Growth Momentum and Resilient Bottom Line Driven by Strong Domestic Sales
- Turnover increased by 5.3% to RM1.77 billion, achieved on the back of higher domestic sales which grew by 11.7%.
- Profit After Tax in Q3 2023 increased to RM133.7 million, driven by strong domestic sales and continuous internal efficiencies.
- Second interim dividend of RM0.70 per share declared.
PETALING JAYA, October 26, 2023 – Nestlé (Malaysia) Berhad continued its robust growth trajectory for the third quarter ended 30 September 2023, recording solid top and bottom-line results. Supported by strong domestic sales on the back of resilient consumer demand, the improved performance underscores the Group's consistent track record in fulfilling the diverse expectations of Malaysians through its wide product portfolio and brands, coupled with impactful demand generation activities.
Review of performance: Quarter 3, 2023 vs Quarter 3, 2022
For its third quarter of 2023, the Group recorded a Turnover of RM1.77 billion, marking a 5.3% increase from the same quarter last year. Domestic sales remained a key contributor with double-digit growth of 11.7%. This was partially offset by export sales, which were lower in comparison to a very high baseline in the previous year’s corresponding quarter.
Mr. Juan Aranols, Chief Executive Officer of Nestlé (Malaysia) Berhad, said, "The positive momentum we have achieved reflects the solid work done by our teams to continue delivering high-quality, great-tasting, and nutritious products which meet the expectations of Malaysians. Through excellence in sales execution and across all steps in the value chain, we continue to protect the relevance of our brands and product offerings across all commercial channels. Our core products have continued to deliver a good performance, while our recent innovations have been well-received by consumers, giving us confidence to continue delivering sustainable profitable growth.”
Innovation was again significant in the quarter. The Group further expanded its presence in the fast-growing Dairy-Free Drinks space with the launch of Nestlé GOODNES, with two initial varieties, Oat and Oat & Almond. A range of new ice cream products were also launched, namely Nestlé MILO Kaw, LA CREMERIA Mango Sticky Rice and LA CREMERIA Hazelnut, as well as the popular Nestlé Boba Brown Sugar in a convenient take-home pint format. Other innovations included the limited-edition KIT KAT Salted Caramel Cookies and MAGGI Noodles Cili Ala Kampung in a bowl format.
The quarter saw intense brand events and activities, with special efforts continuing to educate communities on the importance of healthy eating and active lifestyles. Special mention to the big comeback of the MILO Malaysia Breakfast Day with large-scale events in Putrajaya, Kuching and Kota Kinabalu, attracting more than 60,000 participants; as well as the fourth edition of the NESTLÉ OMEGA PLUS Walk A Million Miles campaign that saw 30,000 Malaysians joining virtually to walk collectively over 2,000,000 Miles, the highest result since this virtual event was first launched.
Profit Before Tax (PBT) and Profit After Tax (PAT) both increased to RM200.3 million and RM133.7 million respectively in Q3 2023. This was driven by robust domestic sales coupled with the Group’s continuous drive to enhance internal efficiencies and cost saving initiatives, as well as a more moderate impact of commodity costs. The Wyeth business, integrated for the first time in this quarter, delivered positive results as per expectations.
Mr. Aranols added, “We continue to invest year in and year out to keep our industrial assets competitive and efficient, while reducing our environmental impact. Once again, this year we will see good progress in our key published measurements. Indeed, constantly making progress in our ESG initiatives through our multiple programmes remains of the highest priority. We are further scaling up our efforts to eliminate plastic waste by advancing our partnership with several municipalities to reach already 170,000 households in Selangor and Kuala Lumpur. A key highlight in this respect is the recently expanded partnership with Majlis Bandaraya Shah Alam and KPT Recycle Sdn Bhd, a waste management company specialising in innovative, environmentally responsible solutions, to further accelerate our current household coverage.”
“We are furthering our efforts to uplift local farming communities by expanding our Farmer Connect programme to Sabah and Sarawak, where we have joined hands with the Malaysian Cocoa Board to promote sustainable cocoa farming and the adoption of Regenerative Agriculture practices, with the ultimate objective of increasing the local cocoa ingredients used for the manufacturing of our products. Our reforestation initiative, Project RELeaf, made further progress in the quarter, and we are on track to deliver the second million trees planted by mid-2024, as per our earlier announcement.”
Review of performance: Year-to-date 2023 vs Year-to-date 2022
For the first nine months ended September 30, 2023, the Group registered a Turnover of RM5.37 billion, marking a 7.0% increase compared with RM5.02 billion in last year’s corresponding period mainly due to the double-digit growth in domestic sales, driven by robust demand. This was slightly tempered by reduced export sales, which had benefited from a robust recovery in 2022 as the global economy reopened after the pandemic.
The Group’s PBT of RM702.4 million and PAT of RM511.8 million for the first nine months of the year reflects a moderate increase of 3.9% and 5.0% respectively. This was supported by strong domestic sales growth and continuous focus on internal efficiencies and saving initiatives to offset the impact of volatile commodity prices and unfavourable exchange rates. The improved PAT was also supported by the absence of the Cukai Makmur (Prosperity Tax) imposed in 2022.
In line with the Group’s commitment to delivering value for shareholders, the Board declared a second interim dividend of RM0.70 per share for the financial year ending 31 December 2023, consistent with the second interim dividend of 2022.
Mr. Aranols commented, “As we move into the final quarter of the year, we stand firm in our commitment to driving the sustainable growth of the Group. Despite facing an uncertain environment, notably the challenges posed by the weakened Malaysian Ringgit and ongoing volatility in commodity and energy prices, we continue to leverage our strong foundation and proven capabilities in providing relevant product offerings that meet the diverse needs of Malaysians. Alongside this, our ESG agenda ensures that we remain on the frontlines to help shape a greener future for Malaysia.”
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 Irawan or Yasmin Kadir
Tel: (+603) 7958 8348
E-mail: [email protected]