March 30, 2023/CSL Research

Cadbury Nigeria Plc’s FY 2022 numbers showed a 30.3% y/y growth in Revenue to N55.21bn in 2022 from N42.37bn in FY 2021. The Revenue growth was largely driven by the Beverages (Bournvita and 3-in-1 hot chocolate drink) business segment, which contributed 69.5% to total Revenue and grew by 37% y/y to N38.39bn in 2022 from N28.01bn in 2021. Confectionaries like TomTom, Butter mint, and others grew by 20.6% to N15.14bn in 2022 from N12.56bn in 2021, while contributing 27.4% to total revenue. However, Revenue from Intermediate Cocoa Products shrunk by 22.1% to N1.41bn in 2022 from N1.81bn in 2021 with a marginal contribution of 2.5% to the revenue mix. We believe that the recent increase in prices was a major driver of revenue growth.

Cost of Sales (ex-depreciation), grew slightly higher than Revenue, up 32.9% y/y to N46.72bn in FY 2022 from N35.14bn in FY 2021. Gross Profit increased 17.5% y/y to N8.49bn in 2022 from N7.23bn in 2021, while Gross Margin was down by 1.77ppt to 15.4% in 2022 from 17.1% in 2021.

Operating Expenses came in elevated as Administrative Expenses (adjusted for depreciation) grew by 42.6% to N1.04bn in 2022 from N734m in 2021 while Selling & Distribution Expenses (adjusted for depreciation) increased by 26.3% to N6.16bn in 2022 from N4.88bn in 2021. Overall, EBITDA shrunk by 20.5% y/y to N1.28bn in 2022 from N1.62bn in 2021. Likewise, EBITDA Margin declined by 1.5ppts to 2.3% in 2022 from 3.8% in 2021. The deterioration in EBITDA Margin was driven by the rapid increase in cost of sales (up 33% y/y). 

Depreciation & Amortisation grew by 7.8% y/y to N1.48bn in 2022.  Earnings Before Interest and Tax (EBIT) declined by 60.5% y/y to N194m in 2022 from N491m in 2021 despite 238.7% y/y increase in Other Income. Operating Profit was down 75.9% y/y. 

Finance Income shot up by 87.9% to N1.6bn in 2022 from N856m in 2021 as Cash and Cash Equivalents increased by 54.0% to N27.45bn in 2022 from N17.82bn in 2021. However, the company’s total borrowings increased by 127.7% to N23.86bn in 2022 from N10.48 billion in 2021, hence its Interest Expense also grew significantly, up 101.9% to N504m in 2022 from N250m in 2021. Overall, Net Finance Income increased by 82.1% y/y to N1.1bn in 2022 from N606m in 2021.  

Net profit grew by 28.7% y/y to N583m in 2022 from N450m in 2021.

Our estimates are under review. Current price; 11.30/s.

Cadbury Nigeria, FY 2022 (Nm)

Source: Company, CSL Research