Nestle Nigeria Plc. (NESTLE) reported slower than expected sales growth in Q4:2020, missing our full year revenue estimates by c. NGN7.00bn. However, on a year on year basis, revenue expanded marginally, up 1.07% to NGN287.08bn (vs. NGN284.04bn in 2019FY). Although NESTLE’s food segment (up 9.17% YoY in Q4:2020, relative to Q4:2019) was the major source of revenue support during the quarter (we suspect this was volume rather than price driven), its beverage segment reported better sales growth over 2020FY (+6.86% YoY) – now accounting for 40.18% of total revenue, from 38.01% in 2019FY. Domestic sales (which represents 98.46% of total sales) has
remained the principal revenue source, while export sales continue to fluctuate. In 2020FY, export sales fell to NGN4.41bn, from NGN4.98bn in the preceding year – traceable, in part to the FG’s decision to shut the land borders, and also, distribution challenges ushered in by the coronavirus pandemic.
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