July 30, 2024/CSL Research

In its H1 2024 results, Nestle reported Revenue growth of 55.5% y/y to N406.97bn from N261.77bn in H1 2023. On a q/q basis, Revenue was up 21.8% to N223.49bn in Q2 2024 from N183.48bn in Q1 2024. Revenue growth was largely driven by volume growth and price increases. Its Food Segment (Maggi, Cerelac, Nan, Lactogen, Golden Morn, Snacking and Biscuit) which contributed 64.0% y/y to the company’s Revenue was up by 56.8% y/y to N260.65bn in H1 2024 from N166.27bn in H1 2023. Its Beverage Segment (Milo, Chocomilo, Nescafe, Milo ready-to-drink (RTD) and Nestlé Pure Life) also grew 53.2% y/y to N143.32bn from N95.50bn in H1 2023.​

Cost of Sales (adjusted for depreciation) grew faster than Revenue to N270.82bn (+79.8% y/y) in H1 2024 from N150.60bn in H1 2023 leading to a Gross Profit of N136.15bn (+22.5% y/y) in H1 2024 from N111.17bn in H1 2023.​

The company’s total Operating Expense (OPEX adjusted for depreciation) increased by 34.7% y/y to N60.43bn in H1 2024 from N44.86bn in H1 2023. While its Marketing and Distribution Expenses (adjusted for depreciation) increased to N49.69bn in H1 2024 (+25.0% y/y) from N39.67bn in H1 2023, Administrative Expenses (adjusted for depreciation) increased significantly to N10.73bn (+110.5% y/y) in the period from N5.10bn in H1 2023. Additionally, Nestle reported a decrease in Impairment on Financial Assets to N10m in H1 2024, down from N37m in H1 2023. Overall, its EBITDA grew by 14.3% y/y, rising to N75.72bn in H1 2024 from N66.27bn in H1 2023.