Nestle

Pakistan
Resource Person Presented by

Sir Abdul Kareem Mohammad Hassan

MBA 6th (2012-15)
 Introduction

Nestle Pakistan Limited is a Pakistan

based food and beverages company.

The Company is engaged in

manufacturing, processing and sale of food
products.
 Introduction Cont.
…
Started its' business life with only one

product and that was condensed milk

for infants named as Farine Lactée

Nestlé.
 Founder

Henri Nestle (1814 - 1890)

 History of Nestle Pakistan

The Company was formed in 1905 by Anglo-

Swiss Milk Company. The brothers George Page,
Clarks Page and Farine Lactee were the owners.

Nestlé in Pakistan is operating since

1988 under a joint venture with MilkPak ltd
and took over management in 1992.
 CEO Nestle Pak

Bruno Olierhoek

Managing Director

and C.E.O of Nestlé

Pakistan
 Nestle Headquarter

Nestlé Headquarter is in Vevey,

Switzerland, situated on Lake
Geneva.

Nestle Corporate office is in Lahore.

 Factories

Sheikhupura Factory

Khanewal Factory

Islamabad water factory

Port Qasim Water Factory

Nestle Products
Ambient Dairy
Chilled Dairy
Juices
Bottled water
Culinary & Food
Baby Food
Breakfast Cereals
Coffee
Confectionery
Income Statement Vertical Analysis Horizontal Analysis
Years 2014 2013 2012 2011 2010 2009 2014 2013 2012 2011 2010 2009

Sales – net 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 234.37% 209.51% 192.17% 157.51% 125.10% 100.00%

Cost of goods
71.67% 71.98% 72.79% 74.20% 73.04% 71.09% 236.30% 212.14% 196.75% 164.40% 128.55% 100.00%
sold
Gross profit 28.33% 28.02% 27.21% 25.80% 26.96% 28.91% 229.63% 203.05% 180.89% 140.56% 116.64% 100.00%

Distribution and
11.49% 12.45% 11.11% 10.59% 11.09% 12.73% 211.62% 204.86% 167.75% 130.99% 108.98% 100.00%
sellingexpenses
Administration
2.20% 2.27% 2.24% 2.17% 2.55% 2.64% 195.84% 180.44% 163.10% 129.51% 120.87% 100.00%
expenses
Operatingprofit 14.63% 13.30% 13.87% 13.05% 13.32% 13.55% 253.14% 205.75% 196.69% 151.70% 123.00% 100.00%

Finance cost 2.23% 2.45% 2.31% 1.62% 1.00% 1.07% 487.65% 478.02% 413.52% 237.61% 116.07% 100.00%

Other operating
1.53% 1.67% 1.67% 1.64% 1.59% 2.65% 134.95% 131.95% 121.00% 97.53% 75.07% 100.00%
expenses
Other operating
0.54% 0.23% 0.20% 0.25% 0.33% 0.35% 363.45% 134.98% 111.10% 110.68% 118.28% 100.00%
income
Profit before
11.41% 9.41% 10.09% 10.03% 11.06% 10.17% 262.98% 193.80% 190.58% 155.34% 136.07% 100.00%
taxation
Taxation 3.19% 2.60% 2.67% 2.83% 3.08% 2.87% 260.76% 190.17% 178.94% 155.32% 134.05% 100.00%

Profit after
8.22% 6.80% 7.42% 7.20% 7.99% 7.30% 263.86% 195.22% 195.15% 155.35% 136.86% 100.00%
taxation
 10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%

0.00%
71.67%
71.98%
72.79%
74.20%
73.04%

C.O .G .S
71.09%

28.33%
28.02%
27.21%
25.80%

G .P
26.96%
28.91%

13.69%
14.72%
13.35%
2014

12.76%

O .E
13.64%
15.37%

14.63%
13.30%
13.87%
2013

13.05%

O .P
13.32%
13.55%

2.23%
2.45%
2.31%
2012

1.62%
Fin. C

1.00%
1.07%

11.41%
9.41%
10.09%
2011

10.03%
E.B.T

11.06%
10.17%
Income Statement Vertical Analysis

3.19%
2.60%
2.67%
2.83%
2010

Tax

3.08%
2.87%

8.22%
6.80%
7.42%
7.20%
2009

E.A.T

7.99%
7.30%
 0.00%
100.00%
200.00%
300.00%
400.00%
500.00%
600.00%

234.37%
209.51%
192.17%
157.51%

Sales
125.10%
100.00%
2014

236.30%
212.14%
196.75%
164.40%
128.55%

C .O.G .S
100.00%

229.63%
2013

203.05%
180.89%
140.56%

G .P
116.64%
100.00%

307.46%
285.30%
230.85%
160.50%
2012

O.E
129.85%
100.00%

253.14%
205.75%
196.69%
151.70%
O.P 123.00%
100.00%
2011

487.65%
478.02%
413.52%
237.61%
116.07%
Fi n . C

100.00%
2010

262.98%
193.80%
190.58%
155.34%
E.B.T

136.07%
100.00%
Income Statement Horizontal Analysis

260.76%
190.17%
178.94%
2009

155.32%
Ta x

134.05%
100.00%

263.86%
195.22%
195.15%
155.35%
E.A .T

136.86%
100.00%
Balance Sheet
2014 2013 2012 2011 2010 2009 2014 2013 2012 2011 2010
ASSETS
Current assets
Stores and spares 2.34% 2.44% 2.70% 3.63% 4.58% 4.68% 139.08% 146.55% 158.03% 147.12% 120.92%
Stock in trade 18.87% 15.16% 15.68% 20.08% 20.05% 20.96% 250.68% 203.47% 204.87% 181.36% 118.15%
Trade debts 0.53% 0.66% 0.97% 0.79% 0.55% 1.30% 112.66% 143.16% 203.48% 114.54% 52.33%
Current long term loans 0.15% 0.11% 0.09% 0.09% 0.08% 0.11% 362.09% 265.49% 217.66% 147.13% 91.13%
Advances & other
13.26% 14.56% 12.20% 11.49% 8.93% 8.09% 456.33% 506.71% 413.05% 268.97% 136.32%
receivables
Cash and bank balances 0.44% 1.38% 1.50% 2.00% 2.20% 1.70% 71.62% 228.03% 240.94% 222.32% 160.09%
Total Current Assets 35.58% 34.30% 33.13% 38.08% 36.39% 36.83% 268.87% 262.02% 246.28% 195.68% 122.02%
Tangible Fixed Assets
PP&E 59.06% 60.18% 43.17% 46.14% 49.54% 57.57% 285.49% 294.07% 205.32% 151.67% 106.26%
Capital work-in-progress 4.32% 4.50% 22.70% 15.27% 13.40% 4.92% 244.16% 257.01% 1262.31% 586.97% 336.24%
Total Tangible Assets 63.37% 64.68% 65.87% 61.40% 62.94% 62.49% 282.24% 291.15% 288.58% 185.96% 124.37%
Intangible assets 0.00% 0.00% 0.01% 0.03% 0.07% 0.04% 0.00% 33.66% 100.94% 168.22% 235.51%
Goodwill 0.32% 0.32% 0.20% 0.00% 0.00% 0.00% 167.55% 167.55% 104.18% 0.00% 0.00%
Long term loans & advances 0.61% 0.56% 0.47% 0.46% 0.55% 0.61% 279.85% 257.56% 208.51% 142.73% 110.74%
Long term security deposits 1.70% 1.74% 2.99% 0.40% 0.58% 0.33% 1106.23% 1419.98% 1963.05% 195.32% 195.32%
Total Intangible Assets 1.05% 1.02% 0.88% 0.52% 0.66% 0.68% 430.45% 424.77% 355.55% 146.27% 121.18%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 278.32% 281.32% 273.79% 189.27% 123.49%
 Balance
Sheet
LIABILITIES AND EQUITY
Current Liabilities
Current as non-current liab. 5.96% 9.24% 0.08% 0.12% 0.25% 7.11% 233.13% 365.37% 3.15% 3.14% 4.37%
Short term borrowings 7.76% 0.00% 7.67% 14.07% 9.34% 11.33% 190.65% 0.00% 185.24% 235.11% 101.82%
Short term running finance 11.50% 6.42% 11.67% 11.87% 12.12% 4.07% 786.65% 443.78% 784.99% 552.02% 367.66%
Customer security deposits 0.43% 0.35% 0.36% 0.43% 0.56% 0.57% 209.07% 172.19% 174.52% 141.73% 121.92%
Trade and other payables 27.76% 17.91% 19.15% 20.87% 20.19% 20.16% 383.36% 250.03% 260.09% 196.02% 123.69%
Interest and mark-up accrued 0.29% 0.50% 0.39% 0.36% 0.27% 0.25% 314.29% 561.48% 417.94% 273.17% 130.71%
Total Current Liabilities 53.70% 34.43% 39.32% 47.72% 42.73% 43.49% 343.64% 222.70% 247.47% 207.70% 121.32%
Non-current liabilities
Long term finances 13.44% 33.40% 30.21% 22.31% 24.28% 22.65% 165.09% 414.77% 364.95% 186.38% 132.37%
Deferred taxation 6.31% 7.85% 6.49% 7.04% 7.43% 8.24% 213.02% 267.77% 215.68% 161.68% 111.33%
Retirement benefits 2.15% 1.65% 1.25% 1.25% 1.00% 1.16% 514.53% 399.40% 295.47% 203.95% 106.11%
Liabilities against assets 0.00% 0.00% 0.00% 0.04% 0.24% 0.64% 0.00% 0.00% 0.00% 11.57% 46.85%
Total Noncurrent Liab. 21.89% 42.89% 37.96% 30.64% 32.95% 32.69% 186.38% 369.09% 317.75% 177.38% 124.47%
Share Capital and Reserves
Authorized capital 1.45% 1.43% 1.47% 2.13% 3.27% 4.04% 100.00% 100.00% 100.00% 100.00% 100.00%
Issued and paid up capital 0.88% 0.87% 0.89% 1.29% 1.98% 2.44% 100.00% 100.00% 100.00% 100.00% 100.00%
Share premium 0.48% 0.48% 0.49% 0.71% 1.09% 1.34% 100.00% 100.00% 100.00% 100.00% 100.00%
General reserve 0.54% 0.54% 0.55% 0.80% 1.22% 1.51% 100.00% 100.00% 100.00% 100.00% 100.00%
Accumulated profit 22.54% 20.80% 20.79% 18.84% 20.04% 18.53% 338.53% 315.81% 307.13% 192.49% 133.53%
Total Equity 24.41% 22.68% 22.72% 21.64% 24.32% 23.82% 285.24% 267.89% 261.13% 171.96% 126.09%
Total Equity& Liabilities 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 278.32% 281.32% 273.70% 189.27% 123.49%
 100.00%
120.00%

20.00%
40.00%
60.00%
80.00%

0.00%
35.58%
34.30%
33.13%
38.08%
36.39%
36.83%

64.42%
65.70%
66.75%
61.92%
63.61%
63.17%

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

53.70%
34.43%
39.32%
47.72%
42.73%
43.49%

21.89%
42.89%
37.96%
30.64%
32.95%
32.69%
Balance Sheet Vertical Analysis

24.41%
22.68%
22.72%
21.64%
24.32%
23.82%

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
2009
2010
2011
2012
2013
2014
 100.00%
150.00%
200.00%
250.00%
300.00%
350.00%
400.00%

50.00%

0.00%
268.87%
262.02%
246.28%
195.68%
122.02%
2014

100.00%

283.82%
292.58%
2013

289.29%
185.54%
124.34%
100.00%
2012

278.32%
281.32%
273.79%
189.27%
123.49%
2011

100.00%

343.64%
222.70%
2010

247.47%
207.70%
121.32%
100.00%
2009

186.38%
369.09%
317.75%
177.38%
124.47%
100.00%
Balance Sheet Horizontal Analysis

285.24%
267.89%
261.13%
171.96%
126.09%
100.00%

278.32%
281.32%
273.70%
189.27%
123.49%
100.00%
 Liquidity Ratios
Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever

Years 2014 2014 2013 2013 2012 2012 2011 2011 2010 2010 2009 2009

Current
0.66 0.61 1.00 0.68 0.84 0.96 0.80 0.88 0.85 1.09 0.85 0.88
ratio

Quick
ratio
0.02 0.28 0.06 0.35 0.06 0.38 0.06 0.38 0.06 0.54 0.07 0.39

Cash
ratio

0.01 0.05 0.04 0.16 0.04 0.15 0.04 0.08 0.05 0.12 0.04 0.06
 0.2
0.4
0.6
0.8
1.2

0
1
0.66
0.61
1
0.68
0.84
0.96
0.8
0.88

Current Rati o
0.85
1.09
0.85
0.88

0.02
0.28
0.06

Quick Rati o
0.35
Nestle 2010
Nestle 2012
Nestle 2014

0.06
0.38
0.06
0.38
0.06
Liquidity Rati o

0.54
0.07
0.39
Unilever2014

Unilever 2010
Unilever 2012

Nestle 2014; 0.01

Unilever2014; 0.05
Nestle 2013; 0.04
Cash Rati o

Unilever 2013; 0.16

Nestle 2012; 0.04
Nestle 2009
Nestle 2011
Nestle 2013

Unilever 2012; 0.15

Nestle 2011; 0.04
Unilever 2011; 0.08
Nestle 2010; 0.05
Unilever 2010; 0.12
Nestle 2009; 0.04
Unilever 2009; 0.06
Unilever 2009
Unilever 2011
Unilever 2013
 Activity Ratios
Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever

Years 2014 2014 2013 2013 2012 2012 2011 2011 2010 2010 2009 2009

Account Receivable Turnover

311.98 40.23 205.82 42.31 205.77 35.03 321.42 34.65 279.66 45.85 340.53 52.10

Account Receivable Turnover in Days 1.17 9.07 1.77 8.63 1.77 10.42 1.14 10.53 1.31 7.96 1.07 7.01

Days Sales Inventory 51.55 70.00 46.61 53.53 50.60 75.44 37.30 71.80 44.66 52.16 48.59 57.42

Inventory Turnover Times 7.82 6.14 7.80 6.03 7.65 5.40 8.25 6.34 8.85 7.24 15.02 6.18

Inventory Turnover in Days

46.70 59.49 46.77 60.57 47.69 67.54 44.26 57.57 41.23 50.39 24.30 59.01

Operating Cycle Days 47.87 68.57 48.54 69.19 49.47 77.96 45.40 68.11 42.54 58.35 25.37 66.02

Total Asset Turnover 1.85 2.69 1.67 3.21 1.84 3.11 2.23 3.46 2.48 3.92 4.43 3.39

Operating Asset turnover 2.29 2.77 2.32 3.34 2.73 3.25 3.03 3.67 3.06 4.25 5.07 3.70
 Activity Ratios
80

67.54
70
Nestle 2014 Unilever2014 Nestle 2013 Unilever 2013

60.57
59.49

59.01
57.57
60

Nestle 2012 Unilever 2012 Nestle 2011 Unilever 2011

50.39
47.69
50

46.77
46.7

44.26
Nestle 2010 Unilever 2010 Nestle 2009 Unilever 2009

41.23
40

30

24.3
20
15.02
10.53
10.42
9.07

8.85
8.63

8.25
7.96

7.82

10
7.65

7.24
7.01

7.8

6.34

6.18
6.14

6.03

5.07
5.4

4.43

4.25
3.92

3.67
3.46

3.39

3.34

3.25
3.21

3.11

3.06
3.03

3.7
2.77

2.73
2.69

2.48

2.32
2.29
2.23
1.85

1.84
1.77

1.77

1.67
1.31
1.17

1.14

1.07

0
A / R Tu r n o ve r i n Days In v. Tu r n o ve r T. A sse t s Tu r n o ve r O p r a. A sse t t u r n o ve r In v. Tu r n o ve r i n Days
 Profitability Ratios
Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever

Years 2014 2014 2013 2013 2012 2012 2011 2011 2010 2010 2009 2009

Gross profit
margin
28.33% 43.15% 28.02% 41.78% 27.21% 38.06% 25.80% 38.96% 26.96% 37.98% 28.91% 37.15%

Net profit
margin
13.11% 15.06% 11.63% 14.42% 12.20% 12.45% 11.41% 12.48% 11.73% 10.83% 10.90% 5.24%

Return on
Assets
0.24 0.60 0.19 0.68 0.22 0.57 0.25 0.64 0.29 0.64 0.48 0.27

Return on
fixed assets
3.11 1.15 3.23 1.57 4.14 1.45 4.70 1.64 4.67 1.74 7.69 0.60

Return on
investment
0.65 1.16 0.50 1.10 0.61 0.78 0.71 0.84 0.82 0.85 1.36 0.44

Return on
total equity
0.65 1.90 0.50 1.92 0.61 1.34 0.71 1.38 0.82 1.30 1.36 0.62

Sales to fixed
assets
2.29 5.15 2.32 7.41 2.73 7.88 3.03 8.86 3.06 10.65 5.07 7.73

Return on
operating 0.30 0.62 0.27 0.71 0.33 0.60 0.35 0.68 0.36 0.69 0.55 0.29
assets
 Profi tablity Ratio
43.15%
Nestle 2014 Unilever2014

41.78%
Nestle 2013 Unilever 2013

38.96%
38.06%

37.98%

37.15%
Nestle 2012 Unilever 2012
Nestle 2011 Unilever 2011
Nestle 2010 Unilever 2010

28.91%
28.33%

28.02%

27.21%

26.96%
25.80%
Nestle 2009 Unilever 2009

15.06%

14.42%
13.11%

12.48%
12.45%
12.20%

11.73%
11.63%

11.41%

10.90%
10.83%

5.24%
Gr o ss p r o fi t m ar gin N e t p r o fi t m ar gi n
 Profi tablity Ratio

7.69
Nestle 2014 Unilever2014 Nestle 2013 Unilever 2013 Nestle 2012

Unilever 2012 Nestle 2011 Unilever 2011 Nestle 2010 Unilever 2010

Nestle 2009 Unilever 2009

4.67
4.7
4.14
3.23
3.11
1.92
1.9

1.74
1.64
1.57

1.45
1.38
1.36

1.36
1.34

1.3
1.16

1.15
1.1

0.85
0.84
0.82

0.82
0.78
0.71

0.71

0.71

0.69
0.68

0.68
0.65

0.65
0.64

0.64

0.62

0.62
0.61

0.61
0.57

0.55
0.6

0.6

0.6
0.48

0.44
0.5

0.5

0.36
0.35
0.33
0.29

0.29
0.27

0.27
0.25
0.24

0.22

0.3
0.19

Re t u rn o n A s s e t s Re t u rn o n i n v e s t m e n t Re t u rn o n t o t al e q u i t y Re t u rn o n o p e rati n g as s e t s Re t u rn o n fi x e d as s e t s
 Debt Ratios
Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever

Years 2014 2014 2013 2013 2012 2012 2011 2011 2010 2010 2009 2009

Debt
0.76 0.77 0.77 0.81 0.77 0.70 0.78 0.73 0.76 0.63 0.76 0.72
Ratio

Debt/
Equity 3.10 3.42 3.41 4.17 3.40 2.37 3.62 2.62 3.11 1.69 3.20 2.63
Ratio

Times
Interest 44.75 34.94 40.81 162.88 43.27 133.93 61.72 133.61 100.35 52.88 93.10 11.73
Earned
 Debt Rati o

4.17
Nestle 2014 Unilever2014 Nestle 2013 Unilever 2013 Nestle 2012
Unilever 2012 Nestle 2011 Unilever 2011 Nestle 2010 Unilever 2010

3.62
Nestle 2009 Unilever 2009

3.42

3.41

3.4

3.2
3.11
3.1

2.63
2.62
2.37

1.69
0.81

0.78
0.77

0.77

0.77
0.76

0.76

0.76
0.73

0.72
0.7

0.63

Deb t Ra ti o Deb t / eq u i t y r a ti o
 Investor Ratios
Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever Nestle Unilever

Years 2014 2014 2013 2013 2012 2012 2011 2011 2010 2010 2009 2009

Earnings per share 174.85 190.46 129.37 162.97 129.32 118.53 102.94 100.15 90.69 71.04 66.27 28.71

Price/earnings ratio 39.74 46.62 34.82 57.07 21.11 36.28 21.15 17.08 12.25 15.55 12.04 45.28

Dividend payout 0.89 0.49 0.93 1.00 0.31 0.98 0.53 1.00 0.72 1.00 0.98 1.18

Percentage of earning
0.11 0.51 0.07 0.00 0.69 0.02 0.47 0.00 0.28 0.00 0.02 (0.18)
retained

Dividend yield 0.02 0.01 0.03 0.02 0.01 0.03 0.03 0.06 0.06 0.06 0.00 0.03

Book value per share 278.45 127.22 261.50 73.03 254.91 96.75 167.86 79.82 123.08 65.67 97.62 43.63

Degree of financial leverage 1.20 1.03 1.26 1.01 1.23 1.01 1.16 1.01 1.09 1.02 1.11 1.09
 Inve st or Rati o

278.45
Nestle 2014 Unilever2014 Nestle 2013 Unilever 2013 Nestle 2012 Unilever 2012

261.5

254.91
Nestle 2011 Unilever 2011 Nestle 2010 Unilever 2010 Nestle 2009 Unilever 2009
190.46
174.85

167.86
162.97
129.37

129.32

127.22

123.08
118.53
102.94
100.15

97.62
96.75
90.69

79.82
73.03
71.04
66.27

65.67
57.07
46.62

45.28

43.63
39.74

36.28
34.82
28.71

21.15
21.11

17.08

15.55
12.25

12.04
E a r n i n g s p er sh a r e P r i c e/ ea r n i n g s r a ti o B o o k v a l u e p er sh a r e
 Investor Ratio
Nestle 2014 Unilever2014 Nestle 2013 Unilever 2013 Nestle 2012 Unilever 2012 Nestle 2011 Unilever 2011
Nestle 2010 Unilever 2010 Nestle 2009 Unilever 2009

1.18
0.98

0.98
0.93
1

1
0.89

0.72

0.69
0.53

0.51
0.49

0.47
0.31

0.28
0.11

0.07

0.06
0.06
0.06
0.03

0.03
0.03

0.03
0.02

0.02

0.02

0.02
0.01

0.01
0

0
Di vi de nd payout Pe r ce nt age of e ar ni ng r e t ai ne d Di vi de nd yi e l d

-0.18
CONCLUSION