Nestle Q4: Profit up 65%, marketing spends cut
MD Suresh Narayan told investors that the company has delivered its highest double‐digit growth in a decade
FMCG major Nestle India has posted a 65% year-on-year (YoY) rise in net profit at Rs 628 crore for the fourth quarter ended December 2022. The profit stood at Rs 379 crore y-o-y.
The company’s revenue from operations in the quarter jumped 13% to Rs 4,256 crore from Rs 3,747 crore in the same period the previous year.
While the sale of products grew 14% from Rs 3,714 crore in Q3 to Rs 4,233 crore in Q4, the total expenses rose nearly 13% from Rs 3,038 crore to Rs 3,427 crore in the same period.
The company officials said in an earnings call that marketing spend has been cut. It is interesting to note that Nestle India is one of the largest advertisers.
“Other expenses as a percentage of sales are positively influenced by lower marketing spend and a conscious effort to control cost, partly offset by the surge in fuel prices,” the company told investors.
Other expenses rose from about Rs 3,260 cr to Rs. 3,700 cr between 2021 and 2022. In comparison, sales of products rose from Rs 14,665 cr to 16,789 cr, as per the company's financial report.
“We delivered our highest double‐digit growth in a decade led by sustained volume and mix-led growth, leading to strong value growth. In 2022 total sales grew by 14.5% and domestic sales increased by 14.8%, with broad-based performance across all categories. Our robust performance on e‐commerce continued, fuelled by Quick Commerce and Click & Mortar. Out‐Of‐Home (OOH) business made a strong comeback in 2022, recovering its pre‐covid base and delivering robust growth by revamping, resetting geography, channel and sales priority,” MD Suresh Narayan told investors.
