Nestlé Delivers Strong Results for the First Nine Months

KEY HIGHLIGHTS

• Delivered an improved Turnover of RM4.2 billion, increased by 4.8%.
• Profit After Tax rose by RM23.9 million, from RM511 million to RM535 million.
• These results were driven by strong performance of key brands & innovations as well as improved consumer sentiment.
• The Board declared a second interim dividend of RM0.70 per share.

Nestlé (Malaysia) Berhad once again delivered solid results, with improved top and bottom line performance for the first nine months of its financial year ended 30 September 2018.

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

For its first nine months, the Group registered a turnover of RM4.2 billion, 4.8% higher compared to last year’s corresponding period. These results were driven by improved consumer sentiment as well as successful innovation and renovation efforts.

Mr Alois Hofbauer, Chief Executive Officer of Nestlé (Malaysia) Berhad, said, “We are pleased to have once again delivered solid results for the third quarter and first nine months on the back of the strong performance of key brands, as well as the successful transition to our new Nestlé Distribution Centre.”

“Over the past nine months, a range of successful product innovations have contributed to our Group’s overall turnover. In particular, our MAGGI Noodles range saw especially good growth, which was mainly contributed by the launch of the Pedas Giler variety. We also excited Malaysians with other innovative product launches such as Nestlé Tropicana Lychee Yogurt Flavour Ice Cream, MILO 3-in-1 Less Sugar and NESCAFÉ Cold Brew,” he added.

The turnover growth combined with an improved margin led to an increase in Gross Profit from RM1.48 billion to RM1.61 billion, reflecting a 8.6% jump. Operating Profit was also up by 7.7% from RM673 million to RM725 million. These strong results were achieved despite the one-off expenses incurred due to the relocation of Nestlé’s new National Distribution Centre (NDC) in the second quarter. Profit After Tax rose by RM23.9 million, from RM511 million to RM535 million.

In line with the Group’s continuous commitment to enhance shareholder value, the Board declared a second interim dividend of RM0.70 per share for the financial year ending 31 December 2018.

Review of performance: Quarter 3, 2018 vs Quarter 3, 2017

For the third quarter ended 30 September 2018, the Group’s revenue increased by 8.3%, from RM1.32 billion to RM1.43 billion compared to Q3 2017. This growth was driven by strong domestic and export sales. The 0% GST implementation from June to August 2018 led to higher demand and helped support stronger sales. The Group also benefitted from the successful move and transition to the new NDC in late Quarter 2 fully completed in July.

The higher turnover coupled with an improved margin contributed to an additional Gross Profit of almost RM100 million. The Group’s continuous drive for efficiency increases along the supply chain as well as favourable prices in major raw materials led to this margin improvement.

The Group intensified its investment into marketing and promotional activities, which supported higher sales, and this was reflected by the higher operational expenses incurred in the quarter. As a result, Profit Before Tax increased by 29.4% from RM144.3 million to RM186.7 million, while Profit After Tax improved from RM119.0 million to RM137.7 million.

Prospects

Mr Hofbauer said, “Against the backdrop of an encouraging year for the Malaysian economy, we are confident that our investments, including the new NDC and the planned establishment of our global MILO Manufacturing Centre of Excellence in Chembong in Negeri Sembilan, will enable us to maintain our strong, sustainable and profitable growth momentum.”

“We will continue to provide Malaysians with tasty, nutritious and high-quality offerings at affordable value, driven by our purpose of enhancing quality of life and contributing to a healthier future. Moving forward, we remain focused on proactive cost management and ongoing efficiency enhancements across our value chain,” he concluded.

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

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