FMCG-major
Nestle India was under pressure on Wednesday's trading session after the Maggi brand's parent missed estimates in fourth-quarter ending December 2020. In the last quarter of the year 2020, Nestle saw a sequential decline in both bottom-line and top-line front. However, on a year-on-year basis, the company saw a stable performance.
In December 2020 quarter, Nestle posted a net profit of Rs483.3cr marginally up from Rs472.6cr of December 2019 period, but lower from Rs587.09cr of September 2020 quarter.
Meanwhile, revenue from operations stood at Rs3,432.58cr in the quarter ender review, against Rs3,149.29cr of December 2019 and Rs3,541.70cr of September 2019.
Domestic sales in the latest quarter were at Rs3,260.70cr versus Rs2,960.78cr of December quarter a year ago and Rs3,350.10cr of the previous quarter. Export sales came in at Rs156.82cr in Q4 of the latest fiscal, compared to Rs169.96cr a year ago same period and Rs175.31cr of the preceding quarter.
Nestle stated that total Sales and Domestic Sales for the quarter increased by 9.2% and 10.1% respectively. Domestic Sales growth is broad-based largely driven by volume & mix. Demand in Out of Home channel further improved in the quarter but continues to be impacted by COVID. Export Sales were lower by 7.7% due to lower coffee exports.
Nestle follows a calendar year for financial performance announcement.
Suresh Narayanan, Chairman and Managing Director, Nestlé India said, “The year gone by has truly demonstrated the unwavering commitment to stay the course on our purpose and values. Our employees, partners, suppliers, stakeholders indeed our entire ecosystem went beyond the call of duty and made extraordinary efforts in an exceptionally challenging year. I will always remain grateful for their efforts and sacrifices in these unusual times and our results are a tribute to their determination."
Narayanan further said, "Under these circumstances, I am pleased to share that we delivered strong domestic sales growth. Nearly two-thirds of our key brands like MAGGI Noodles, KITKAT and NESCAFÉ Classic posted double-digit growth last year. This was backed by a step up in marketing spends, especially in the last quarter. Our innovation and renovation pipeline continued to be a thrust area across categories like Foods, Breakfast Cereals and Nestlé Health Sciences. E-commerce continued to grow, surge ahead and now contributes 3.7% of domestic sales. We embraced the consumers' digital journey with numerous innovative initiatives across brands and launched Ask Nestlé in Hindi."
"After initial challenges due to the pandemic, the demand in Out of Home channels has continued to improve, sequentially over quarters and we remain confident of its recovery," Narayanan added.
Here is the key highlight of financial performance for the full year 2020.
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Total Sales of Rs13,290cr.
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Domestic Sales Growth at 8.5%.
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Profit from Operations at 21.7% of Sales.
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Net Profit of Rs2,082cr.
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CSR Spend Rs46.42cr.
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Enables contribution to the exchequer of Rs3,531cr.
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Net Cash Generated from Operating Activities at Rs2,454cr.
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Strong domestic sales growth, broad-based and largely driven by volume and mix.
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Nearly two-thirds of our key products, boosted by in-home consumption, posted double-digit growth.
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Innovation and Renovation pipeline continues to be a thrust area.
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Demand in Out of Home channels continues to improve.
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E-Commerce grew by 111% and now contributes 3.7% of domestic sales.
Looking forward, Narayanan said, "protecting and preserving our planet is woven into the purpose of our organization, and at Nestlé India we have been accelerating our actions towards reducing greenhouse gas emissions across our value chain. Our ambition is to achieve 100% recyclable or reusable packaging by 2025. We are working towards shaping a waste-free future and driving new behaviour.”
In a meeting held on Tuesday, Nestle's board have recommended a final dividend of Rs65.00 per equity share amounting to Rs626.7cr for the year 2020. The total dividend for 2020 aggregates to Rs200.00 per equity share which includes one interim dividend of Rs135.00 per equity share paid on 20 November 2020.
The final dividend is subject to approval by the shareholders at the ensuing Annual General Meeting of the Company and therefore has not been recognised as a liability as at the balance sheet date in line with Ind AS 10 on “Events after the Reporting Period”.
On Wednesday, Nestle has tumbled by at least 5% with an intraday low of Rs16360 per piece on Sensex in early deals. The stock continues to be in a huge selloff.
At around 10.24 am, Nestle was trading at Rs16648.50 per piece down by Rs573.95 or 3.33%.