Nestlé (Malaysia) Berhad has been a significant commercial presence in Malaysia since its inception in 1912. Over the years, it has grown to become a household name, offering a wide array of products that cater to the diverse tastes and preferences of Malaysian consumers.
Among its popular brands, MILO, MAGGI, and NESCAFÉ stand out as staples in many Malaysian households. MILO, a chocolate malt beverage, has become synonymous with breakfast and sports energy drinks. MAGGI, known for its instant noodles and culinary solutions, is a go-to for quick and tasty meals. NESCAFÉ, a leading coffee brand, offers a range of instant coffee products that cater to various taste preferences.
I attended the company’s most recent annual general meeting to find out more about its past year’s performance and its near-term outlook moving forward. Here are eight things I learned from the 2024 Nestlé Malaysia AGM.
1. Nestlé Malaysia reported a revenue of RM7.1 billion, a 5.8% increase from 2022, despite rising commodity costs, unfavourable currency rates and consumer sentiment. The growth was driven primarily by domestic sales, which grew over 9.9%. Net profit after tax stands at RM660 million, up 6.4% from 2022.
2. For FY2023, a total dividend of RM2.68 per share was declared. This reflects the company’s commitment to delivering value to shareholders through consistent dividend payments, adhering to its policy of distributing 95% of profits as dividends annually.
3. The company acknowledged shareholders’ concerns regarding the impact of recent boycotts on some international brands but reassured investors that Nestlé remains among the most trusted brand in Malaysia. The CEO emphasized that Nestlé continues to hold leading market shares, as Malaysians consistently purchase its products in large numbers.
4. Nestlé Malaysia is actively pursuing initiatives to source more raw materials locally. For example, the recent launch of KIT KAT Dark Borneo utilized Malaysian cocoa beans from Sabah and Sarawak. This effort aims to mitigate supply chain disruptions and support local communities.
5. Some shareholders have expressed concerns about the tripling of cocoa prices and the company’s strategies to address this issue. The company is focusing on prudent pricing strategies that balance rising input costs with consumer affordability concerns. The CEO mentioned that while some product prices have been increased, it is not a widespread hike across all products. Management will closely monitor internal costs and take necessary actions to mitigate the impact of commodity cost fluctuations. Collaborating with more local suppliers is one of their approaches to managing these challenges.
6. Nestlé Malaysia emphasized its strong commitment to continuous product innovation and adapting to evolving consumer preferences. The CEO highlighted the company’s robust pipeline of new product launches across various categories. In addition to the KitKat Dark Borneo mentioned above, the company plans to expand its plant-based offerings under the Harvest Gourmet brand to meet the growing demand for environmentally conscious choices. Furthermore, Nestlé is enhancing its MILO brand by improving its nutritional profile to meet the criteria for the Healthier Choice logo, all while maintaining its beloved flavours.
7. Nestlé Malaysia has made significant strides in reducing its plastic footprint, with management reporting that 90% of its packaging is now designed for recycling. For example, the company uses recycled polyethylene terephthalate (rPET) for MILO cups and paper for MAGGI bowls. Additionally, Nestlé has transitioned to sustainable paper straws, eliminating 1 billion plastic straws since 2020.
8. Shareholders inquired about the possibility of a share split to make shares more affordable for trading. However, the company prefers to maintain its focus on delivering consistent and attractive dividends to shareholders. Management clarified that there are currently no plans for a share split.
The fifth perspective
Despite rising commodity costs and fluctuating consumer sentiment, Nestlé Malaysia has demonstrated robust financial performance and a solid commitment to maintaining its dividends. The company’s dedication to innovation and continuous investment in local operations underscores its long-term vision for growth. Nestlé Malaysia has proven to be and continues to be a leading brand in the Malaysian market.
Liked our analysis of this AGM? Click here to view a complete list of AGMs we’ve attended »
