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

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

War Profits
Revealing a Potential 33x
Opportunity in Defence




**Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
**By submitting your email address, you also sign up for Profit Hunter, a Free-for-life newsletter from Equitymaster,
which offers the most profitable investing ideas in India.


AD

NESTLE 2020-21 Annual Report Analysis
Fri, 31 Dec

NESTLE has announced its results for the year ended December 2021. Let us have a look at the detailed performance review of the company during FY20-21.

NESTLE Income Statement Analysis

  • Operating income during the year rose 10.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 4.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 22.8% in CY21 as against 23.9% in CY20.
  • Depreciation charges increased by 5.3% and finance costs increased by 22.5% YoY, respectively.
  • Other income declined by 17.7% YoY.
  • Net profit for the year grew by 3.0% YoY.
  • Net profit margins during the year declined from 15.6% in CY20 to 14.6% in CY21.

NESTLE Income Statement 2020-21

No. of Mths Year Ending 12 Dec-20* 12 Dec-21* % Change
Net Sales Rs m 133,500 147,094 10.2%
Other income Rs m 1,508 1,241 -17.7%
Total Revenues Rs m 135,008 148,335 9.9%
Gross profit Rs m 31,966 33,511 4.8%
Depreciation Rs m 3,704 3,902 5.3%
Interest Rs m 1,642 2,012 22.5%
Profit before tax Rs m 28,128 28,838 2.5%
Tax Rs m 7,304 7,389 1.2%
Profit after tax Rs m 20,824 21,449 3.0%
Gross profit margin % 23.9 22.8
Effective tax rate % 26.0 25.6
Net profit margin % 15.6 14.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Potential 33x Opportunity: 3 Next-Generation Defence Stocks

NESTLE Balance Sheet Analysis

  • The company's current liabilities during CY21 stood at Rs 26 billion as compared to Rs 25 billion in CY20, thereby witnessing an increase of 4.4%.
  • Long-term debt down at Rs 275 million as compared to Rs 317 million during CY20, a fall of 13.4%.
  • Current assets fell 35% and stood at Rs 27 billion, while fixed assets rose 47% and stood at Rs 54 billion in CY21.
  • Overall, the total assets and liabilities for CY21 stood at Rs 82 billion as against Rs 79 billion during CY20, thereby witnessing a growth of 4%.

NESTLE Balance Sheet as on December 2021

No. of Mths Year Ending 12 Dec-20* 12 Dec-21* % Change
Networth Rs m 20,193 20,845 3.2
 
Current Liabilities Rs m 24,926 26,032 4.4
Long-term Debt Rs m 317 275 -13.4
Total Liabilities Rs m 78,798 81,841 3.9
 
Current assets Rs m 41,851 27,388 -34.6
Fixed Assets Rs m 36,947 54,453 47.4
Total Assets Rs m 78,798 81,841 3.9
* 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 CY21 stood at Rs 23 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during CY21 stood at Rs -20 billion, an improvement of 508.8% on a YoY basis.
  • Cash flow from financial activities (CFF) during CY21 stood at Rs -20 billion on a YoY basis.
  • Overall, net cash flows for the company during CY21 stood at Rs -17 billion from the Rs 2 billion net cash flows seen during CY20.

NESTLE Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Dec-20 Dec-21
Cash Flow from Operating Activities Rs m 24,545 22,714 -7.5%
Cash Flow from Investing Activities Rs m -3,215 -19,570 -
Cash Flow from Financing Activities Rs m -19,559 -20,186 -
Net Cash Flow Rs m 1,771 -17,043 -
* 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 222.4, an improvement from the EPS of Rs 216.0 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 16,820.0, stands at 75.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 84.4 times, while the price to sales ratio stands at 12.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 69.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Dec-20* 12 Dec-21*
Sales per share (Unadj.) Rs 1,384.6 1,525.6
TTM Earnings per share Rs 216.0 222.4
Diluted earnings per share Rs 216.0 222.5
Price to Cash Flow x 75.0 69.4
TTM P/E ratio x 88.6 75.9
Price / Book Value ratio x 75.0 84.4
Market Cap Rs m 1,514,228 1,759,584
Dividends per share (Unadj.) Rs 200.0 200.0
* 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 1.1x during CY21, from 1.7x during CY20. 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 deteriorated and stood at 15.3x during CY21, from 18.1x during CY20. 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 declined and down at 102.9% during CY21, from 103.1% during CY21. 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 146.1% during CY21, from 145.1% during CY20. 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 28.7% during CY21, from 28.5% during CY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Dec-20* 12 Dec-21*
Current ratio x 1.7 1.1
Debtors’ Days Days 5 4
Interest coverage x 18.1 15.3
Debt to equity ratio x 0.0 0.0
Return on assets % 28.5 28.7
Return on equity % 103.1 102.9
Return on capital employed % 145.1 146.1
* 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 down from Rs 17,277.1 to Rs 16,820.0, registering a loss of Rs 457.1 or around 2.6%.

Overall, the S&P BSE SENSEX is up 8.2% 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 19,551.3 per share. You can check out the latest share price performance of NESTLE here...

What was the revenue of NESTLE in CY21? How does it compare to earlier years?

The revenues of NESTLE stood at Rs 148,335 m in CY21, which was up 9.9% compared to Rs 135,008 m reported in CY20.

NESTLE's revenue has grown from Rs 100,039 m in CY17 to Rs 148,335 m in CY21.

Over the past 5 years, the revenue of NESTLE has grown at a CAGR of 10.3%.

What was the net profit of NESTLE in CY21? How does it compare to earlier years?

The net profit of NESTLE stood at Rs 21,449 m in CY21, which was up 3.0% compared to Rs 20,824 m reported in CY20.

This compares to a net profit of Rs 19,684 m in CY19 and a net profit of Rs 16,069 m in CY18.

Over the past 5 years, NESTLE net profit has grown at a CAGR of 15.0%.

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 decreased in CY21 and stood at Rs 22,714 m as compared to Rs 24,545 m in CY20.
  • Cash flow from investments decreased in CY21 and stood at Rs -19,570 m as compared to Rs -3,215 m in CY20.
  • Cash flow from financial activity decreased in CY21 and stood at Rs -20,186 m as compared to Rs -19,559 m in CY20.

Here's the cash flow statement of NESTLE for the past 5 years.

(Rs m)CY17CY18CY19CY20CY21
From Operations18,17820,52522,95324,54522,714
From Investments-1,306-524830-3,215-19,570
From Financial Activity-9,966-13,174-36,015-19,559-20,186
Net Cashflow6,9066,826-12,2331,771-17,043

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 stood at 22.8% in CY21 as against 23.9% in CY20.
  • Net profit margins declined from 15.6% in CY20 to 14.6% in CY21.
  • Debt to Equity ratio for CY21 stood at 0.0 as compared to 0.0 in CY20.

Here's the ratio/financial analysis of NESTLE for the past 5 years.

 CY17CY18CY19CY20CY21
Operating Profit Margin (%)21.323.223.623.922.8
Net Profit Margin (%)12.514.215.915.614.6
Debt to Equity Ratio (x)0.00.00.00.00.0

Equitymaster requests your view! Post a comment on "NESTLE 2020-21 Annual Report Analysis". Click here!