April 25, 2023/CSL Research
Cadbury Nigeria Plc’s Q1 2023 numbers showed a 29.5% y/y growth in Revenue to N16.56bn in Q1 2023 from N12.79bn in Q1 2022. The Revenue growth was largely driven by the Beverages (Bournvita and 3-in-1 Hot Chocolate drink) business segment, which contributed 70.3% of the Revenue and grew by 28.2% y/y to N11.64bn in Q1 2023 from N9.08bn in Q1 2022. Confectionaries like TomTom, Butter mint, and others grew by 14.8% to N3.9bn in Q1 2023 from N3.42bn in Q1 2022, while contributing 23.7% to total revenue. Also, Revenue from Intermediate Cocoa Products jumped by 35% to N393m in Q1 2023 from N291m in Q1 2022 with a marginal contribution of 2.4% to the revenue mix. We believe that the recent increase in prices was a still major driver of Revenue growth.
Cost of Sales (ex-depreciation) grew slower than Revenue, up moderately by 6.8% y/y to N9.94bn in Q1 2023 from N9.31bn in Q1 2022. Gross Profit increased by 90.4% y/y to N6.62bn in Q1 2023 from N3.48bn in Q1 2022, while Gross Margin inched up by 12.88ppt to 40% in Q1 2023 from 27.2% in Q1 2022.
Operating Expenses grew moderately as Administrative Expenses (adjusted for depreciation) declined by 23.5% to N185m in Q1 2023 from N241m in Q1 2022 while Selling & Distribution Expenses (adjusted for depreciation) was up by 55% to N1.52bn in Q1 2023 from N978m in Q1 2022. Consequently, EBITDA spiked by 117.9% y/y to N4.92bn in Q1 2023 from N2.26bn in Q1 2022. Likewise, EBITDA Margin grew by 12.1ppts to 29.7% in Q1 2023 from 17.7% in Q1 2022. The Improvement in EBITDA Margin was driven by the slow growth in cost (6.8% y/y).
Depreciation & Amortisation was up by 7.2% y/y to N379m in Q1 2023. Growth in Other Income of the company also contributed to Earnings Before Interest and Tax (EBIT) which shot up by 136.7% y/y to N4.5bn in Q1 2023 from N1.9bn in Q1 2022.
Finance Income was up by 52.8% to N575m in Q1 2023 from N376m in Q1 2022 as Cash and Cash Equivalent increased by 24.8% to N34.26bn in Q1 2023 from N27.45bn in Q1 2022. The company’s total borrowings for the period grew by 17.3% to N27.98bn from N23.86bn in Q1 2022. We saw Interest Expense was up by 100.6% y/y to N194m from N97m in Q1 2022. In effect, Net Finance Income increased by 36.3% y/y to N380m from N279m in Q1 2022. Profit After Tax surged by 124% y/y to N3.45bn from N1.54bn in Q1 2022 and 284.6% q/q eroding N1.87bn loss in Q4 2022.
Our estimates are under review. Current price; N10.2/s.
