Nestlé India (NESTLEIND) Q4 2015 earnings summary

Executive summary

• FY15 was severely disrupted by the MAGGI Noodles crisis; net sales fell 17.2% and PAT fell to ₹5,632.7m, with a ₹5,008.4m exceptional charge. Sequential sales and margins improved toward year-end.

• MAGGI Noodles returned to market on 9 November after court-directed testing; Nielsen-reported market share recovered from 0% to 33.3% by 31 December.

Financial highlights

• Net sales were ₹81,232.7m, down 17.2% YoY; net domestic sales declined 18.3%, while export sales fell 1.3%.

• Profit from operations was ₹13,337.5m versus ₹17,925.5m; profit before tax was ₹8,136.3m versus ₹17,743.5m.

• PAT was ₹5,632.7m versus ₹11,846.9m; EPS was ₹58.42 versus ₹122.87.

• Revenue from operations was ₹81,753.1m; ₹3,034.0m of net sales was reversed for withdrawn MAGGI Noodles stock.

• Other income rose to ₹1,100.9m from ₹873.2m, reflecting higher average liquidities after ECB repayment in 2014.

Outlook and guidance

• Management expected the Indian economy to pick up with a lag, citing reform efforts, infrastructure investment and fiscal rationalization; consumer and business sentiment remained subdued.

• Portfolio priorities included faster innovation and renovation, value-up and premium products, and greater use of digital and e-commerce opportunities.

• Management expected MAGGI Noodles to rebuild toward category leadership after the 2015 relaunch and strong consumer response.

• Key uncertainties included evolving regulation, raw-material price volatility, competition in processed foods and a complex supply chain.