March 2, 2026/InvestmentOne Report

Nestl Nigeria crossed a historic milestone in FY:2025, reporting full-year revenue of NGN1,207.77bn, its first-ever trillion-naira annual outing representing a 25.96% year-on-year increase from NGN958.81bn. This acceleration follows the 75.24% surge reported in FY:2023 when the initial impact of naira liberalisation inflated naira-denominated revenues dramatically.

Both segments contributed constructively with the Food segment generating NGN784.0bn (+27.18% YoY), retaining its position as the primary revenue engine with a 64.92% contribution to group turnover while the Beverages segment posted NGN423.8bn (+23.77% YoY), accounting for the remaining 35.08%. 

Nestl Nigeria enters 2026 from its strongest operational platform in three years. Notably, three signals have been gotten; first, the explicit flag on dividend resumption indicates the board is actively tracking the pace at which retained losses are being extinguished  at NGN104.97bn PAT in FY:2025 against accumulated losses of NGN112.78bn, a single further strong earnings year could see the balance sheet turn dividend-capable as early as FY:2026. Second, the emphasis on a more stable economic environment is a coded acknowledgement that the management team no longer sees macro volatility as their primary operational constraint, a significant shift in posture from 2023 2024.

Third, sustained marketing investment signals a volume grab strategy, meaning Nestl is willing to absorb short-term operating cost inflation to reinforce brand equity while competitors remain cautious. We believe the unstable nature of the foreign exchange situation in the country and the lack of a cut from the US FED (SOFR) has continued to pose a downside risk on the organization. At this stage, we maintain a UNDERWEIGHT rating on Nestl Nigeria Plc

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