November 6, 2026/InvestmentOne Report
Revenue for 9M:2026 rose 10.40% year-on-year to NGN976.53bn from NGN884.54bn, but growth slowed through the year: H1:2026 revenue grew 11.98% to NGN650.76bn and Q3:2026 revenue grew 7.37% to NGN325.77bn from NGN303.42bn. By segment, Food grew 5.36% to NGN609.37bn (62.40% of revenue) while Beverages grew 19.91% to NGN367.16bn (37.60%).
Meanwhile, cost of sales rose only 4.66% to NGN583.67bn from NGN557.66bn as inflation slowed. Consequently, gross margin improved to 40.23% from 36.95%, while gross profit expanded by 20.19% YoY to NGN392.86bn, with Q3:2026 gross margin reaching 41.24% against 33.59% in Q3:2025.
Operating Performance Moderates as Cost Pressures Persist: Marketing and distribution expenses rose 32.78% to NGN148.39bn. Note 7(c) shows consumer promotional cost up 64.07% to NGN60.78bn (6.22% of revenue against 4.19%), freight up 28.57% to NGN45.60bn and the general licence fee up 7.82% to NGN34.78bn. In line, administrative expenses rose 7.18% to NGN37.24bn, with employee costs up 26.98% to NGN7.00bn, corporate communication up 50.47% and shared services flat at NGN16.46bn, and other income rose 8.72% to NGN1.04bn. Results from operating activities grew 14.82% to NGN208.21bn, lifting operating margin to 21.32% from 20.50%, and Q3:2026 operating profit rose 31.33% to NGN66.85bn.
Exchange Gains Drive the Pre-Tax Jump: Net finance costs fell 73.15% to NGN14.33bn from NGN53.39bn. Finance income rose to NGN37.14bn from NGN1.79bn, of which NGN35.34bn is a net exchange gain on foreign-currency balances, driven by a NGN33.90bn unrealised gain on loans as the naira firmed. Interest expense fell 32.21% to NGN51.47bn (loan interest -27.24% to NGN48.75bn), and finance costs paid fell 57.62% to NGN59.74bn, of which NGN58.52bn was interest on intercompany loans. Excluding exchange differences, net interest cost fell 33.01% to NGN49.67bn from NGN74.14bn.
Income tax expense rose 63.15% to NGN90.51bn. As a result, profit after tax grew 42.62% to NGN103.37bn, net margin expanded to 10.59% from 8.19%, and basic EPS rose 42.62% to NGN130.41 from NGN91.44 on 792.66m shares. Q3:2026 profit after tax rose 76.15% to NGN38.60bn, and the company described it as the eighth consecutive quarter of profitability.
Balance Sheet: Total assets expanded 13.78% to NGN962.73bn from NGN846.16bn at 31 December 2025, led by cash, which rose 239.88% to NGN120.39bn. Property, plant and equipment rose 5.96% to NGN524.12bn due to additions of NGN61.05bn Inventories rose 8.44% to NGN195.06bn , trade and other receivables rose 36.68% to NGN30.41bn, prepayments fell 8.65% to NGN49.14bn as advances to suppliers fell to NGN31.16bn from NGN48.02bn, and the deferred tax asset fell 37.77% to NGN31.56bn. Total equity rose to NGN116.27bn from NGN12.89bn as the accumulated loss shrank to NGN9.40bn from NGN112.78bn, but the NGN124.55bn revaluation reserve exceeds total equity, so equity excluding it is negative NGN8.28bn.
Total liabilities rose 1.58% to NGN846.46bn, but the mix improved: liabilities fell to 87.92% of assets from 98.48% and to 7.28x equity from 64.64x. Interest-bearing loans and borrowings fell 10.45% to NGN426.31bn (NGN418.69bn non-current, 98.21% of the total, and NGN7.63bn current.Contract liabilities fell 19.23% to NGN25.69bn as customer down payments fell to NGN3.81bn from NGN10.08bn. The current ratio improved to 0.94x from 0.78x, and net debt fell 30.57% to NGN305.92bn, or 1.04x trailing EBITDA.
However, On 30 July 2026 Nestl S.A. and Platinum Equity announced an exclusive arrangement to create Peranel, a 50:50 joint venture for waters and premium beverages and this will take out almost a third of revenue. We rate Nestl Nigeria Plc a OVERWEIGHT, reflecting the balance sheet repair, 1.04x net debt to EBITDA and strong cash generation, tempered by earnings that lean on exchange gains, flat quarterly revenue and the unquantified Peranel transfer.
Please click here to download the full report.