Nestle Pakistan Limited (NESTLE), over the years, has become one of the biggest FMCG company in Pakistan. The Company is serving Pakistani consumers since 1988, when its parent company, the Switzerland-based Nestlé SA, first acquired a share in Milkpak Ltd.
The principal activities of the company are to manufacture process and sell food products and ancillary equipment. The food products include dairy, confectionery and culinary products, coffee and beverage and drinking water. The major brands include Milkpak UHT, Nestle Everyday, and Nescafe.
Historical financial performance
Over the years, Nestle Pakistan has witnessed a steady growth in its top line on the back of growing demand from the ongoing urbanisation in the country. In 2011, Nestle recorded a top line growth of 26 percent, and this turnover of the Company was powered by strong volume growth across all the key product categories. Export sales during 2011 increased by 30 percent as the Company continued to develop its distribution in Afghanistan. Nestle did face higher input cost particular in fresh milk, sugar, and fruit pulp and these cost adversely affected their Gross Profit margin which reduced by 115 bps as compared to 2010. Additionally, during the year, the Company has invested close to Rs 9 billion in the capacity enhancement, and infrastructure improvement projects and the net profit of the Company increased by 13.5 percent year-on-year.
Nestle in CY12-13
Nestle Limited, kept its grip on the market during 2012. In the calendar year, Nestle posted a bottom line growth of close to 26 percent year-on-year. The increase in profit primarily came on account of volumetric growth in its sales. The top line during CY12 clocked in Rs 79.1 billion, a 22 percent year-on-year increase. The export sales, on the other hand, reached Rs 6.0 billion and given a 15 percent year-on-year growth.
CY13 was a slow and a challenging year for Nestle on many fronts. Right from the start in the first quarter, its sales grew only 1.2 percent; that was the lowest quarterly sales growth since CY10. However, despite this slow growth, the Company reported a top line of 9 percent and it improved its Gross Margins by 80 bps. The full year bottom line remained flat over last year at Rs 5.8 billion. During the year, the Company has further diversified its product line by introducing multiple new product lines.