Follow Us on Google DiscoverNestle Nigeria Plc., recently released its FY2014 result posting another impressive year on year (YoY) result despite stiff competition and austere economic environment. FY2014 revenue rose by 7.70% YoY (NGN143.33bn vs. FY2013: NGN133.08bn).
Analysing the result QoQ, the company actually recorded a fourth quarter revenue of NGN40.66bn relative to third quarter figure of NGN35.46bn implying an impressive growth of 14.66% (vs 14.24% growth in the previous period in 2013).
Major cost line items had a mixed performance as Cost to sales ratio moderated marginally by 0.05% YoY to 57.28% as against the previous level of 57.33% in 2013, OPEX margin hiked by 22.35% (vs. FY2013: 21.76%) while finance cost jumped 147.16% accounting for 21.70% of Profit before tax (vs. 8.24% in 2013).
Expectedly, earnings after tax declined slightly by 0.10%. Using a blend of absolute and relative valuation, we arrived at a revised target price of NGN1, 006.04 for NESTLE, a 0.55% upward revision from our previous TP of NGN1000.54 and a 20% potential upside to the current price of NGN839.00 and hence, our “BUY” rating.
