In Q1 2024, Nestle reported its Revenue went up 43.4% y/y and 21.9% q/q to N183.48bn from N127.97bn in Q1 2023 and N150.53bn in Q4 2023. Cost of Sales (adjusted for depreciation) rose significantly to N132.49bn (+78.0% y/y) in Q1 2024 from N74.41bn in Q1 2023. This led to a drop in its Gross Profit to N51.00bn (-4.8% y/y) in Q1 2024 from N53.56bn in Q1 2023 allowing for a Gross Profit Margin of 27.8% (-14.1ppts) from 41.9% in Q1 2023.
The company’s total Operating Expense (OPEX adjusted for depreciation) increased by 22.8% y/y to N27.20bn in Q1 2024 from N22.15bn in Q1 2023. This rise was largely driven by growth in Administrative Expenses (adjusted for depreciation) which soared to N7.74bn (+151.0% y/y) in Q1 2024 compared with N3.08bn in Q1 2023 while the Marketing and Distribution Expenses (adjusted for depreciation) grew marginally to N19.46bn in Q1 2024 (+2.1% y/y) from N19.07bn. Consequently, the company’s OPEX margin was down by 2.5ppts to 14.8% in Q1 2024 from 17.3% in Q1 2023.
