Nestlé Continues to Deliver Good Growth for First Half Despite Headwinds

Product Innovation a Key Growth Driver

To Press Releases listPETALING JAYA,Aug 21, 2017

KEY HIGHLIGHTS

  • Continues delivering good growth of 4.1% in the first half of 2017, with good growth domestically and in export businesses.
  • Domestic sales driven by effective marketing and trade promotions, and impactful product innovations.
  • Sustained Operating Profit at RM519 million in the first half of 2017, despite external headwinds. This was contributed by improved efficiencies, diligent cost management and strategic marketing investments.
  • Declared net interim dividend of RM0.70 per share.

PETALING JAYA, August 21, 2017 - Nestlé (Malaysia) Berhad continued to deliver solid growth despite external headwinds for the first six months of its financial year ended 30 June 2017.

Review of performance: Year-to-date, 2017 vs Year-to-date, 2016
For its first half ended 30 June 2017, the Group recorded a Turnover of RM2.7 billion, reflecting a 4.1% increase from the previous year’s corresponding period.

Mr Alois Hofbauer, Chief Executive Officer of Nestlé (Malaysia) Berhad, said, “It was a tough market environment for first half and we weathered challenging external headwinds. In spite of this, the Group remained resilient and continued to deliver good growth. Our solid foundation and strong innovative drive are key success factors, as demonstrated by growth in our domestic and export businesses.”

“Innovation remains a key growth driver for Nestlé. We successfully launched new products in the first half of 2017, such as MAGGI Hot Mealz, MILO ‘KAW’ for the Kuala Lumpur 2017 SEA Games, KIT KAT Mini and MAT KOOL Panda Ice Cream. Coupled with effective marketing and trade promotions, this helped to propel domestic sales growth.”

The Group maintained a solid profit situation despite the challenging market, registering higher Operating Profit for the six month period at RM519 million, an improvement over the previous years’ corresponding period. Internal efficiency increases, diligent cost management and strategic marketing investments were key in helping to offset the impact of higher raw material prices. Owing to the higher effective tax rate, the net profit stood at RM393 million, a slight decline over the same period last year.

Reflecting the Group’s commitment to enhancing shareholder value, the Board declared a net interim dividend of RM0.70 per share for the financial year ending 31 December 2017.

Review of performance: Quarter 2, 2017 vs Quarter 2, 2016
The Group posted a Turnover of RM1.28 billion for its second quarter ended 30 June 2017. This marks a 3.8% increase from RM1.24 billion in the same quarter last year.

According to Mr Hofbauer, “Our effective marketing and trade activities during the festivities for Raya enabled us to achieve good growth for the quarter under review. Our export business also contributed to these positive results.”

Despite higher prices of major raw materials such as milk powder and coffee beans, as well as a weaker Ringgit for the first half of the year, the Group registered a solid Operating Profit of RM221 million. This was contributed by proactive cost management and strategic phasing of marketing investments.

Prospects
Mr Hofbauer added, “In the second half of the year, we expect headwinds especially from raw material prices to continue. However, we are confident that our innovative drive will enable us to maintain a solid growth momentum.”

“Our balanced approach of proactive cost management and continuous efficiency enhancements across our supply chain will allow us to achieve sustainable and profitable growth moving forward,” he said.

“The South-East Asian region is a core growth driver for the Company, and Malaysia in particular is a key market for Nestlé. We are confident that with our strong foundation, we are well-prepared to tap on the vast potential of this country, and continue nourishing Malaysians for generations to come. This is in line with our purpose of enhancing quality of life and contributing to a healthier future,” concluded Mr Hofbauer.

About Nestlé Malaysia
Nestlé is the world’s largest food and beverage manufacturer. Headquartered in Switzerland, Nestlé is present in 189 countries around the world, and our 328,000 employees are committed to Nestlé’s purpose of enhancing quality of life and contributing to a healthier future. Our performance is driven by our Nutrition, Health and Wellness strategy. Since 1912, we have been nourishing Malaysians through our quality brands and products, whilst maintaining our Halal excellence and integrity. This is in line with our promise of delivering GOOD FOOD, GOOD LIFE to all. To learn more about how we have been nourishing Malaysians for over a century, do www.nestle.com.my or our Facebook page at http://www.facebook.com/NestleMalaysia



For more information, please contact:

Maxine Lim
Nestlé (Malaysia) Berhad
Tel: (+603) 7965 6650
Mobile: +6012-353 1337
Email: Maxine.Lim@my.nestle.com

Joanne Lim or Yasmin Kadir
acorn communications
Tel: (+603) 7958 8348
Mobile: +6012-304 7604 (Joanne) or +6017-237 9048 (Yasmin)
Email: acorncommunications@acornco.com.my




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