Nestle: thread
RAJESH DESAI
Nestle:
I am starting a thread for each company I am tracking and shall post all updates in the respective threads. All members are requested to also post reports, views and updates in these threads.
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products, acts of God and their pricing, product demand and supply constraints.
reports are atch.
--
CA. Rajesh Desai
RAJESH DESAI
Nestle SA may sell as much as $1.8 billion of the infant-nutrition assets it is buying from Pfizer Inc. as antitrust concerns in countries such as Mexico force divestitures, said people with knowledge of the matter.
ZURICH: Swiss food group Nestle will buy US drugmaker Pfizer's nutrition business for $11.85 billion, beating out French rival Danone as both battle to gain preeminence in the lucrative baby food market.
Nestle, the world's biggest packaged food company, was already seen as a favoured bidder due largely to its deep pockets, and is paying for the acquisition in cash.
The Vevey-based firm expects the acquisition will generate sales of $2.4 billion this year and boost margins, thanks to its large exposure to emerging markets, where the population is growing quickly.
"Its strong brands and product portfolio, its talented people dedicated to the success of its business, together with its geographic presence - 85 per cent of its sales are in emerging markets - will complement our existing infant nutrition business perfectly," Nestle Chief Executive Paul Bulcke said on Monday.Pfizer has moved to unload peripheral entities in recent months in order to focus on its core medicine business.
Pfizer put its infant nutrition and animal health businesses up for sale last July as it looks to focus on its core pharmaceuticals business.
In November its patent on the best-selling drug of all time, the cholesterol-lowering medication Lipitor, expired, opening the path to generic competitors for America's most popular medication.--
On Wed, Apr 18, 2012 at 3:12 PM, RAJESH DESAI <stock...@gmail.com> wrote:Pfizer Inc is near a deal to sell its baby formula business to Swiss food giant Nestle SA for at least USD 9 billion, the Wall Street Journal reported on Tuesday.
Citing people familiar with the matter, the Journal said Nestle appears to have outstripped Danone and Mead Johnson Nutrition Co, who had teamed up for a bid, and that a deal could be announced as soon as next week.
Nestle, the world's biggest packaged food company, was already seen as a favored bidder due largely to its deep pockets.
Bloomberg reported that Danone and Nestle both submitted final offers of about USD 10 billion for the business, citing people with knowledge of the matter.
According to that report, Danone has told outsiders that it is unlikley to win the unit, but that Pfizer is trying to keep them in the auction, one of the people said. Bloomberg said a third bidder is no longer in the running.
Separately, Pfizer has hired JPMorgan Chase & Co, Bank of America Merrill Lynch and Morgan Stanley for a potential initial public offering of its animal health business, a source familiar with the situation said.
Pfizer put its infant nutrition and animal health businesses up for sale last July as it looks to focus on its core pharmaceuticals business.
A company official said on Tuesday that no decisions have been made and that Pfizer will be in a position to announce any decisions this year. The company expects to complete any transactions between July of this year and July 2013.
Regarding the animal health business, the official said a spin-off was most likely.
A Nestle spokesman was not immediately available for comment.
A person familiar with the negotiations said a deal for the infant nutrition unit was expected "in the near future," but not this week.
Pfizer's infant nutrition business sells baby formula and maternal supplements. It generates over 70% of its USD 2.1 billion in sales in emerging markets, with over a quarter coming from China, where the USD 6 billion market is expected to double by 2016.
The Pfizer business competes with products from Nestle and Danone, as well as Mead Johnson's Enfamil and Abbott Laboratories' Similac.
--
CA. Rajesh Desai
CA. Rajesh Desai
--
CA. Rajesh Desai
RAJESH DESAI
pfa
--
CA. Rajesh Desai
Rajesh Desai
Sales at the world's biggest food group rose to 68.4 billion Swiss francs ($74.68 billion), lagging a 69.3 billion francs estimate in a Reuters poll.
Analysts had expected underlying sales growth to accelerate to 4.5 per cent from 4.1 per cent in the first half.
Nestle and peers Danone and Unilever are grappling with sluggish consumer demand in austerity-hit Europe and a marked slowdown in many emerging markets, where double-digit growth rates seem to be a distant memory.
Nestle's sales growth in Asia, Oceania and Africa accelerated slightly to 6.9 per cent from 6.3 per cent in the first half, while growth in Europe rose to 0.9 per cent from 0.6 per cent in the first half with still negative pricing.
"We expect our continued growth momentum to enable us to deliver around 5 per cent organic growth for the full year," the maker of KitKat chocolate bars and Maggi soups said in a statement on Thursday.
It had cut its long-term 5-6 per cent goal in August and warned at the time that even the lowered guidance would be tough to reach.
Historically best-in-class, Nestle has disappointed markets for several quarters with poor performances.
Danone and Unilever, which have fared better thanks to their greater exposures to baby food and cosmetics, are now also feeling the pinch.
Unilever said last month a further slowdown in emerging markets meant underlying sales growth would be 3-3.5 per cent in the third quarter, while Danone on Wednesday cut its full-year growth target to 4.5-5 per cent in the wake of product recalls and a bribery scandal in China. Unilever publishes third-quarter results on October 24.
--
CA. Rajesh Desai
Rajesh Desai
NESTLE 4QCY13: Below estimates; multi-year low domestic sales growth; Cut estimates 2-6%; Maintain Neutral(NEST IN, Mkt Cap USD8.9b, CMP INR 5,597, TP INR 5,300, 5% downside, Neutral)
Click here to access full report
- Nestle India 4QCY13 results were below estimates and underscored the slowdown in urban consumption. Sales, EBITDA and PAT came in at INR22.5b (up 4.6%, est. INR24b), INR4.7b (down 6%; est INR5.5b) and INR2.9b (down 1.5%; est INR3.2b), respectively. EBITDA margins declined 220bps to 20.8%.
- Sales growth of 4.6% was led by 21% YoY growth in Exports which was in-turn driven by Exports to affiliates and currency depreciation.
- Domestic sales growth almost at a decadal low: Domestic sales posted a sub-par 3.7% YoY growth, lowest in ~10 years (3.1% growth in Jun-04). This growth was primarily led by pricing and mix, as per management.
- EBITDA decline after 15 quarters: Gross margins contracted 180bps to 53.4% (est. 54.5%) due to mix deterioration in favor of exports, in our view. Gross margin contraction is first in the last 10 quarters. Thus, EBITDA margins declined 220bps YoY flat to 20.8% (est. 22.8%) exacerbated by 40bp increase in other expenses. EBITDA declined 5.7% to INR4.7b (est. INR5.5b), first time in 15 quarters.
- Lower depreciation expenses (down 9.4% YoY), interest cost (flat YoY) and higher other income (doubled YoY) resulted in flat PBT. Higher tax rate (up 120bps YoY) led to 1.5% adj PAT decline. Reported PAT grew 1% due to lower provisions. We cut estimates 2-6%.
- CY13 highlights: CY13 Sales, EBITDA and PAT have grown 9%, 8.5% and 8% growth, respectively. Nestle has become net cash with INR1.9b of net cash as on year end.
- Stock trades at 35.4x CY14E EPS and 30x CY15E EPS. Demand/volume revival is key for the sustenance of Nestle’s premium valuations, in our view and we do not see that happening in a hurry given the muted consumer sentiments and weak macros. Maintain Neutral rating on the stock with a revised TP of INR5,065 (33x CY15E, 10% premium to ITC), 5% downside.
--
CA. Rajesh Desai
--
CA. Rajesh Desai