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RM1.0 billion CAPEX plan announced for 2023- 2025 period
KEY HIGHLIGHTS
- Full-year Turnover grew by 16.2% to RM6.7 billion supported by both domestic and export markets.
- Full-year PAT increased by 8.9% to RM620.3 million despite higher commodity prices, unfavourable exchange rates and the impact of Cukai Makmur.
- Q4 Turnover up by 12.4% to RM1.65 billion on the back of solid domestic and export growth, while Q4 PAT increased by 18.5% to RM132.9 million.
- Third interim dividend of RM1.22 per share declared.
PETALING JAYA, February 21, 2023 – Nestlé (Malaysia) Berhad once again delivered resilient results for its financial year ended 31 December 2022, on the back of solid acceleration in domestic and export sales. Coupled with multiple actions to defend margins amidst global food commodities inflation, the Company’s bottom-line and cash flow performance remained robust.
Nestlé remains very confident in the long-term prospects of Malaysia and the Company announced a new cycle of investment in its industrial footprint with RM1.0 billion CAPEX planned for the 2023 – 2025 cycle.
Review of performance: Quarter 4, 2022 vs Quarter 4, 2021
For the fourth quarter of 2022 (Q4 2022), the Group recorded an increase in turnover from RM1.47 billion to RM1.65 billion, a 12.4% increase versus the same quarter of the previous year. This solid momentum was achieved on the back of higher domestic and export sales, which grew by 10.6% and 18.3% respectively on the back of effective demand generation efforts and the normalisation of post-pandemic economic activities.
Mr Juan Aranols, Chief Executive Officer of Nestlé (Malaysia) Berhad said, “Our strong performance in the final quarter of the year reflects the ongoing efforts to keep our brands close and relevant to the needs and expectations of Malaysians. We continued to harness every opportunity to drive and fulfil strong demand for our brands, in keeping with our promise to deliver Good Food, Good Life to all.”
Mr. Juan Aranols, Chief Executive Officer of Nestlé (Malaysia) Berhad.For the quarter under review, the Group recorded Profit Before Tax (PBT) and Profit After Tax (PAT) of RM183.3 million and RM132.9 million respectively ahead of the corresponding quarter of last year. This was achieved on the back of the increased turnover and, despite higher commodity prices and unfavourable exchange rates, as well as the quarterly impact of Cukai Makmur (Prosperity Tax) on PAT.
Review of performance: Full Year 2022 vs Full Year 2021
For the full financial year, the Group registered improved sales of RM6.7 billion, a 16.2% increase from RM5.7 billion in the previous financial year. This was driven by the positive growth of both domestic and export sales, which increased by 12.9% and 29.3% respectively. The core Food and Beverage (F&B) segment maintained its positive momentum while the Out-of-Home (OOH) business serving restaurants, hotels and other hospitality-related sales channels bounced back strongly following the end of the remaining movement restrictions in the second quarter of 2022.
Mr Aranols commented, "As we celebrated our 110 years in Malaysia, we remained focused on our mission to deliver high quality products under the brands trusted by millions of Malaysians who use our products on a daily basis, while contributing positively to the society and to the environment. We continue optimizing the end-to-end value chain of our core products, while delivering a notable stream of product innovations that have resonated well with the needs and expectations of Malaysians.”
New and exciting product innovations introduced by Nestlé (Malaysia) Berhad.“Amongst other activities, we drove awareness on the benefits of plant-based diets with the consolidation of HARVEST GOURMET as the brand of choice in this new emerging consumer space. MAGGI continued to bring great food and culinary solutions to the table of Malaysians, such as our healthier choice MAGGI Nutri-licious Noodles range and our range of marination recipes. We also catered for occasional moments of indulgence with the introduction of the NESCAFÉ GOLD Cappuccino Ice Cream, among other exciting products. This went hand in hand with effective consumer engagement and excellence in sales execution, covering all channels, both online and offline. Our Nestlé Professional business fully recovered from the impact of the pandemic, as Malaysians fully embraced the end of travel and hospitality restrictions.”
Profit wise, the Group turned in PBT of RM859.5 million and PAT RM620.3 million for the full year, reflecting an increase of 14.3% and 8.9% respectively compared with 2021. Stronger sales, multiple cost-saving initiatives and reduced COVID-19 expenses helped to mitigate the impact of higher commodity prices, unfavourable exchange rates and the impact of the Prosperity Tax on PAT.
“The rebound in our exports sales post-COVID was critical to alleviate the pressure on our margins and helped to moderate the intensity of price increases needed to offset the impact of global food commodities inflation,” Aranols added.
In line with the Group’s commitment to deliver value to shareholders, the Board declared a third interim dividend of RM1.22 per share for the financial year ending 31 December 2022, 20 sen higher than the third interim dividend of 2021.
“In tandem with financial performance, the Group’s Environment, Social and Governance (ESG) efforts were again a key priority throughout 2022. On the environmental side, we pioneered the adoption of renewable electricity through the Green Electricity Tariff framework; we took new and industry pioneering steps to eliminate the use of virgin plastics, such as the adoption of recycled-PET for all our range of NESCAFÉ and MILO Ready-to-Drink (RTD) bottles; and the adoption of paper to replace plastic in MAGGI bowls as well as in a growing number of Ice Cream products. Our ongoing community Door-to-Door Collection and Recycling programme grew to reach over 112,000 households in urban communities across Selangor and Kuala Lumpur, while we also expanded to rural areas of Selangor with our KitaR Recycling Programme. Through Project RELeaf, we also made further progress accelerating our tree planting efforts in line with our aspiration to plant three million trees by the second half of 2024.”
“Through our various community outreach programmes, we contributed approximately RM15 million in donations to support and uplift communities in need throughout Malaysia. Our efforts were channelled via flood relief efforts by the Malaysian Red Crescent Society, supporting charity homes and distributing MAGGI bubur lambuk to B40 communities, alongside multiple other food aid initiatives.”
“Last but not least, we have continued to strengthen our internal controls, policies and governance to support the growth and evolution of the business. In tandem, our commitment to protecting and empowering our employees in this post-COVID era remains unwavering, and we are continuously solidifying our communications and processes throughout the Company.”
Prospects for 2023
Mr Aranols added, “Moving forward in 2023, the volatile economic environment is expected to persist due to continued inflationary pressures alongside uncertainties in commodity and currency prices, with signs of recession looming in some of the world’s major economies. Food commodities prices and food inflation in particular will remain high throughout the first half of 2023, but we expect a progressive improvement in the later part of the year.”
“Against this backdrop, we will redouble our efforts to stay focused on what matters: meeting and serving the needs of Malaysians while further investing in capabilities to drive sustainable profitable growth. We remain convinced that nurturing the strong bonds of our brands with the rakyat, on a foundation of trust and quality, while remaining in touch with the evolving lifestyles remains the best strategy to cope with a challenging external environment and deliver ultimately another year of solid and sustainable results in 2023.”
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:
Shaheen Zaffar
Nestlé (Malaysia) Berhad
Tel: (+603) 7965 6456
E-mail: [email protected]
Farah Iman or Yasmin Kadir
acorn communications
Tel: (+603) 7958 8348
E-mail: [email protected]