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Nestlé Closes FY2018 On A High Note

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Petaling Jaya,
Mon, 02/25/2019 - 13:00

KEY HIGHLIGHTS

  • Delivered higher revenue of RM5.5 billion, up by 4.9% from the previous year.
  • This was supported by strong growth in both the export and domestic businesses, with domestic performance driven by successful product innovations and renovations.
  • Profit Before Tax increased by 7.8% from RM812 million to RM876 million. Tax Expenses increased due to cessation of tax incentives, reflecting an impact on Profit After Tax.
  • Proposed final dividend of RM1.40 per share, bringing total dividends for the year to RM2.80 per share.

Nestlé (Malaysia) Berhad closed the year with improved results, recording strong top and bottom line growth for the financial year ended 31 December 2018.

Review of performance: Year-to-date, 2018 vs Year-to-date, 2017

The Group registered a turnover of RM5.5 billion, an increase of 4.9% compared with the previous year. These positive results were achieved on the back of strong growth in both the domestic and export businesses.

Mr Juan Aranols, Chief Executive Officer of Nestlé (Malaysia) Berhad, said, “We are pleased to deliver another year of good growth, propelled by our domestic business and export activities. Improved internal efficiencies and favourable prices for key commodities contributed to the Group’s strong profitability in 2018.”

“During the year, we continued to drive marketing and trade investments to reinforce the competitive position of our products on the shelf and heighten awareness and endorsement of our brands by consumers. We also leveraged opportunities offered by the digital and eCommerce landscape, to explore new avenues to deepen engagement with consumers.”

The domestic performance was supported by improved consumer sentiment as well as successful product innovations and renovations, in line with the Group’s commitment to cater to evolving consumer preferences. This was led by the MAGGI Noodles range which saw strong growth, also contributed by the launch of its Pedas Giler variety. Other innovative product launches included MILO 3-in-1 Less Sugar and NESCAFÉ Cold Brew, as well as new ice cream variants such as OREO Ice Cream and Nestlé Tropicana Lychee Yogurt Flavour.

The growth in turnover combined with improved margins led to a higher Gross Profit of RM2.14 billion, a 9.6% jump from RM1.95 billion in the previous year. Operating Profit also rose by 7.9% from RM847 million to RM915 million. This was achieved due to favourable material prices and the Group’s continuous efforts to improve efficiencies along the value chain. The Group also recorded a one-off gain of RM9.4 million as a result of the divestment of its Chilled Dairy business. This saw Profit After Tax grow to RM659 million, up by RM16 million from RM643 million in the previous year.

In light of this strong performance, the Board of Directors proposed a final dividend of RM1.40 per share for the financial year ended 31 December 2018. Including the interim dividends paid, this will bring total dividends for the year to RM2.80 per share.

Review of performance: Quarter 4, 2018 vs Quarter 4, 2017

For its fourth quarter ended 31 December 2018, the Group recorded a higher turnover of RM1.35 billion, reflecting a 5.2% increase compared with RM1.28 billion in Q4 2017. This solid growth momentum was supported by strong export sales which expanded by 11.9%. Domestic sales also grew steadily at 3.1%, driven by continuous product innovation and renovation efforts coupled with successful trade and marketing promotions.

The higher turnover coupled with better margins contributed to a Gross Profit of RM527 million, an increase from RM468 million in Q4 2017. Margin improvement was driven by favourable price trends in major raw materials as well as the Group’s dedicated efficiency enhancements across the supply chain. Along with the one-off gain due to the divestment of the Chilled Dairy business, Profit Before Tax increased by 12.5% from RM160 million to RM180 million.

Prospects

Mr Aranols said, “We are confident in our ability to deliver another good year of results in 2019. We see strong demand for our brands in Malaysia and we have strong plans in place to continue generating sustainable and profitable growth. At the same time, we acknowledge some pressures from higher commodity prices and more volatile demand in our main export markets.”

“Moving forward, we look forward to continue to work closely with all our employees, customers, suppliers, business partners and shareholders to capture all opportunities and mitigate any challenges. Their support builds our confidence to continue growing stronger together.”



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 visit 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
Email: [email protected]

Kanjana Ilango or Yasmin Kadir
acorn communications
Tel: (+603) 7958 8348
Email: [email protected]


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