Message to Shareholders

Navigating Challenges with Purpose 
Malaysia’s economy recorded a growth of 5.1% for the year, on the back of domestic demand and a rebound in exports. Dynamic labour market conditions, alongside increased investment activity from both the private and public sectors and a progressive improvement in household spending supported an overall solid macroeconomic environment. However, for the FMCG sector, 2024 proved to be quite challenging as inflationary pressures, fluctuating commodity prices and intense market competition remained key factors influencing consumer purchasing decisions. Even more significantly, the defining feature of the year was the pressure on international brands, driven by perceptions surrounding regional conflicts fuelled through social media. 

In the context of these complex market dynamics, we stayed agile and consumer-focused, ensuring that our diverse portfolio continued to deliver value by staying accessible, relevant and competitive. We also dedicated additional efforts and resources to reignite and strengthen the deep bonds we have built with all Malaysians over our 112 years of presence in the nation. As extensive endeavours and investments were deployed to protect the fundamental value proposition of Nestlé products across brands and segments, we further strengthened our initiatives that generate positive societal impact. Through our widespread ESG agenda and programmes, we continued to positively contribute, once again, to the betterment of local communities, environmental sustainability and society at large, in line with our CSV approach, which remains as relevant as ever. 

Driving Positive Impacts for Rural and Underserved Communities
In 2024, Nestlé Malaysia continued to engage directly or in partnership with trusted organisations such as the Malaysian Red Crescent or the Food Bank, to provide immediate relief to distressed communities (for example, in the states impacted by floods), support the betterment of rural communities through our Farmer Connect programmes and directly fund associations focused on improving the lives of communities or sectors of society in need of support. The Salary for Life campaign was another key example of combining an exciting consumer campaign with funds channelled to deserving NGOs addressing pressing societal needs. Likewise, we stand very proud of MILO’s initiative to support the entire Malaysian Olympic and Paralympic teams with a monetary donation to support them on their journey to best represent Malaysia in international competitions. Last but not least, amongst many other initiatives, the launch of MILO “Tenaga Untuk Kebaikan” (Energy for Good) constitutes an ideal example of how to bring together environmental awareness with an improved learning environment in schools in underprivileged areas through the supply of furniture and sports equipment made from recycled packaging materials.

Progress in Decarbonisation and the Fight against Plastic Waste
Environmental Sustainability is at the heart of our responsible approach to business growth, ensuring that we continue delivering high-quality products that are made in Malaysia, by Malaysians, for Malaysians, while upholding the highest standards in nutrition, food safety and Halal integrity. These core pillars define our promise to consumers, and we remain committed to reducing the carbon and plastic footprint derived from our operations.

At the end of 2023, we had already delivered on our original commitment to cut the total emissions by 25% by 2025 against the 2018 baseline, hence two years ahead of schedule. In 2024, we have further exceeded this milestone as the cumulated reduction has reached 39%, with most of the progress being attributed to our holistic programmes to act on Scope 1, 2 and 3 emissions, while some of it is also attributable to the decline of sales in the year under review. Nevertheless, we are fully on track to achieve a 50% reduction in our total emissions by 2030.

The main levers of this progress continue to be our intensive efforts to reduce the environmental impact of the agricultural ingredients needed to produce our products. These efforts led at the global level and in Malaysia, focus on all locally-sourced materials, including those from our Farmers Connect programmes centred on rice, chilli, coffee and as of 2024, also on cocoa beans. Indeed, the launch of KIT KAT Dark Borneo using locally-sourced cocoa beans from Sabah and Sarawak through the Nestlé Borneo Cocoa Initiative is a great example of creating business growth opportunities while supporting the livelihoods of local farming communities alongside contributing to the nation’s food security.

Regarding Scope 1 and 2 emissions, it is also worth mentioning recent developments such as the installation of a biomass boiler in our Chembong factory and the pilot project involving the use of EV Trucks for transporting some of our key raw materials.

We also remain actively engaged in reforestation efforts through Project RELeaf, having 2.1 million trees planted as of 2024, and now on track to achieving 3 million trees by 2025. Beyond its environmental benefits, the project also serves as a source of activity and revenue creation for numerous families in remote rural communities through the planting and care of seedlings.

During the year, we expanded our pipeline of sustainable packaging solutions, further reducing usage of virgin plastic and plastic packaging. With the transition to paper-based packaging for MILO UHT’s 200ml cluster packs and paper bowls for our MAGGI Bowl products, along with other eco-friendly packaging innovations, we are one step closer to achieving full recyclability. Additionally, we have already, reduced our total virgin plastic usage by one third compared to 2018.

Complementing these efforts, our flagship Project SAVE plays a crucial role in plastic circularity by diverting waste from landfills and fostering a culture of recycling in local communities through its voluntary Extended Producer Responsibility (EPR) initiatives. This includes the Door-to-Door Collection & Recycling Programme, which has reached close to 200,000 households in 2024 and collected over 20,000 tonnes of waste since its inception in 2020. With its expansion to Penang during the year, the programme is laying the foundation for greater nationwide impact, supporting the transition towards a circular economy.

Financial Performance
Nestlé Malaysia demonstrated resilience in 2024 in the face of economic challenges and market pressures, delivering sales totalling RM6.2 billion. While this reflected an 11.7% decline from 2023’s historically high sales, our solid fundamentals and long-term strategy has kept us on course. Export growth remained strong, reflecting our position as a key Halal hub within the global Nestlé network. Additionally, we have completed the RM1 billion three-year commitment announced in 2021, confirming the confidence of the Nestlé Group globally to continue investing in Malaysia for the long run.

Dividends 
In line with our focus on delivering shareholder value, the Board declared a third interim dividend of RM0.74 per share for the financial year ended 31 December 2024. This brings total dividends for the year to RM1.79 per share. Our dividend policy is rooted in balancing shareholder returns with prudent reinvestment to fuel business growth, ensuring the long-term sustainability of this policy.

Corporate Governance 
We uphold the highest standards of corporate governance, compliance and accountability, reinforced by a robust risk management framework to navigate evolving market dynamics while safeguarding shareholder interests. In recognition of our commitment to these principles, we were honoured to be ranked among the Top 50 in the Excellence Award category at the National Corporate Governance & Sustainability Awards 2024.

Ensuring that our business decisions support long-term environmental and social priorities while delivering sustainable value to stakeholders, we integrate corporate governance initiatives with ESG principles and climate-related risk considerations.

As part of our commitment to strong leadership, during the year under review, the Board welcomed Tan Sri Wan Zulkiflee Wan Ariffin as its new Chairman to further enhance our governance framework. This followed the retirement of YAM Tan Sri Dato’ Seri Syed Anwar Jamalullail, to whom we remain recognisant of his extraordinary contributions throughout his 12-year tenure.

Awards 
Our dedication to sustainability, industry leadership and brand excellence was reaffirmed through multiple prestigious accolades in 2024. We were honoured to win Silver in Waste Management at The Star ESG Positive Impact Awards for our KITAR Recycling Programme. As a preferred employer, Nestlé Malaysia was also named the No. 1 FMCG employer at the Graduates’ Choice Award, alongside maintaining our top position in Malaysia’s 100 Leading Graduate Employer Award for the 12th year. Additionally, MILO was recognised as the Most Chosen Beverage Brand in Malaysia, while MAGGI remained the No. 1 FMCG brand for the 12th consecutive year in the Kantar Asia Brand Footprint Report, reinforcing the trust that Malaysians place in our household brands.

Outlook
The global economy is poised for moderate growth in 2025, with the International Monetary Fund projecting a 3.3% expansion. Easing inflation and more stable financial conditions should support this, though geopolitical uncertainties and aggravating trade tensions remain key downside risks. Meanwhile, Malaysia’s economy is forecasted to grow between 4.5% and 5.5%, driven by domestic demand, continued investment and a stable labour market. While inflationary pressures may persist due to potential subsidy adjustments, the country’s economic outlook remains positive, fostering some optimism for the year ahead.

Against this backdrop, we are committed and confident to deliver on our ambition to return to healthy growth levels in 2025, building on the fundamentals of our responsible and sustainable growth strategies, rooted in leading market positions across most of the product segments in which we operate. Our deep-rooted presence and strong fundamentals empower us to navigate challenges while continuously innovating to meet the evolving needs of consumers. Through our diverse portfolio of nutritious, high-quality Halal-certified products, we are dedicated to enriching lives and contributing to the wellbeing of Malaysians. Alongside this, we will continue to invest in local manufacturing, create employment opportunities and implement sustainability initiatives.

As we forge ahead, we do so with immense gratitude to Malaysians, our Nestlé Malaysia family and our valued partners across the value chain. Their trust and support inspire us to strive for excellence in all that we do and build a future that is rooted in shared progress. Together, we look forward to shaping another year of positive impact for society and the planet, while rewarding the trust of our shareholders and all other stakeholders.