To Press Releases listPetaling Jaya,Apr 24, 2014
KEY HIGHLIGHTS – FINANCIAL YEAR ENDED 31ST DECEMBER 2013
- The Full Year 2013 closes with an annual turnover of RM4.8 billion registering a 5.1% growth from 2012.
- Profit before tax reached RM719.1 million with an underlying margin improvement of 100 bps, while Net Profit stood at RM561.7 million.
- Final dividend of 175 sen per share will be proposed at the AGM.
For the financial year ended 31 December 2013, Nestlé Malaysia registered a turnover of RM4.8 billion, 5.1% higher than the corresponding period last year, on the back of strong growth in domestic sales, spurred by strategic investments in marketing and promotional activities.
Key activities during the year include the Bonanza Hari Keluarga Malaysia promotion, which saw extensive promotions in the print and electronic media, and at point of sales; the MILO Fuel for Champions campaign jointly organised with the Olympic Council of Malaysia; and the activities related to NESCAFÉ’s 75th anniversary celebrations.
The promotions were very encouraging and resulted in higher demand generated in many product categories, with Confectionery, Liquid Drinks, Chilled Dairy and Ice Cream, recording strong double-digit growth.
The Group was also active in renovating and innovating its range of existing products, which included the launch of MAGGI Big Kari. These new products were well received by the market and have helped the Group to further drive the market share growth and continue to strengthen the brands.
The strong growth in domestic sales mitigated the lower export volumes during the year, which was due to softening demand from affiliated companies amidst the challenging global economic environment.
From an input cost perspective, the price trend of commodities consumed by the Group was favourable except for Milk Powders, which was considerably more expensive in the second half. The weaker Ringgit against the US dollar during the second half was partially mitigated by forward hedging positions.
These favourable input cost trends combined with higher domestic sales resulted in a higher Gross Profit Margin, which saw an improvement of 140 bps against the previous 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 RM719.1 million with an underlying margin improvement of 100 bps.
Of significance is the lower net interest incurred in 2013, the result of an efficient working capital management by the Group. Net Profit stood at RM561.7 million with a margin improvement of 60 bps.
In view of the strong top and bottom lines growth in 2013, the Board has recommended a final net dividend of 175 sen per share, giving a total net dividend proposed and declared for the financial year of 235 sen per share, which represents an 11.9% increase from the previous year’s dividend.
OUTLOOK FOR 2014
The positive signs of growth in the developed world, albeit at a moderate pace, provide grounds for optimism in terms of growth opportunities for the Asian economies including Malaysia. For the Group, we intend to fully leverage on the positive developments for both our local and export businesses.
However, we still need to move forward with caution, as the emerging economies are still experiencing some volatility. On the domestic front there is some concern on the rising inflation resulting from the Government’s subsidy rationalization programme, which together with the weaker Ringgit, could have an adverse impact on our business.
The Group will remain focused on growing both top and bottom line while continuing its long term strategy of investing in manufacturing capacity to support its growth. This is reflected by the construction of the Sri Muda factory which is planned to start operations by the fourth quarter of 2014. The Group will also continue to intensify its marketing investments in line with Nestlé's objective of being the leader in Nutrition, Health & Wellness, as well as being an industry benchmark for its financial performance and trusted by all stakeholders.
OUR COMMITMENT TO CREATING SHARED VALUE
For the third consecutive year, Nestlé (Malaysia) Berhad achieved the highest level rating for its 2013 Nestlé in Society: Creating Shared Value Report, which accompanies the Group’s Corporate and Financial reports. The report was externally verified with an A+ GRI rating, reflecting the accuracy and comprehensiveness of our reporting process.
This is in line with Nestlé global standards, and consistent with the Company's commitment to creating shared value for both the company and society at large.