Nestlé Nigeria is projected to achieve ₦1.05 trillion in revenue in 2025, encouraged by steady naira performance, capacity expansion, and large market growth. However, the company faces another challenging year, with a net loss anticipated for the full year 2024 due to significant foreign exchange (FX) losses, according to CardinalStone, an investment research firm. In a recent analysis, CardinalStone stated, “While we maintain our expectation of a net loss for the full year 2024 (FY’24), we project a return to profitability in FY’25, supported by reduced foreign exchange volatility and continued revenue growth.”
Nestlé Nigeria’s financial performance reveals a deepening loss, with the company recording a ₦184.3 billion loss for the first nine months of 2024, compared to ₦43.1 billion in the same period of 2023. Despite this, revenue climbed to ₦665.3 billion during the same period, a significant rise from ₦396.6 billion in 2023. The revenue growth was fueled by price adjustments, increased production volumes, and strong market acceptance of new product offerings, including Maggi Signature Jollof, Maggi Soya Chunks, Nido Milk and Soya, Milo 3-in-1, and Cerelac Rice. The food segment contributed 63.8% of total revenue, while beverages accounted for 36.2%.
Nestlé Nigeria’s growth momentum is expected to carry forward into 2025, supported by moderate price adjustments, expanded distribution networks, and increased production capacity. Analysts at CardinalStone anticipate a revenue target of ₦1.05 trillion in 2025. Similarly, Bolade Agboola, Consumer Goods Analyst at ChapelHill Denham, expressed optimism, noting that a stable naira in 2025 could alleviate FX-related challenges. Agboola commented, “Nestlé Nigeria is likely to report an after-tax loss in 2024, primarily driven by FX losses, but we expect reduced volatility in 2025.”
The company has demonstrated its commitment to growth, investing ₦39.3 billion in capacity expansion and technological upgrades in the first nine months of 2024. These efforts have significantly enhanced production capabilities, enabling the company to meet increasing market demands. They have also implemented strategies to stop high production costs, such as energy efficiency measures and substituting imported inputs with locally sourced alternatives. However, analysts at Cordros Securities noted that while these measures are commendable, elevated cost pressures and FX losses will likely impact the company’s 2024 full-year earnings.
A majority (99.3%) of Nestlé Nigeria’s revenue comes from local sales, which amounted to ₦660.6 billion in the first nine months of 2024, while export sales contributed a modest ₦4.69 billion. The company’s strong performance in the domestic market emphasizes its durability, even as its cash and cash equivalents dropped significantly from ₦152.3 billion to ₦33.2 billion during the same period.
Despite the challenges, investor confidence remains steady. Nestlé Nigeria’s share price has appreciated from ₦830 at the beginning of the year to ₦932.7 as of January 2025, with its market capitalization standing at ₦693.6 billion.
Cordros Securities further highlighted the company’s strategic focus on launching innovative and affordable products and improving its distribution reach as key drivers for sustained growth in the coming years.
