October 28, 2025/Cordros Report

NESTLE published their Q3-25 unaudited results today (28 October), reporting an earnings per share (EPS) of NGN27.64, (vs loss per share of NGN9.56 in Q3-24) bringing 9M-25 EPS to NGN91.44 (vs loss per share of NGN232.47 in 9M-24). The performance for the period was driven by pricing discipline, mild volume recovery and FX tailwinds, as the company recorded FX gains to the tune of NGN17.62 billion compared to FX loss of NGN21.58 billion in Q3-24.

Revenue advanced modestly by 17.5% y/y in Q3-25 (9M-25: +33.0% y/y), driven by steady growth across the Food (+20.8% y/y | 65.1% of revenue) and Beverages (+11.8% y/y | 34.9% of revenue) segments. We attribute the modest growth to mild volume recovery amid strong pricing discipline.

NESTLE’s gross margin expanded by 301bps y/y to 33.6% in Q3-25 (9M-25: +594bps y/y to 37.0%), supported by modest topline growth and stronger cost optimization across raw material sourcing and production efficiency. However, EBITDA margin contracted by 89bps y/y to 20.1%, primarily due to a sharp rise in consumer promotional expenses (+374.3% y/y to NGN18.16 billion), as the company intensified marketing efforts to sustain brand competitiveness and stimulate volume recovery in a still-fragile demand environment. Nonetheless, 9M-25 EBITDA margin improved to 23.6% (+406bps y/y), underscoring sustained margin recovery driven by pricing gains and easing cost pressures.

The company benefited from sustained FX tailwinds, posting significant foreign exchange gains of NGN17.62 billion in Q3-25, compared to FX loss of NGN21.58 billion in Q3-24. This markedly reduced finance costs by 76.5% y/y, bolstering profitability and driving a strong rebound in profit before tax to NGN39.56 billion from a loss of NGN3.08 billion in the corresponding period of 2024FY.

Ultimately, NESTLE delivered a profit after tax of NGN21.91 billion in Q3-25, a sharp rebound from the pre-tax loss of NGN7.58 billion recorded in Q3-24. This performance lifted pre-tax profit for 9M-25 to NGN72.48 billion, compared to a pre-tax loss of NGN184.27 billion in 9M-24, despite a higher effective tax rate of 43.4% (9M-24: 27.8%).

Comment: We view NESTLE’s sustained investment in brand and volume support initiatives as strategically accretive, reinforcing its competitive defense and deepening market penetration. Looking ahead, we expect the company to sustain its margin recovery trajectory through 2025, supported by disciplined pricing, easing input cost pressures, and gradual volume normalization amid festive-driven consumption uplift and supportive FX dynamics. Our estimates are under review.