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Nestle India ends ’17 with total sales of approximately Rs 10,135 crore
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Friday, 16 February, 2018, 08 : 00 AM [IST]
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Our Bureau, New Delhi
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Nestle India ended 2017 strongly, with total sales amounting to about 10,135 crore, which was a historic milestone. The company’s board of directors met at Nestle House and approved the results for the full year. Suresh Narayanan, chairman and managing director, said, “It was a year in which we had to adapt to significant changes in the external environment.”
“With its continuous thrust on innovation and renovation, the company, which is over 105 years old in India, launched 15 products last year. These include Maggi Nutri-licious Noodles, Milkybar Moosha, Kit Kat Dessert Delight, Milo RTD and new variants of Grekyo,” he added.
Narayanan stated that it completed three years since the commencement of the Nestle Healthy Kids Programme, in association with Magic Bus India Foundation. “It has already benefited over 1,50,000 adolescents,” he added.
Highlights for the full year 2017
In accordance with Ind AS 18 on revenue and Schedule III to the Companies Act, 2013, sales for the previous year, ended 31 December 2016, and for the period between January 1 and June 30, 2017 were reported gross of excise duty and net of value-added tax (VAT)/sales tax. Excise duty was reported as a separate expense line item.
Consequent to the introduction of Goods and Services Tax (GST) with effect from July 1, 2017, VAT/sales tax, excise duty etc. have been subsumed into GST, and accordingly, the same is not recognised as a part of sales as per the requirements of Ind AS 18.
This has resulted in lower reported sales in the current year in comparison to the sales reported under the pre-GST structure of indirect taxes. With the change in structure of indirect taxes, expenses are also being reported net of taxes.
Accordingly, financial results for the quarter and year ended December 31, 2017, and in particular, sales, absolute expenses, elements of working capital (inventories, trade payable, other current assets/current liabilities etc.) and ratios in percentage of sales are not comparable with the corresponding periods.
Profit from operations in percentage of sales and net profit in percentage of sales were positively impacted as the percentages were calculated on lower reported sales.
Total sales and domestic sales for the year increased by 7.7 per cent and 8.2 per cent, respectively. These growth rates are adversely impacted due to lower reported sales by the change in structure of indirect taxes and reduction in realisations to pass on the GST benefits.
On a comparable basis the domestic sales growth was estimated at 11.8 per cent due to increase in volumes, including the rebuild of Maggi Noodles, supplemented by better underlying realisations. Export sales increased by 0.9 per cent.
Profit from operations and net profit in percentage of sales were positively impacted by 60 basis points (bps) and 40 bps, respectively, as the percentages were calculated on lower reported sales.
Highlights for the quarter ended 31st December, 2017
Total sales and domestic sales for the quarter increased by 10.9 per cent and 10.8 per cent, respectively, on a base impacted by the withdrawal of high-denomination currency notes in circulation.
These growth rates were adversely impacted due to lower reported sales by the change in structure of indirect taxes and reduction in realisation to pass on the GST benefits.
On a comparable basis, the domestic sales growth was estimated at 18.1 per cent due to the increase in volumes including the rebuild of Maggi Noodles, supplemented by better underlying realisations coming from previous periods. Export sales increased by 12.7 per cent.
Profit from operations and net profit in percentage of sales were positively impacted by 110 bps and 70 bps, respectively, as the percentages were calculated on lower reported sales.
Dividend
The board of directors recommended a final dividend of Rs 23 per equity share, amounting to Rs 2,217.6 million for the year 2017. The total dividend for 2017 aggregated to Rs 86 per equity share, which included three interim dividends of Rs 15 per equity share paid on June 2, 2017, Rs 15 per equity share paid on August 16, 2017 and Rs 33 per equity share paid on December 22, 2017.
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