sales.
  • Operating and Net Profit improvement in both value and margin.
  • Net interim dividend of RM0.60 per share declared.

Nestlé (Malaysia) Berhad today announced its results for the first half ended June 2013, which saw a continuing trend on strong domestic growth.


Review of Performance: Quarter 2, 2013 vs Quarter 2, 2012

For the second quarter ending 30 June 2013, the Group registered a turnover of RM1.2 billion, 5.6% higher than the same period in 2012. This reflects a commendable result for the Group considering the strong growth recorded in the corresponding period in 2012 linked to the 100th year celebration activities.

This quarter’s good performance was largely driven by a robust domestic growth. Continuous investments in marketing and promotional activities as well as effective consumer communications helped several product categories record strong sales. These include fast growing categories such as Confectionery and Liquid Drinks which recorded a double digit growth performance.

On the export front, the demand from affiliate companies was flat in terms of volumes but showed a slight contraction in value. This trend is the result of the global environment which has become more challenging as well as a softening in demand for some export categories.

From an input cost perspective, the price trend of commodities was generally favourable except for Milk Powders. Combined with positive sales mix in the Domestic business, the Gross Profit margin improved by 200 bps. Higher investments in marketing and promotional activities have further strengthened the brands and have positively impacted sales. As a result, the quarter saw an improvement of 160 bps in the Operating Profit margin.

A similar trend was noted for Profit Before Tax which reached RM174.2 million with an underlying margin improvement of 180 bps whilst Profit After Tax stood at RM140.2 million showing a margin improvement of 100 bps.


Review of Performance: Year-to-date, June 2013 vs Year-to-date, June 2012

Leveraging on the positive Malaysian economy and combined with the Group’s strong and well-established brands, sales performance within the domestic market recorded encouraging growth led to the Group registering a turnover of RM2.4 billion for the first half ended 30 June 2013, 5.5% higher than the corresponding period last year.

Several of the Group’s product categories - Confectionery, Liquid Drinks, Food and Chilled Dairy - achieved a robust growth, with good growth performance also seen in the out-of-home category, driven by increased consumer promotions in the second quarter.

In terms of export, the demand from affiliate companies has showed some growth in volume however a slight contraction in value due to unfavourable mix.

From an input cost perspective, except for the upward price trend in milk powders, other major commodities consumed by the Group have shown a more favourable trend. Coupled with a positive product sales mix and internal cost savings initiatives under the umbrella of the Nestle Continuous Excellence program, the gross profit margin improved by 270 bps against the same period last year.

While the Group increased its marketing investments, higher sales volumes and an improved gross profit margin helped profit before tax reach RM417.3 million with an underlying margin improvement of 190 bps. Net profit stood at RM324.7 million and showed a margin improvement of 130 bps.

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For more information, please contact:
Zamira Yasmin Abdul Rahman
Nestlé (Malaysia) Berhad
Tel: (+603) 7965 6212
Email: ZamiraYasmin.AbdulRahman@my.nestle.com

Rose Dahlan / Tunku Putri Nur Asma
WestCoast Communications
Tel: (+603) 7954 4505
Email: rosedahlan@westcoast.my / tputri@westcoast.my