Solid Q4 performance, driven both by local sales and exports
KEY HIGHLIGHTS
- Full Year Turnover at RM5.4 billion reflects improved momentum through the year in a very challenging environment.
- Q4 Turnover grew by 3.1% to RM1.37 billion driven by both local consumption and exports.
- Q4 PAT improved to RM132.5 million, in spite of ongoing higher expenses linked to COVID-19 containment efforts.
- Full-year costs for COVID-19 safety and preventive measures to enhance workforce safety and operational continuity, reached RM62 million.
- Third interim dividend of RM0.92 per share declared, cumulating to RM2.32 per share for the financial year, in spite of external challenges throughout the year.
Petaling Jaya, February 23, 2021 - Nestlé (Malaysia) Berhad delivered another year of resilient results, with a Turnover of RM5.4 billion for the financial year ended 31 December 2020. The Group’s momentum improved in the final quarter of the year, with solid topline and bottomline growth versus the same period of 2019. These results were driven by robust in-home consumption, export recovery and some improvement in OOH channels following more open operating conditions during the Recovery Movement Control Order (RMCO) period.
Review of performance: Quarter 4, 2020 vs Quarter 4, 2019
The Group recorded a Turnover of RM1.37 billion for the fourth quarter, reflecting a 3.1% increase from Q4 2019. The core food and beverage business continued to be a key contributor, recording a 6% growth driven by strong in-home consumption. The export business also registered good growth. Further contributing to the Group’s performance, sales in OOH channels trended better as restrictions eased in the second half of the year under the Recovery MCO, although still well below pre-COVID levels.
Mr Juan Aranols, Chief Executive Officer of Nestlé Malaysia Berhad said, “The better quarterly results are a credit to our teams’ tireless efforts in driving growth opportunities across all brands and channels in a challenging context (especially in OOH channels) and an extremely competitive environment. Our brands have continued to gain consumers’ endorsement thanks to solid brand plans, exciting innovations and strong sales execution.”
The accelerated roll-out of product innovations was also a key growth driver during the quarter. In addition to the innovations introduced in prior quarters, new products further reinforced the portfolio, including MILO Nutri Breakfast, new formats of MAGGI Chilli Sauce, and the introduction of KIT KAT GOLD, in both Ice Cream and Confectionery versions. A highlight of the quarter was the launch of NESCAFÉ Classic Kopi Kedah, the first-ever NESCAFÉ made with 100% Malaysian-grown coffee beans.
The Group registered a Profit Before Tax (PBT) of RM167.4 million, closing the gap on 2019 vs previous three reported quarters. This was primarily due to the impacted OOH channels, as well as higher operational expenses to protect the safety of all employees at work and ensure operational continuity, including a massive COVID-19 antigen screening programme critical to keep all employees safe and ensure operational continuity. Nevertheless, the Group recorded a Profit After Tax (PAT) of RM132.5 million, marginally higher vs. the same quarter last year.
“Since the start of the COVID pandemic, our foremost priority was to protect the safety of all our employees, regardless of cost implications. As an example, our mass testing programme which started in October 2020 has seen over 140,000 tests performed to date, with a cumulated cost of several million Ringgit. The fight against the virus requires us to remain humble and continue to be very proactive and disciplined in the application of all SOPs and containment measures. We have also delivered on our commitment to protect jobs and employment, having managed to avoid any workforce restructuring in 2020 in spite of the significant cost pressures we have had to absorb.”
In line with the Group’s commitment to deliver resilient and sustainable value to its shareholders, the Board of Directors declared a third interim dividend of RM0.92 per share for the financial year ended 31 December 2020. This will bring total dividends for the year to RM2.32 per share: a solid dividend pay-out, despite the volatile climate of 2020.
Review of performance: Full-Year 2020 vs Full-Year 2019
For the full year, the Group’s Turnover stood at RM5.41 billion, with the pandemic impact concentrated in the first half of the year and compounding the challenge of the very early Chinese New Year in 2020. The second half of the year saw instead a progressive recovery of both local sales and exports as the pandemic’s worst impacts started to recede.
The Group’s core F&B business recorded sales growth of 2.3% for the year, building on very solid sales execution and engaging brand campaigns that helped to lift the spirits of Malaysians in a very challenging context. This included the successful Nestlé Salary For Life Contest, the MILO 70 Years celebrations, the MAGGI Confirm Malaysia campaign and the activities behind our coffee brands, including the expansion of the STARBUCKS at HOME range and the launch of NESCAFÉ Kopi Kedah with 100% Malaysian beans. This was further supported by the innovative strategies of Nestlé Ice Cream to bring ice cream to Malaysian households during the lockdown.
The Group recorded stable profit margins for the full year of 2020, with a PBT of RM724.8 million and PAT of RM552.7 million. The contraction against 2019 was mainly due to the impact of COVID-19 on OOH channels and significant COVID-19 related expenses amounting to RM62 million, which was invested into pandemic relief efforts and comprehensive measures to preserve employee safety and operational continuity. The previous financial year also benefitted from the one-off gain of RM21 million related to the Petaling Jaya factory divestment.
Mr Juan Aranols commented, “We kept the course during the pandemic by remaining focused on what mattered: we ensured safety and protected jobs and income for all our people; we ensured continuous supply of essential foods and beverages; and we helped the community through multiple relief programmes. I am also proud to inform that we executed in full our Capital Investment plans for 2020 (the highest in the last six years) and made great progress in our sustainability agenda. Two of the highlights were the completion of one million trees planted in Sabah under project RiLeaf and the full transition to sustainably sourced paper straws across our entire UHT range. I want to commend all our teams for their effort and resilience and their unwavering commitment to make a positive difference for all Malaysians.”
Prospects for 2021
Mr Aranols further added, “We foresee that COVID-19 will continue to have repercussions, especially through the first half of the year. We will continue to focus on ensuring the safety of our people, the continued supply of our products to our customers and will again help vulnerable communities through different programmes. We also expect a significant rebound in the prices of many key commodities that anticipate margin tensions that we will continue to do our best to manage. And of course, we will drive our business with a long-term focus and always deliver safe, high-quality nutritional products meeting the taste and other expectations of all Malaysians.”
“There will be exciting developments in 2021 such as our entrance in the emerging plant-based category. Our Plant-Based Meal Solutions manufacturing facility, one of only two across all of Asia, is now complete and operational, and will be officially launched in April. In 2021 we expect to allocate significant new fresh investment to further expand and upgrade our manufacturing facilities, creating also new job opportunities. Last but not least, we will continue accelerating our efforts in 2021 to shape a greener and more sustainable future for all, with important projects such as the execution of Project RELeaf, aiming to plant three million trees from 2021 to 2023, the ongoing fight against plastic waste and our accelerated transition to renewable energy sources across all our sites,” concluded Mr Aranols.
About Nestlé Malaysia
Nestlé is the world’s largest food and beverage manufacturer. Headquartered in Switzerland, Nestlé is present in more than 180 countries around the world, and our 291,000 employees are committed to Nestlé’s purpose of unlocking the power of food to enhance quality of life for everyone, today and for generations to come. Our performance is driven by our Nutrition, Health and Wellness strategy. Nourishing Malaysians since 1912, Nestlé has earned the trust of our consumers through our quality brands and products. We are committed to improving the lives of the communities in which we operate, 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/Nestle.Malaysia.
For more information, please contact:
Maxine Lim
Nestlé (Malaysia) Berhad
Tel: (+603) 7965 6650
E-mail: [email protected]
Alya Nurina or Yasmin Kadir
acorn communications
Tel: (+603) 7958 8348
E-mail: [email protected]
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