Nestle Nigeria Plc’s (Nestle) recently released audited FY 2023 results showed the company’s Revenue increased by 22.45% y/y to N547.12bn in FY 2023 from N446.82bn in FY 2022 driven by both a 30% y/y and 10.6% y/y increase in its Food and Beverage segments to N353.70bn and N193.42bn in 2023 from N271.99bn and N174.83bn in 2022. On q/q basis, Nestle reported 11.6% increase in its Revenue to N150.53bn in Q4 2023 from N134.82bn in Q3 2023. Its food and beverage segments advanced by 12.7% and 9.6% q/q to N99.32bn and N51.21bn in Q4 2023 from N88.11bn and N46.71bn in Q3 2023 respectively. We note that a substantial part of its Revenue was generated from its domestic sales, as domestic sales grew by 23.12% to N545.94bn in 2023 from N443.41bn in 2022 while contributing 99.79% to the company’s total Revenue. On the other hand, the company exports sales declined 66.2% y/y to N1.15bn in 2023 from N3.41bn in 2022, contributing a paltry 0.21% to the company’s total Revenue.
The company’s Cost of Sales (adjusted for depreciation) grew slower than Revenue, up 13.21% y/y to N321.77bn in 2023 from N284.23bn in 2022. An increase in raw materials cost to N284.16bn in 2023 from N223.68bn in 2022 drove the y/y growth in Cost of Sales (adjusted for depreciation). Gross Profit advanced by 38.60% y/y to N225.34bn in 2023 from N162.59bn in 2022 bringing its Gross Profit Margin to 41.2% in 2023 from 36.4% in the prior year. On a q/q basis, the company’s cost of sales (adjusted for depreciation) was up by 14.4% to N91.35bn in Q4 2023 from N79.83bn in Q3 2023 bringing its Gross Profit to N59.18bn in Q4 2023 from N55bn in Q3 2023.
