Nestlé India (NESTLEIND) Q4 2012 earnings summary

Executive summary

• FY12 delivered 10.8% net sales growth and 11.1% net profit growth despite a difficult economic environment; investments in capacity, distribution and innovation continued.

• Domestic sales growth was led mainly by net realizations and product mix; exports grew with third-party sales contributing significantly.

Financial highlights

• Net sales were Rs. 83,022.6 million, up 10.8% YoY; domestic sales were Rs. 81,561.9 million and exports Rs. 4,256.9 million.

• Profit after tax rose 11.1% to Rs. 10,679.3 million; EPS increased to Rs. 110.76 from Rs. 99.73.

• Profit before tax was Rs. 15,526.2 million versus Rs. 13,879.2 million; total revenue reached Rs. 83,655.6 million.

• Cost of materials as a share of net sales fell to 45.5% from 48.0%, aided by realizations and mix, partly offset by higher input costs.

• Operating cash flow was Rs. 16,933.8 million versus Rs. 11,581.7 million; fixed-asset purchases were Rs. 9,767.6 million.

Outlook and guidance

• A steady recovery was anticipated in the short term, with consumption-led growth expected to revive; rapid growth revival was not expected.

• Long-term prospects were viewed positively, supported by rising aspirations, urbanisation, favourable demographics, low consumer-product penetration and premiumisation.

• Export strategy prioritised new products and markets; stronger sales were expected in culinary products and coffee, while instant tea was to gain variety and higher-value offerings.

• Priorities included wider distribution, consumer-relevant innovation, affordable nutrition products and building capacity to respond quickly to emerging demand.