Nestlé Nigeria Plc is bouncing back in 2025, with strong food sales and foreign exchange gains driving a brighter outlook despite softer beverage demand. The company has raised its year-end target price to ₦1,906.64 per share from ₦1,319.08, following a solid H1-25 performance that saw pricing power offset weaker volumes.
While heightened price sensitivity and downtrading cut Q2 revenue by 2.9% quarter-on-quarter, price increases between H1-24 and Q1-25 helped preserve margins. For the rest of 2025, analysts expect easing inflation and a stable naira to reduce cost pressures, deliver FX gains, and support earnings growth.
According to the report excerpts from the Nigerian exchange traded data today revealed that Food sales remain the star performer, projected to rise 31.7% year-on-year, while beverage growth is expected to slow to 19.6%. Gross margins are forecast at 39.5% for 2025, up from 32% last year. However, higher marketing, freight, and administrative costs will keep EBITDA margins at 26.9%.
Nestlé’s cash flow turnaround is a key highlight. Free cash flow yield is set to swing from -5.8% in 2024 to 8% in 2025, with operating cash flow jumping to ₦169.79 billion. The company has already prepaid $20 million in FX liabilities, cutting its net debt-to-EBITDA ratio to 1.6x from 3.2x.
With a stronger balance sheet and improved liquidity, Nestlé is on track for a potential return to dividend payments in 2026. Analysts say the mix of resilient food demand, FX stability, and disciplined cash management puts the company in a solid position for sustained growth.
Discover more from Ameh News
Subscribe to get the latest posts sent to your email.
