Nestle Nigeria Plc (‘the Company’) in her unaudited Q3 2023 results, reported a 21% year-on-year revenue growth to N134.82bn from N111.02bn in Q3 2022. According to the breakdown of operating segments, the Food business segment (consisting of Maggi and Golden Morn, etc.) grew by 30% year-on-year to N88.11bn. We believe that the benefits of higher pricing drove the revenue performance of the Food business. The Beverages segment (consisting of Milo and its variants, and Nescafe) also grew by 8% year-on-year to N46.79bn, which we attribute to strategic pricing benefit.

The Company’s strategic transfer of cost burden to consumers yielded a tangible outcome, reflected by a noteworthy 579 basis point expansion in gross margin, culminating at 39% in Q3 2023 compared to 33% in Q3 2022. This translated into a substantial 42% year-on-year growth in gross profit, which reached N52.84bn from N37.08bn in the corresponding quarter.


We retain our BUY recommendation as underpinned by our reviewed fair value estimate of N1,347.46 to reflect the Company’s performance. Our recommendation remain grounded in the Company’s robust market leadership, strategic sale of essential products and resilient pricing power. 

Please follow the link “Effective Pricing Insufficient to Improve Performance, Yet Earnings Potential Still Solid” to view the whole report.

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