Nestlé Malaysia Delivers 7.9% PAT Growth for FY2016

To Press Releases listPetaling Jaya,Feb 28, 2017

KEY HIGHLIGHTS

  • Turnover for the financial year ended 31 December 2016 hit a record high, increasing by 4.7% to cross the RM5 billion mark first time. Domestic as well as Export business showed strong growth.
  • Growth driven by continuous product innovations as well as strong marketing and trade promotions.
  • Profit After Tax improved by 7.9% to RM637 million for the financial year ended 31 December 2016.
  • Cash Flow after Investments increased by 44%, mainly driven by further optimisation of the working capital.
  • Proposed final dividend of RM1.30 per share, bringing total dividends for the year to RM2.70 per share.

Nestlé (Malaysia) Berhad delivered a superior performance for its financial year ended 31 December 2016, with strong top and bottom line results in another year of growth for the Group. 

Review of Performance: Full-Year 2016 vs Full-Year 2015

The Group marked a milestone by crossing the threshold of RM5 billion in revenue, with a Turnover of RM5.1 billion for the year. This represents a 4.7% increase from RM4.8 billion in the previous year. Domestic sales continued to be a key contributor, achieving 3.3% growth. This was driven by the Group’s continuous product innovations in tandem with successful marketing and trade promotions. Similarly, the export business showed good growth with an increase of 9.6%, an improvement compared with a flat performance in the previous year.

Gross Profit for the year increased by 7.1% as a result of the higher Turnover, favourable commodity prices and stronger operational efficiencies in the factories and supply chain. The Group partially re-invested these savings into stronger marketing and trade promotions as well as new product launches.

Mr Alois Hofbauer, Chief Executive Officer, Nestlé (Malaysia) Berhad, said, “We are pleased to have achieved a strong performance in 2016 in spite of a challenging market. Our solid strategy enabled us to spur growth during the year. This propelled us forward as we focused on enhancing efficiencies and boosting innovation in response to the needs of our consumers. We are proud to have introduced even more new innovations in 2016, such as our NESCAFÉ Barista machine, MAGGI OatMee Mi Goreng Kari Flavour, OMEGA PLUS Milk with Oats, NESTLÉ BLISS GO and MILO frozen confection, to name a few.”

“We also successfully implemented new innovative business models. We launched the first KIT KAT Chocolatory in Southeast Asia and continued to grow our E-Commerce business. These efforts have collectively enabled us to strengthen our market share in key product categories.”

The Group’s balanced business approach to drive long-term growth enabled it to increase the Operating Profit by 5.1% to RM799 million in 2016. Profit After Tax rose by 7.9% to RM637 million.

Review of performance: Quarter 4, 2016 vs Quarter 4, 2015

In the fourth quarter ended 31 December 2016, the Group recorded a higher Turnover of RM1.25 billion, up by 4.2% from the previous year’s corresponding quarter. Domestic sales showed good growth with an increase of 3.5% while the export business grew by 6.4%.

Price increases for some major commodities as well as the depreciation of the Ringgit were to the biggest extent offset by the strong Turnover as well as internal efficiency increases. As a result, Gross Profit was RM458 million, a marginal contraction compared with RM460 million in the same quarter last year.

Despite the high Turnover for the 4th Quarter, 2016, the profit was lower because of the planned and exceptionally higher marketing and trade investments in preparation for the early Chinese New Year in 2017.

Dividends

As a result of the Group’s strong performance, the Board of Directors proposed a final dividend of RM1.30 per share for the financial year ended 31 December 2016. Including the interim dividends paid, this will bring total dividends for the year to RM2.70 per share.

This marks a record-high for the Group, representing a payout ratio of 99.4% and an increase of 12.5% from the previous year.

Outlook

Mr Hofbauer added, “This year will continue to be challenging for our business. Our commitment to our successful FIT strategy will continue to drive us forward, as the key pillars of ‘Fuel to Grow’, ‘Innovate to Grow’ and ‘Transform to Grow’ (“FIT”) remain all the more relevant in weathering headwinds in 2017. We will maintain our focus on realising efficiency increases across our operations. These improvements will be reinvested into the sustainable growth of the Group through our product innovation and renovation drive, coupled with consumer and trade promotions.”

“We remain unwavering in commitment to our Creating Shared Value approach to ensure that our Group continues to perform, while creating a positive impact with society. We will continue to prioritise nutrition in our product offerings in line with our aim to nourish all Malaysians with Good Food, Good Life,” concluded Mr Hofbauer.


About Nestlé Malaysia

Nestlé, the world’s largest food and beverage manufacturer and a leader in Nutrition, Health and Wellness, is headquartered in Switzerland. Since 1866, Nestlé has been committed to providing high quality, tasty, safe and nutritious products to our consumers, in line with our promise of Good Food, Good Life. Nourishing Malaysians since 1912, Nestlé has earned the trust of our consumers through our quality brands and products, as well as our commitment to improve the lives of the communities in which we operate. At Nestlé, our consumers are at the heart of everything we do. We aim to delight our consumers by offering the best quality products; staying true to our Swiss roots while maintaining our Halal excellence and integrity. 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/NestleMalaysia



For more information, please contact:

Maxine Lim
Nestlé (Malaysia) Berhad
Tel: (+603) 7965 5185
E-mail: Maxine.Lim@my.nestle.com

Joanne Lim or Yasmin Kadir
acorn communications
Tel: (+603) 7958 8348
E-mail: acorncommunications@acornco.com.my


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