July 30, 2025/CSL Research

Cadbury Nigeria Plc delivered strong H1 2025 results, with Revenue up 50.2% y/y to ₦77.25 billion (H1 2024: ₦51.44 billion). Growth was driven by higher domestic sales, particularly in Refreshment Beverages (up 58.5% y/y to ₦49.75 billion, from ₦31.39 billion) and Confectionery (up 69.1% y/y to ₦24.27 billion, from ₦14.35 billion).

Quarter-on-quarter, Revenue increased 7.5% q/q to ₦40.02 billion in Q2 2025 (Q1 2025: ₦37.23 billion).  Cadbury’s Cost of Sales rose by 32.3% y/y to ₦55.39 billion in H1 2025, up from ₦41.85 billion in H1 2024. However, this increase was slower than the growth in Revenue, resulting in a 9.7 percentage point improvement in the cost-to-sales ratio, which declined to 71.7% (H1 2024: 81.4%). As a result, Gross Profit jumped by 128.0% y/y to ₦21.86 billion (H1 2024: ₦9.59 billion), while the Gross Profit Margin improved significantly to 28.3%, up from 18.6% in the same period last year. Notably, Cost of Sales for Cadbury in Q2 2025 standalone jumped by 20.9% q/q to ₦30.32 billion from ₦25.07 billion in Q1 2025, leading to a 20.2% q/q decline in the Q2 2025 Gross Profit to ₦9.71 billion from ₦12.15 billion in Q1 2025. The rise in cost is attributed in part to increased spend on the production of finished goods in the quarter.

Financial Highlights:

• Revenue: +50.2% y/y to ₦77.25Bn
• Cost of Sales: +32.3% y/y to ₦55.39Bn
• OPEX: +19.8% y/y to ₦5.56Bn
• EBITDA: +202.8% y/y to ₦17.29Bn
• Operating Profit: +244.2% y/y to ₦16.27Bn
• Profit After Tax: +204.7% y/y to ₦10.18Bn

Stock Rating: Under Review

Total Operating Expenses for Cadbury increased by 19.8% y/y in H1 2025 to settle at ₦5.56 billion, compared to ₦4.64 billion in H1 2024, mainly driven by a 44.6% y/y increase in Selling and Distribution Expenses, which hit ₦4.90 billion from ₦3.39 billion in the previous year. Nonetheless, Cadbury’s OPEX ratio dropped by 1.8 percentage points to 7.2% in H1 2025, down from 9.0% in H1 2024.

Cadbury’s Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) surged by 202.8% to ₦17.29 billion, from ₦5.71 billion in H1 2024. This resulted in a notable 11.3 percentage point improvement in the EBITDA margin, which climbed to 22.4%. Likewise, Operating Profit (EBIT) grew by 244.2% y/y to ₦16.27 billion, up from ₦4.73 billion in H1 2024, pushing the EBIT margin up by 11.9 percentage points to 21.1% in H1 2025 from 9.2% in H1 2024.

Cadbury’s Net Finance Cost fell sharply by 90.7% y/y to ₦1.74 billion in H1 2025, down from ₦18.61 billion in H1 2024. This significant decline was primarily driven by:

a) A swing in realized exchange differences, which moved from a loss of ₦14.97 billion in H1 2024 to a gain of ₦106 million in H1 2025.

b) A 118% y/y improvement in unrealized exchange differences, resulting in a gain of ₦143 million in H1 2025, compared to a loss of ₦791 million in the prior year.

We attribute the improvements in exchange differences to the intercompany loan forgiveness and the conversion of intercompany loans and interest into equity in FY 2024, significantly clearing Cadbury’s FX-denominated exposure.

As a result, Cadbury reported a Profit Before Tax (PBT) of ₦14.54 billion in H1 2025, a sharp turnaround from a Loss Before Tax of ₦13.88 billion in H1 2024. After accounting for an Income Tax Expense of ₦4.36 billion, Profit After Tax (PAT) stood at ₦10.18 billion, marking a 204.7% y/y increase from a Loss After Tax of ₦9.72 billion in the same period last year. However, on a quarter-on-quarter basis, rising costs impacted Cadbury’s Q2 2025 standalone performance. PBT and PAT for Q2 2025 declined to ₦5.99 billion and ₦4.20 billion, respectively—representing 29.8% q/q declines from ₦8.54 billion and ₦5.98 billion recorded in Q1 2025.

We have a BUY recommendation on the stock with a target price of ₦57.44/s which is being reviewed.

To read full report, click on the link below​​

​​​CADBURY H1 2025 Quick Take.pdf​​​​​​​​​​​​​​​​​​​​​

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