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Nestlé Records RM5.5 Billion Turnover for 2019

Key Highlights Strong local sales growth has compensated the subdued demand in some export markets. Growth was supported by strong sa...


Key Highlights

  • Strong local sales growth has compensated the subdued demand in some export markets. Growth was supported by strong sales execution, successful product innovations and effective marketing activities.
  • Profit After Tax for FY2019 up by 2.1% to RM673 million, despite economic headwinds and challenging external factors.
  • Proposed final dividend of RM1.40 per share, maintaining total dividends of RM2.80 per share.

Nestlé (Malaysia) Berhad delivered a good performance for its fourth quarter ended 31 December 2019 on the back of robust domestic sales and continued focus on demand generation, funded by efficiencies and savings, overcoming expected external headwinds. 

Review of performance: Quarter 4, 2019 vs Quarter 4, 2018
Nestlé Malaysia recorded good Domestic sales growth of 2.8% (4.7% after adjustment for divestment of the Chilled Dairy business), on top of strong results in Q4 2018. Total Turnover for the quarter (-1.4% reported, 0.1% net of Chilled Dairy divestment) was still impacted by subdued export demand against the backdrop of global uncertainties.

Mr Juan Aranols, Chief Executive Officer of Nestlé Malaysia Berhad said, “The growth in the quarter is noteworthy in light of tough market conditions during the quarter. I am proud of the efforts deployed by our teams to harness all opportunities in search of growth. We also introduced new products that have resonated well with consumers, such as MILO Nutri Pluz, MAGGI Pazzta, KIT KAT Mandarin Orange and KIT KAT Stick Ice Cream, to name a few”.
 
Review of performance: Full-Year 2019 vs Full-Year 2018
For the full financial year ended 31 December 2019, the Group recorded a Turnover of RM5.5 billion for the financial year, on par with the previous year. Adjusted for the Chilled Dairy business divestment, Turnover growth was 1.6%, driven by growth in local sales at 4.7%.

Profit Before Tax held firm at RM876 million, while Profit After Tax increased to RM673 million, up 2.1% vs previous year, in spite of price pressures from main commodities.

Mr Juan Aranols, Chief Executive Officer of Nestlé (Malaysia) Berhad said, “These results reflect the solid foundations of Nestle Malaysia and the efforts deployed to continue delivering strong results in spite of a difficult environment. Our local sales growth at 4.7%, net of the Chilled Dairy divestment, is ahead of the market growth and confirms that our brands remain highly relevant and present in the life of Malaysians”.

“Our solid performance in Malaysia was supported by strong operational sales execution, leveraging market trends and a sustained stream of innovations throughout the year, many of which are resonating well with our consumers,” added Mr Aranols.

Successful launches in 2019 included the extension of the MAGGI Pedas Giler range, new Ready-To-Drink variants including NESCAFÉ Tarik Kurang Manis and MILO Protein Up, the launch of the STARBUCKS AT HOME range, NESTUM Brown Rice, as well as the renovation of our Ice Cream LA CREMERIA range, to mention a few.

The Board of Directors has proposed a final dividend of RM1.40 per share for the financial year ended 31 December 2019. This will bring total dividends for the year to RM2.80 per share, on par with the record-high dividends paid out in the previous year. Mr Aranols added, “With this dividend, we reconfirm our commitment to sustained value creation and to deliver good returns in the short term to our shareholders. We do this while continuously building capabilities for the future and delivering our relentless commitment to drive positive impact to the society, in many fronts”.

In this context, Nestlé Malaysia has scaled up significantly its efforts on environmental sustainability in 2019, and in particular the war against Plastic Waste. This included the introduction of paper straws in the MILO UHT 125 ml packs as the first step to fully replace plastic straws across its UHT brands and range and scaling up educational efforts in schools through the CARETon Project by MILO and Tetrapack. The reforestation efforts in its Nestlé Kinabatangan Rileaf project along the lower Kinabatangan river in Sabah continued and the Company is on track to achieve 1 million trees by mid 2020. An internal “Green Gladiators” task force has also enabled the mobilisation of energy and ideas of Nestlé Malaysia employees to accelerate the progress on environmental initiatives.
 
Prospects for 2020
“We are encouraged by our performance in 2019, particularly in the context of the volatile trading environment. Building on this in 2020, we will continue to be focused on driving strong growth momentum, nurturing our brands and building capabilities to continue delivering sustainable and profitable growth. This mindset will continue driving efficiencies and savings to fund the growth and protect financial performance.”

“There will be pressure from external factors, including commodity prices or any of the several crisis that the world is confronting in this early part of the year. But we remain optimistic that with our strong fundamentals and our focus on consumerdriven commercial activities, we are well-positioned to achieve continued growth in 2020.”

“As the largest food and beverage Company, we are also committed to leverage our size and presence to make effective and positive contributions to society and the environment. Sustainability is a prerequisite for Nestlé’s long-term growth, and we will continue to champion efforts towards creating a waste-free and environmentally sustainable future” concluded Mr Aranols.