FLOURMILL | Flour Mills of Nigeria - Company Update : Improved earnings outlook spurs rating revision

    FLOURMILLS has proven resilient in the face of tough macroeconomic terrain by developing new products, expanding its market reach, and boosting export earnings.


    Topline growth expected

    In FY’24/25E, we maintain our expectation of steady revenue growth, driven by strong performance across the different business segments as explained below:


    Food: This segment has continued to deliver impressive turnover on the back of product innovation and continuous investment in distribution strategies, alongside price and volume increases. For context, in FY’23/24, the company recorded a 17.2% YoY increase in volumes, driven by Business2Customer (B2C) expansion in its Pasta, Semovita and GoldenVita products. In addition, the company launched new products like the chocolate spread, mayonnaise, chin-chin, brown sugar and the consumer ball food in the North. For the noodles line, the company added new flavours (Goat Pepper Soup and Jolof Hot Hot), which — according to management — was well received by the market. Given Food’s significant portion of total revenue (c.65.9%), we expect the continued investment drive in B2C categories, new product launches, and higher prices to drive boost topline growth in FY’24/25E.


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