Nestle India Limited - Key Highlights of Q1 CY2022

Financial Highlights - Q1 2022:

- Total Sales of INR 3,951 Crore
- Total Sales Growth at 9.7%. Domestic Sales Growth at 10.2%.
- Profit from Operations at 21.0% of Sales
- Net Profit of INR 595 Crore
- Earnings Per Share of INR 61.7
- Interim Dividend INR 25 per equity share declared on 11th April 2022

Business Comments - Q1 2022:

E-commerce: The channel showed strong acceleration with growths being largely fuelled by new emerging formats like 'quick commerce' and 'click & mortar' for the channel.

Organized Trade: The channel witnessed strong broad based revenue growth as footfall normalized.

Out of Home (OOH): Despite COVID wave 3 impacting January sales, the OOH Business posted better than expected Q1 results mainly resulting from faster channel opening & due to continuation of the business led revenue acceleration measure as per the agreed strategy (channel & geographical initiatives, portfolio transformation etc.)

Exports: Our continuous focus remains towards proliferation of Indian product portfolio in new markets; expanding new categories like confectionery and our offerings with MAGGI range, fuelled with channel expansion in mainstream in the United Kingdom and Australia.

Category Performance - Q1 2022 (Domestic):

- Prepared Dishes and Cooking Aids: Strong growth momentum continued in Noodles aided by media and mega portfolio activation. Maggi Sauces and Maggi Masala-aeMagic growth was impacted by high base and gradual shift from in-home cooking to outof-home consumption, with the progressive opening up of offices and schools.

- Milk Products and Nutrition: Nutrition performed well, coupled with pricing actions. Milk products continue to face challenges from competition.

- Confectionery: KitKat and Nestlé Munch, both registered double-digit growth. The strong performance was aided by media campaigns, strong festive interventions, attractive consumer promotions, trade inputs and focused distribution drives.

- Beverages: Nescafé Classic and Sunrise delivered double-digit growth, supported by generating demand inputs to leverage the consumption season.

Commodity Outlook in Short to Medium Term:

Cost outlook for key commodities like edible oils, coffee, wheat, fuel remains firm to bullish while costs of packaging materials continue to increase amid supply constraints, rising fuel and transportation costs. Input costs are expected to be on bullish trend both globally and locally. Fresh milk costs are expected to remain firm with continued increase in demand and rise in feed costs to farmers.

Commenting on the results, Mr. Suresh Narayanan, Chairman and Managing Director, Nestlé India said, "I am pleased to share that in this quarter we have delivered double-digit domestic sales driven by volume and mix, which once again demonstrates the strength of our brands, consumer resonance and the resilience of the Nestlé India team and our partners. Our key brands continue to perform well with Maggi Noodles, KitKat, Nestlé Munch, Nescafé Classic and Sunrise posting creditable double-digit growth in this quarter.

This growth across a range of categories was enabled by a mix of innovative campaigns, attractive consumer promotions, analytics-based consumer insights, geo-targeted distribution drives and leveraging the opportunity of festive seasons. Our endeavour is to continue on the path of penetration led volume growth with determination.

We have continued to progress well on our RURBAN journey and this has borne fruit with strong sustained rural growth performance, complemented by strong growth in smaller town classes and urban agglomerates. Our robust performance in e-commerce continued as the channel grew by 71% and now contributes 6.3% of domestic sales. We will continue to leverage e-commerce further through meaningful shopper insights, data analytics, speed, sharp communication and customization.

As highlighted in previous quarters, cost of key raw and packaging materials are witnessing 10-year highs, and costs continued to surge this quarter which has impacted profit from operations. Continued inflation is likely to be a key factor in the short to medium term. We are confident of facing this turbulence with strategies of scale, efficiencies, mix and pricing all of which we will deploy judiciously.

On the occasion of World Earth Day tomorrow, I am pleased to share that as an organization we continue to invest in our sustainability journey through various commitments across climate change, packaging, sourcing and water."

Shares of Nestle India Limited was last trading in BSE at Rs. 18313.70 as compared to the previous close of Rs. 17943.15. The total number of shares traded during the day was 6069 in over 1321 trades.

The stock hit an intraday high of Rs. 18415.00 and intraday low of 18017.15. The net turnover during the day was Rs. 111035748.00.

Source : Equity Bulls

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NestleIndia INE239A01016 Q1CY2022 KeyHighlights FinancialHighlights BusinessHighlights