Earnings Update: Nestle Nigeria FY 2024 & Q1 2025 – Profit Restored as Nestle Nigeria Emerges Stronger After FY 2024.

Event

Nestle Nigeria or (“the Group”) delivered an impressive top-line growth in FY 2024, as revenue grew by 75% year-on-year. However, this strong performance was overshadowed by steep FX-related losses, which led to a 107% jump in loss after tax. Unsurprisingly, the Group declared no dividend for the second consecutive year, underlining the pressure on earnings.

Encouragingly, the Group entered 2025 on a stronger footing as they reported a solid Q1 2025 performance. Revenue grew by 61% year-on-year, and the Group returned to profitability after a loss in Q1 2024. This recovery was supported by a more stable macroeconomic environment, particularly the relative stability of the naira, which contrasts sharply with the FX volatility experienced in the same period last year.

Outlook

Following the impressive turnaround in Q1 2025, we revise our full-year expectations upward, reflecting improved cost dynamics, earnings recovery, and a stabilising macroeconomic environment. Nestle Nigeria appears to have moved past the worst of the FX-driven cost spiral and is now positioned for sustained growth. In line with the earnings recovery, we raised our fair value estimate to N2,083.18, up from N1,075.36 in our previous report. This implies a 39% upside potential, supported by margin expansion, FX relief, and a return to sustainable profitability. Overall, we retain our BUY recommendation.

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