Robust Consumer Demand Continues to Drive Domestic Sales
- Turnover grew by 6.8% to RM1.75 billion in Q2 2023, driven by strong domestic sales.
- Profit After Tax in Q2 2023 increased by 6.6% to RM180.9 million, supported by increased internal efficiencies amidst continued volatility in food commodity prices.
- Net interim dividend of RM0.70 per share declared.
PETALING JAYA, July 27, 2023 – Nestlé (Malaysia) Berhad maintained its resilient growth momentum for the second quarter ended 30 June 2023, recording improved top and bottom-line results. This was driven by strong domestic sales supported by solid consumer demand, positively reflecting the Group’s sustained ability to deliver on Malaysians’ expectations through its wide portfolio of products, brands and demand generation activities.
Review of performance: Quarter 2, 2023 vs Quarter 2, 2022
For its second quarter of 2023, the Group recorded a Turnover of RM1.75 billion, up by 6.8% from RM1.64 billion in the same quarter last year. This was primarily attributable to growth in domestic sales, which saw double-digit growth of 11.6%. This was slightly offset by lower export sales on the back of a strong baseline in the previous year’s corresponding quarter.
Mr Juan Aranols, Chief Executive Officer of Nestlé (Malaysia) Berhad said, “Our growth strategy remains anchored on delivering high-quality, great-tasting and nutritious products that meet the expectations of Malaysians and are in good synergy with the diverse and evolving preferences across multiple consumer segments. These solid results continue to reflect the solid sales execution across all commercial channels, as well as the relevance of our brands and product offerings. Our core products continued to perform very well, while we brought to market further relevant product innovations that received positive consumer response. We want to thank once again all Malaysians for their trust in our brands, which is the best recognition and credit to the relentless work and dedication by all our teams.”
The Group’s innovation efforts translated into a number of exciting new products introduced during the quarter. The MAGGI Noodles range added two new great-tasting varieties with MAGGI Mi Goreng Laksa Warisan and MAGGI Pedas Giler Cheezy Berapi. The HARVEST GOURMET plant-based range introduced the all-new Crispy Fish-Free Fingers, a delicious and nutritious snacking solution that will further extend the interest of Malaysians for plant-based meal options. New formats were added to the KIT KAT range, while NESCAFÉ introduced the innovative 2 in 1 cold coffee mixes that can be simply prepared just by adding cold milk and ice. Last but not least, the Lively Tea range saw the addition of a refreshing lemon tea variety in the later part of the quarter.
Profit Before Tax (PBT) and Profit After Tax (PAT) increased to RM239.8 million and RM180.9 million respectively in Q2 2023. This was supported by the solid growth, as well as the continuous focus on internal efficiencies, amidst sustained pressure on commodity prices. The profit improvement was compatible with higher marketing investment that helped to further fuel accelerated growth and gain market share in several segments.
Mr Aranols added, “Alongside our financial performance, we continued to drive our Environmental, Social and Governance (ESG) initiatives. We saw solid progress in our various efforts, with special mention to the progress of our reforestation programme, Project RELeaf, that completed the planting of the first million trees. After the interruption during COVID-19 lockdowns, this milestone puts us back on track to complete our 3 Million Trees commitment by H1 2025.”
“Another important milestone was the renewal of MILO’s sponsorship agreement with the Olympic Council of Malaysia until 2028 that will see Malaysian’s favourite nutritious beverage continue providing support for Malaysian athletes, starting with the Olympic and Paralympic Games 2024, amongst others. Finally, let me mention our ongoing efforts to encourage healthier eating habits among Malaysian families via our ‘Together in the Kitchen’ campaign, as part of our global Nestlé for Healthier Kids (N4HK) programme, which aims to empower 50 million children worldwide to lead healthier lives by the year 2030.”
Review of performance: Year-to-date 2023 vs Year-to-date 2022
For its first half ended 30 June 2023, the Group registered a turnover of RM3.59 billion, an increase of 7.8% from RM3.33 billion in the same period last year. This was mainly due to higher domestic sales, which saw double-digit growth on the back of strong domestic demand, with a more subdued contribution from export sales, that had benefitted through H1 2022 of a strong recovery from the re-opening of global economy following the pandemic.
The Group registered a PBT and PAT of RM502.2 million and RM378.1 million respectively for the first half of the year. The cumulative resilient results for the half-year period benefitted from the added scale from growth, while being somewhat impacted by ongoing tensions in commodity prices and the weakening of the ringgit. PAT was also helped by the non-repeat of Cukai Makmur (Prosperity Tax) paid in 2022.
In line with the Group’s commitment to delivering value for shareholders, the Board declared an interim dividend of RM0.70 per share for the financial year ending 31 December 2023, consistent with the first interim dividend of 2022.
Mr Aranols commented, “While multiple factors of uncertainty remain, especially those derived from a weakened Ringgit and the ongoing volatility in commodity and energy markets, we remain confident in our ability to deliver another year of solid sales growth, improved cash flow performance and resilient profitability and shareholder return. We will do this by delivering high-quality, nutritious and great-tasting products that cater to the diverse needs and expectations of Malaysians. In addition to solid commercial and financial performance, we will continue driving and advancing our ESG agenda in its different fronts, including reforestation, packaging sustainability and progressive decarbonization of our operations, while continuing to leverage our presence and scale to make a positive impact in the country.”
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 270,000 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:
Nestlé (Malaysia) Berhad
Tel: (+603) 7965 6456
E-mail: [email protected]
Shahida Irwan or Yasmin Kadir
Tel: (+603) 7958 8348
E-mail: [email protected]