Cadbury makes gaining bigger market share a focal point of sustaining profitability

Cadbury Nigeria Plc, said it will make growing market share and bolstering the efficiency of its distribution system a focal point of sustaining growth and delivering better returns to shareholders.

The company’s chairman, Mr Atedo Peterside, outlined the firm’s plans while addressing shareholders at the company’s Annual General Meeting (AGM) at the weekend in Lagos.

He added that the company will focus on four strategic areas to drive its growth ambition in 2018, after emerging from loss last year.

The areas outlined include driving growth ahead of competition to boost market share within its product categories, while also sustaining its aggressive route to market initiatives.

He noted that the firm will strengthen its focus on quality improvements in productivity and operational efficiencies to maximize its competitive advantage.

Peterside lauded the firm’s employees for maintaining the principles of good business practices, pointing out that the company will develop an organization of high potential talent.

The chairman explained that the emergence from a loss position last year was built on four key areas – price, competitiveness, aggressive route-to-market initiatives, sustained consumer driven activations and exponential growth in the company’s treat portfolio.

“We recorded impressive growth in all these four areas. We implemented parity pricing on Bournvita for the first time in 10 years and unilateral pricing on our candy brands. In our route-to-market drive, we achieved highest ever active coverage of 93,000 outlets nationwide. The consumer-driven activations for our brands delivered double-digit growth and positively impacted on our top-line. In addition, our treat portfolio contributed substantially to our profitability with Cadbury Hot Chocolate 3-in-1 brand delivering significant net revenue growth versus the prior year,” Peterside said.

Shareholders of the company approved payment of N301.51 million cash dividends for the 2017 financial year, which translates to 16 kobo per ordinary share of 50 kobo each.

Cadbury recorded a net profit of N299m in 2017 versus a loss of N296m in the previous year. The gain was driven by a 10% rise in sales to N33bn, from N29.9bn in 2016. The company also benefited from cost savings initiatives, which saw selling and distribution costs as well as administrative costs decline by 7% and 23% respectively.

However, the company’s net finance cost skyrocketed by 312% to N361m, driven by the naira devaluation of 2016 and the resultant environmental inflation which drove up the cost of goods sold as well as operational costs.

Cadbury said that revenue contribution for the 2017 financial year came from 55% Refreshment Beverages which includes Bournvita and Cadbury 3-in-1 hot chocolate; 31% from confectioneries such as Tom-Tom peppermint and its variants, while 14% of the revenue came from Intermediate Cocoa products which is comprised of cocoa powder, cocoa cake and cocoa butter.

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