Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  


NESTLE 2017-18 Annual Report Analysis
Mon, 31 Dec

NESTLE has announced its results for the year ended December 2018. Let us have a look at the detailed performance review of the company during FY17-18.

NESTLE Income Statement Analysis

  • Operating income during the year rose 14.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 24.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.2% in CY18 as against 21.3% in CY17.
  • Depreciation charges decreased by 1.9% and finance costs increased by 21.8% YoY, respectively.
  • Other income grew by 46.9% YoY.
  • Net profit for the year grew by 31.2% YoY.
  • Net profit margins during the year grew from 12.5% in CY17 to 14.2% in CY18.

NESTLE Income Statement 2017-18

No. of Mths Year Ending 12 Dec-17* 12 Dec-18* % Change
Net Sales Rs m 98,270 112,923 14.9%
Other income Rs m 1,769 2,600 46.9%
Total Revenues Rs m 100,039 115,522 15.5%
Gross profit Rs m 20,965 26,166 24.8%
Depreciation Rs m 3,423 3,357 -1.9%
Interest Rs m 919 1,120 21.8%
Profit before tax Rs m 18,393 24,290 32.1%
Tax Rs m 6,141 8,220 33.9%
Profit after tax Rs m 12,252 16,069 31.2%
Gross profit margin % 21.3 23.2
Effective tax rate % 33.4 33.8
Net profit margin % 12.5 14.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Read Now: We're Bullish on 2 Non-Nifty Stocks

NESTLE Balance Sheet Analysis

  • The company's current liabilities during CY18 stood at Rs 19 billion as compared to Rs 15 billion in CY17, thereby witnessing an increase of 24.3%.
  • Long-term debt down at Rs 351 million as compared to Rs 351 million during CY17, a fall of 0.0%.
  • Current assets rose 20% and stood at Rs 47 billion, while fixed assets fell 2% and stood at Rs 34 billion in CY18.
  • Overall, the total assets and liabilities for CY18 stood at Rs 81 billion as against Rs 74 billion during CY17, thereby witnessing a growth of 10%.

NESTLE Balance Sheet as on December 2018

No. of Mths Year Ending 12 Dec-17* 12 Dec-18* % Change
Networth Rs m 34,206 36,737 7.4
 
Current Liabilities Rs m 14,927 18,550 24.3
Long-term Debt Rs m 351 351 0.0
Total Liabilities Rs m 73,626 80,881 9.9
 
Current assets Rs m 39,374 47,370 20.3
Fixed Assets Rs m 34,252 33,511 -2.2
Total Assets Rs m 73,626 80,881 9.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



NESTLE Cash Flow Statement Analysis

  • NESTLE's cash flow from operating activities (CFO) during CY18 stood at Rs 21 billion, an improvement of 12.9% on a YoY basis.
  • Cash flow from investing activities (CFI) during CY18 stood at Rs -524 million on a YoY basis.
  • Cash flow from financial activities (CFF) during CY18 stood at Rs -13 billion on a YoY basis.
  • Overall, net cash flows for the company during CY18 stood at Rs 7 billion from the Rs 7 billion net cash flows seen during CY17.

NESTLE Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Dec-17 Dec-18
Cash Flow from Operating Activities Rs m 18,178 20,525 12.9%
Cash Flow from Investing Activities Rs m -1,306 -524 -
Cash Flow from Financing Activities Rs m -9,966 -13,174 -
Net Cash Flow Rs m 6,906 6,826 -1.2%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for NESTLE

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 166.7, an improvement from the EPS of Rs 127.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 11,107.3, stands at 66.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 29.2 times, while the price to sales ratio stands at 9.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 46.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Dec-17* 12 Dec-18*
Sales per share (Unadj.) Rs 1,019.2 1,171.2
TTM Earnings per share Rs 127.1 166.7
Diluted earnings per share Rs 127.1 166.7
Price to Cash Flow x 48.3 46.1
TTM P/E ratio x 61.7 66.6
Price / Book Value ratio x 19.5 24.4
Market Cap Rs m 665,317 896,078
Dividends per share (Unadj.) Rs 86.0 115.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for NESTLE

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.6x during CY18, from 2.6x during CY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 22.7x during CY18, from 21.0x during CY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company improved and stood at 43.7% during CY18, from 35.8% during CY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 68.5% during CY18, from 55.9% during CY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company improved and stood at 21.3% during CY18, from 17.9% during CY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Dec-17* 12 Dec-18*
Current ratio x 2.6 2.6
Debtors’ Days Days 3 4
Interest coverage x 21.0 22.7
Debt to equity ratio x 0.0 0.0
Return on assets % 17.9 21.3
Return on equity % 35.8 43.7
Return on capital employed % 55.9 68.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how NESTLE has performed over the last 5 years, please visit here.

NESTLE Share Price Performance

Over the last one year, NESTLE share price has moved up from Rs 6,681.2 to Rs 8,202.2, registering a gain of Rs 1,521.0 or around 22.8%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for NESTLE and quarterly results for NESTLE)

Annual Report FAQs

What is the current share price of NESTLE?

NESTLE currently trades at Rs 2,623.3 per share. You can check out the latest share price performance of NESTLE here...

What was the revenue of NESTLE in CY18? How does it compare to earlier years?

The revenues of NESTLE stood at Rs 115,522 m in CY18, which was up 15.5% compared to Rs 100,039 m reported in CY17.

NESTLE's revenue has grown from Rs 88,662 m in CY13 to Rs 115,522 m in CY18.

Over the past 6 years, the revenue of NESTLE has grown at a CAGR of 5.4%.

What was the net profit of NESTLE in CY18? How does it compare to earlier years?

The net profit of NESTLE stood at Rs 16,069 m in CY18, which was up 31.2% compared to Rs 12,252 m reported in CY17.

This compares to a net profit of Rs 10,014 m in CY16 and a net profit of Rs 11,847 m in CY14.

Over the past 6 years, NESTLE net profit has grown at a CAGR of 7.5%.

What does the cash flow statement of NESTLE reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of NESTLE reveals:

  • Cash flow from operations increased in CY18 and stood at Rs 20,525 m as compared to Rs 18,178 m in CY17.
  • Cash flow from investments increased in CY18 and stood at Rs -524 m as compared to Rs -1,306 m in CY17.
  • Cash flow from financial activity decreased in CY18 and stood at Rs -13,174 m as compared to Rs -9,966 m in CY17.

Here's the cash flow statement of NESTLE for the past 6 years.

(Rs m)CY13CY14CY16CY17CY18
From Operations17,96416,44014,65918,17820,525
From Investments-4,409-4,317-1,259-1,306-524
From Financial Activity-5,801-16,353-6,656-9,966-13,174
Net Cashflow7,753-4,2306,7446,9066,826

What does the Key Ratio analysis of NESTLE reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of NESTLE reveals:

  • Operating profit margins witnessed a fall and down at 23.2% in CY18 as against 21.3% in CY17.
  • Net profit margins grew from 12.5% in CY17 to 14.2% in CY18.
  • Debt to Equity ratio for CY18 stood at 0.0 as compared to 0.0 in CY17.

Here's the ratio/financial analysis of NESTLE for the past 6 years.

 CY13CY14CY16CY17CY18
Operating Profit Margin (%)22.421.520.921.323.2
Net Profit Margin (%)12.712.411.412.514.2
Debt to Equity Ratio (x)0.50.00.00.00.0

Read: Latest Annual Report Analysis of NESTLE

 

Equitymaster requests your view! Post a comment on "NESTLE 2017-18 Annual Report Analysis". Click here!