Thread by @MlnDollarMinds

#Nestle - Analyst meet key takeaways @NestleIndia

Time for thread 👇🏻👇🏻👇🏻

@dmuthuk

(1/n)

Rural India will witness increased focus, aims to increase distribution to ~120,000 villages from 89,288 currently (2/n)

*Total reach*: has increased by ~18% to 4.7mn outlets between CY16 to CY20. In the same period, villages covered increased from 1000 to 89,288 and company aims to further increase coverage to ~120,000 villages i.e. 34% increase in next 4 years. (3/n)

*LUP*: contributed ~40% to revenues a few years back, which currently stands at 25% for products priced at lower end of the spectrum. In recent years, company has seen good demand for multi packs as compared to single packs.

(4/n)

*Channel*: E-Commerce channel continues to be high growing, increasing contribution from 0.6% in CY16 to 3.7% in CY20. Currently 87-90% of business comes from traditional (Kirana) channel and will continue to remain an important channel for the company.

(5/n)

*New Product Developments (NPD)*: have launched over 80 products over last 5 years, increasing their contribution from 1.5% in CY16 to 4.3% in CY20. This intensity will continue and currently company has over 40 new innovation projects in pipeline.

(6/n)

*Rural*: only 30-40% of SKU are present in rural and it is expected to increase through more innovations and customizations.

(7/n)

CY2020
1)Segmental Growth:
Milk products: 8.9%
Prepared dishes 11.4%
Confectionary 7%
liquid beverages 0.9%

2) Volume growth
Q1CY20 : 8.5%
Q2CY20 : (-)0.3%
Q3CY20 : 6.7%
Q4CY20: 7.8%

3) Double digit growth:
Maggi
KitKat
Milky-bar

(8/n)

management has committed Rs. 26bn investment to be carried out by over 3-4 years to augment existing manufacturing capacities and towards new construction of factory in Sanand, Gujarat. Even if minimum 2x Asset turnover is considered it will add ~40% to existing revenues.

(9/9)