Nestle Lanka’s state-of-the-art manufacturing facility in Kurunegala

90% of products marketed in SL made at Kurunegala factory

Nestle Lanka PLC has contributed almost Rs.5 billion to the rural economy last year via procurement of fresh milk and coconuts, Mr. Ganesan Ampalavanar, Managing Director of the company has told shareholders in the company’s annual report.

``We procured 62 million kilograms of local fresh milk from 18,000 Sri Lankan farmers for our dairy based products, marking our highest ever milk collection in Sri Lanka. We also procured 56 million coconuts for our Maggi Coconut Milk Powder," he said.

Nestle has posted net revenue of Rs.30.9 billion during the year, up from Rs.28.6 billion the previous year, and a profit after-tax of Rs.3.3 billion against the previous year’s Rs.2.93 billion with profit before-tax amounting to 13% of net revenue, up from 12% the previous year.

The company which earned Rs.61.51 per share had paid shareholders Rs.60 per share, up from Rs.54 the previous year, posting a dividend payout ratio of 98%.

The Nestle share which traded last year at a high of Rs.2,550 and a low of Rs.1,500 against a trading range of Rs.1,700 to Rs.870 the previous year last traded in 2013 at Rs.2,100.70, up from Rs.1,593.50 a year earlier.

The company’s Chairman, Mr. Etienne Benet, told shareholders in his annual review that Nestle had succeeded in delivering an organic growth of 8.2% together with improvements on its net profit and earnings per share.

"This performance reflects a focus both on our shorter-term performance – seeking to grow faster than the market – and on the longer term – making the right decisions to ensure sustainable profitable growth in the future," he said.

Benet noted that these results had been obtained in the backdrop of a general slowdown in the growth of food and beverage industry last year.

"Operating in a difficult environment required us to work smarter to maintain our edge in the market and deliver greater value for consumers and for you, our shareholders," Ampalavanar said.

"Our investments in 2013 – investments in capabilities and our brands – now provide the opportunity for us to

exploit that investment: to do more with what we have by further leveraging our assets, our scale and our capabilities and work smarter."

He said that investments this year will also extend to their state-of-the-art manufacturing facility in Kurunegala to build capacity and to continue upgrading with the latest technology.

Nestle manufactures 90% of its products sold in Sri Lanka locally at its multi-product factory in Kurunegala.

Nestle SA with 90.82% of the company is its dominant shareholder with only one other shareholder, Coupland Cardiff Funds PLC, owning over one percent. Coupland owns 1.59% of Nestle Lanka.

The directors of the company are: Messrs. Etienne Benet (Chairman), Ganesan Ampalavanar (MD), S. S. Islam, S. Duggal, Mahen Dayananda and R. Seevaratnam.

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