QTM Assignment

PGDM 2019-21
FMCG Sector Report

Name Company Roll No.

Alangkrita Neogi Pepsico 7

Sarbik Paul Chowdhury Johnson&Johnson 44

Shubhi Jaiswal Dabur 50

Sudip Samaddar Nestle 53

 45000

40000

35000

30000

25000 Medical Devices & Diagnostics

Pharmaceuticals
20000
Consumers
15000

10000

5000

0
2011 2012 2013 2014 2015 2016 2017 2018

Johnson & Johnson annual/quarterly revenue history and growth rate from
2006 to 2019. Revenue can be defined as the amount of money a company
receives from its customers in exchange for the sales of goods or services.
Revenue is the top line item on an income statement from which all costs
and expenses are subtracted to arrive at net income.

 Johnson & Johnson revenue for the quarter ending June 30, 2019 was $20.562B, a
1.29% decline year-over-year.
 Johnson & Johnson revenue for the twelve months ending June 30, 2019 was
$81.325B, a 0.79% increase year-over-year.
 Johnson & Johnson annual revenue for 2018 was $81.581B, a 6.71% increase
from 2017.
 Johnson & Johnson annual revenue for 2017 was $76.45B, a 6.34% increase from
2016.
 Johnson & Johnson annual revenue for 2016 was $71.89B, a 2.59% increase from
2015.
 Nestle Revenue (Annual)

2016
20%
2014 2018
21% 20%

2012 2010
20% 19%

Nestle 2017 Annual Report: Furthermore, NSRGY is significantly underrated by the

investment community due in part to slowing organic sales growth and falling margins. In 2017
there were only 17 articles on NSRGY, despite the company being the largest food company in
the world with 34 separate billion-dollar brands in its portfolio. NSRGY much like other
consumer defensive conglomerates is facing margin pressure from retailers, decreased brand
loyalty, and a niche-oriented consumer spending environment. NSRGY experienced revenue
contraction of close to $8.5 billion over the past three years. However, I anticipate that revenue
and margin declines will be only ephemeral difficulties. New management offers promise to
implement necessary improvements and in spite of short-term difficulties, Nestle will mitigate
competitive challenges. Nestlé’s new CEO Dr. Ulf Mark Schneider, offers a new perspective and
promise to drive bottom line and top line improvement. NSRGY's profit margins of 14.72% trails
competitors Kraft Heinz at 25.61%, General Mills at 16.11%, Hershey at 16.96%, and PepsiCo at
16.21%. It is more than feasible that NSRGY can accomplish their goal of 17.5-18% margins.
Just a few percentage points of efficiency could translate to billions of dollar's worth of cost
savings on a recurring annual basis. NSRGY is redirecting the brand and exhibits a low risk of
business complacency. The company sold its chocolate business for $2.8 billion to Italian
Nutella maker Ferraro; NSRGY has purchased Sweet Earth vegetarian foods, Blue Bottle coffee
and Chameleon Cold-Brew coffee last year. These acquisitions further diversify the Nestle brand
and move it toward the faster growing health, nutrition and coffee markets. Something else to
note is NSRGY's prominence in emerging markets. It is very difficult to find a company with
substantial business operations in emerging and developing markets.