Nestle Malaysia has crossed the threshold of RM5 billion in revenue, with a turnover of RM5.1 billion for the year. This represents a 4.7% increase from RM4.8 billion in the previous year. The company, in a press release, stated that efforts in product innovations in tandem with marketing and trade promotions has contributed to this growth. Higher domestic sales was also a key contributor.
The company’s gross profit for the year saw an increase of 7.1% which contributed to the higher turnover resulting in favourable commodity prices and stronger operational efficiency in the factories and supply chain. This profit has been partially re-invested into creating stronger marketing, trade promotions and new product launches.
Overall, the group’s business approach to drive long-term growth increased the operating profit by 5.1% to RM799 million in 2016, with profit rising by 7.9% to RM 637 million.
The company in its fourth quarter recorded a higher turnover of RM 1.25 billion, which is an increase of 4.2% from the previous year’s corresponding quarter. However, despite the high turnover for fourth quarter last year, the profit remained lower due to the planned and exceptionally higher marketing and trade investments.
Alois Hofbauer, chief executive officer of Nestlé Malaysia highlighted that the company will maintain focus on realising efficiency increases across our operations. These improvements will be reinvested into the sustainable growth of the group through product innovation and renovation drive, coupled with consumer and trade promotions.
“We have achieved a strong performance in 2016 despite a challenging market. Our solid strategy has enabled us to spur growth during the year. This propelled us forward as we focused on enhancing efficiencies and boosting innovation in response to the needs of our consumers,” Hofbauer said.
“We have also implemented new innovative business models. We launched the first Kit Kat Chocolatory in Southeast Asia, and have continued to grow our e-commerce business. These efforts have collectively enabled us to strengthen our market share in key product categories,” he added.
Recently, a research by MIDF Amanah Investment Bank Bhd’s research arm (MIDF Research) highlighted that “aggressive advertising” has delivered strong growth in the domestic segment.