DOMESTIC DEMAND DRIVES NESTLÉ MALAYSIA’S FIRST NINE MONTHS PERFORMANCE

To Press Releases listPetaling Jaya,Nov 7, 2013

DOMESTIC DEMAND DRIVES NESTLÉ MALAYSIA’S 2013 FIRST HALF PERFORMANCE
KEY HIGHLIGHTS
  • Turnover up by 5.6% from corresponding period in 2012 to RM3.6 billion in the first nine months of 2013.
  • Robust growth in several of the product categories with Confectionery, Liquid Drinks, Food and Beverage performing strongly.
  • Operating and Net Profit improve in both value and margin.

Nestlé (Malaysia) Berhad today announced its results for the first nine months of 2013, which saw a continuing trend of strong domestic growth.


Review of Performance: Quarter 3, 2013 vs Quarter 3, 2012

For the third quarter ending 30 Sept 2013, the Group registered a turnover of RM1.2 billion, 5.7% higher than the same period last year.

The Group continued its investment in marketing and promotional activities and launched a nationwide campaign in September - Nestlé Malaysia Family Day Bonanza. The campaign was successful with many categories recording good incremental sales which contributed to a strong Domestic performance for the quarter.

On the export front, however, slow demand from affiliate companies affected the performance, which was a result of the uncertainties in the global economic environment compounded by logistical issues experienced in the later part of the quarter.

From an input cost perspective, the price trend of commodities consumed by the Group was favourable except for Milk Powders, which has been on an increasing trend.

Meanwhile, the weakening of the Ringgit against the US Dollar was partially mitigated by forward hedging positions. Combined with a good turnover growth, especially in the Domestic business, the Gross Profit margin improved by 120 bps.

Higher investment in marketing and promotional activities in the quarter coupled with expenses related to the construction of the Sri Muda Factory in Shah Alam, Selangor have impacted the Operating Profit which increased in value but showed a slight decline in margin.

Profit Before Tax at RM177.3 million was 1.9% higher than the previous corresponding period in 2012, while Profit After Tax stood at RM136.6 million, 7.3% higher than previous year with an underlying margin improvement of 20bps.


Review of Performance: Year-to-date Sept, 2013 vs Year-to-date Sept, 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 RM3.6 billion for the first nine months of 2013, 5.6% higher than the corresponding period last year. Several of the Group’s product categories - Confectionery, Liquid Drinks, Food and Beverage achieved a robust growth.

Exports on the other hand experienced a lower demand from affiliate companies, which affected the growth for some of the categories. This unfavourable trend is a result of the uncertainties in the global economic environment.

From an input cost perspective, the price trend of commodities consumed by the Group was generally favourable except for Milk Powders which has been on an increasing trend this year. The weakening of the Ringgit against the US Dollar in the third quarter, was partially mitigated by forward hedging positions. Favourable input cost trends combined with higher sales resulted in a higher Gross Profit margin, which improved by 220bps against the same period last year.

While the Group's operating expenses were higher, mostly driven by investments in marketing and promotional activities, the increased sales volumes and an improved gross profit margin helped Profit Before Tax reach RM594.6 million with an underlying margin improvement of 110bps. Net profit stood at RM461.2 million and reflecting a margin improvement of 90bps.

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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