October 27, 2023/CSL Research

Cadbury Nigeria Plc. (Cadbury) reported a 39.2% y/y growth in Revenue to N59.2bn in 9M 2023 from N42.54bn in 9M 2022 financial result. All the revenue segments showed growth in the period. The Refreshment Beverage, Confectionary and Intermediate Cocoa Products appreciated by 106.6%, 54.6% and 169.7% y/y to N41.08bn, N13.88bn and N3.02bn respectively whilst its new product line, biscuits recorded N1.04bn in revenue in 9M 2023. On a q/q basis, its revenue segments advanced by 21.8%, 15.3%, 25.0% and 94.8% q/q to N16.16bn, N5.33bn, N243mn and N1.86bn respectively.

Cadbury Nigeria Plc. Q3 2023 (Nm)

Source: Company data, CSL Research

The company’s Cost-of-Sales (without depreciation) advanced by 26.0% y/y to N42.04bn in 9M 2023 from N33.38bn in 9M 2022 bringing its Gross profit to N17.16bn in the period from N9.16bn. Consequently, its Gross Profit Margin came in at 29.0% higher than 21.5% recorded in 9M 2022. Cadbury’s Operating Expense (without depreciation) increased by 32.3% y/y to N6.34bn from N4.80bn in 9M 2022 with its Selling and Distribution Expense contributing to the company’s OPEX to the tune of N5.07bn from N3.93bn in 9M 2022 while its Administration Expenses settled at N1.29bn from N869m in 9M 2022.

Cadbury’s Net Finance Income plunged to a cost of N19.89bn in 9M 2023 from a gain of N712m in 9M 2022 driven by FX exchange difference loss of N21bn in Q2 2023. The company reported no tax charge, therefore, Cadbury’s Profit Before Tax and Profit After Tax came to N10.24bn in 9M 2023. The company recorded a Net finance gain of N720m in Q3 2023 standalone which brought its Profit After Tax to N4.30bn for this period.

We have a price target of N16.78/share and a buy recommendation for Cadbury. Our price target implies an upside potential of 33.17% from the current price of 12.60/s.

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​CSL_Cadbury_ Earnings Quick Take Q3 2023.pdf​