1

FinanciaI ANALYSES
ON
NLS1LL AkIS1AN 2010
SU8MI11LD 1C Mr kAC AkMAL A||
SU8MI11LD 8 kehan kha||d ko|| No 10716
Abdu| waheed ko|| No 10727
M8A 2nd Semester Morn|ng

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EATONS

We would like to dedicate this effort to our parents, and to
our teacher Mr.Rao Akmal Ali
















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ANOWLEEMENT

express my whole hearted thanks to almighty ALLAH.

feel utmost pride in acknowledging with sincere gratitude for the
valuable guidance have received from my respected teacher sir Rao
Akmal Ali who has been a constant source of enthusiastic
encouragement through out my study .Due to this guidance would
be able to complete this report. His advice criticism and remarks are
of most value to me..

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Nestl has been serving Pakistani consumers since 1988, when our parent company, the
Switzerland-based Nestl SA, first acquired a share in Milkpak Ltd.
Today we are fully integrated in Pakistani life, and are recognised as producers of safe, nutritious
and tasty food, and leaders in developing and uplifting the communities in which we operate.
We at Nestl Pakistan ensure that our products are made available to consumers wherever in the
country they might be. Convenience is at the heart of the Nestl philosophy, and our aim is to
bring products to people's doorsteps.
n line with our parent company's global philosophy, we are proud of our commitment to
excellence in product safety, quality, and value. Our products cater to human needs, and we are
active in the communities we serve.
From spreading awareness about nutrition and wellness to digging wells in the Thar desert and
succouring earthquake victims, we are committed to serving our country and its people.
The consumer's voice is key to Nestl Pakistan's vision and working. Whether you live in the
remotest village or the metropolis of Karachi, our consumer services team stands ready to listen
to your concerns and provide answers about our products and guidance on matters of health and
wellness.








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'ision

"Nestl's global vision is to be the recognized leading Nutrition, Health and Wellness
Company. Nestl Pakistan subscribes fully to this vision of being the number one Nutrition,
Health, and Wellness Company in Pakistan.

"Nestl is the largest food company in the world. But, more important to them is to be the world's
leading food company".
Mission
At Nestl, we believe that research can help us make better food so that people live a better life.
Good Food is the primary source of Good Health throughout life. We strive to bring consumers
foods that are safe, of high quality and provide optimal nutrition to meet physiological needs. n
addition to Nutrition, Health and Wellness, Nestl products bring consumers the vital ingredients
of taste and pleasure.










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Good Food, Good Life: the key to health, nutrition and wellness. With over 140 years of
experience and expertise, we take great pride in bringing you the best products because happy,
healthy consumers are important to us. We develop our products keeping your preferences,
tastes and needs in mind. We understand that you, along with millions of other consumers, know
that you can trust our products to deliver purity, quality, convenience and nutrition. Our products
are carefully aligned to Pakistani tastes and needs. We're always trying hard to develop new
products and improve existing ones, and serve our consumers better. That's why through
constant renovation and innovation we're always testing or launching value added products and
making them available in sizes that will suit every requirement. So explore the world of health
with Nestl products, and find out what suits your family's needs.








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HORANTAL ANALYSS


2010 2009
Assets % %
Current assets
Cash and cash equivalents 294 100
Short-term investments 316 100
nventories 102 100
Trade and other receivables 98 100
Prepayments and accrued income 126 100
Derivative assets 60 100
Current income tax assets 91 100
Assets
held for
sale(a) .249 100

Total current assets 97 100
Non-current assets
Property, plant and equipment 99 100
Goodwill 98 100
intangible assets 116 100
investments in associates 91 100
Financial assets 161 100
Employee benefits assets 72 100
Current income tax assets 42 100
Deferred tax assets 86 100
Total non-current assets 102 100

total assets 100 100







8
2010 2009
Liabilities and equity

Current liabilities
Financial debt 87 100
Trade and other payables 96 100
Accruals and deferred income 100 100
Provision
s 93 100
Derivative liabilities 40 100
Current income tax liabilities 91 100

Liabilities directly associated with assets held for
sale(a) .10 100
Total current liabilities 83.54 100

Non-current liabilities
Financial debt 83.45 100
Employee benefits liabilities 84 100
Provision
s 108 100
Deferred tax liabilities 97 100
Other payables 92 100
Total non-current liabilities 89 100

Total liabilities 85 100

Equity
Share capital 95 100
Treasury shares -138 100
Translation reserve -141 100
Retained earnings and other reserves 130 100
Total equity attributable to shareholders of the parent 126 100
Non-controlling interests 15 100
Total equity 116 100

Total liabilities and equity 100 100







9
'ERTAL ANALYSS


2010 2009
Assets
Current assets
Cash and cash equivalents 7.21 2.46
Short-term investments 7.33 2.33
inventorie
s 7.09 6.97
Trade and other receivables 10.8 11
Prepayments and accrued income 0.67 0.53
Derivative assets 0.9055 1.50
Current income tax assets 0.85 0.94

Assets held for
sale(a) 0.025 10.1
Total current assets 34.9 35.9
Non-current assets
Property, plant and equipment 19.20 19.4
Goodwill 24.2 24.7
intangible assets 6.92 6
investments in associates 7.08 7.8
Financial assets 5.70 3.56
Employee benefits assets 0.14 0.207
Current income tax assets 0.08 0.19
Deferred tax assets 1.71 1.98
Total non-current assets 65.0 64

total assets 100 100










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2010 2009
Liabilities and equity

Current liabilities
Financial debt 11.30 13.01
Trade and other payables 11.27 11.75
Accruals and deferred income 2.50 2.50
Provision
s 0.538 0.57
Derivative liabilities 0.408 1.01
Current income tax liabilities 0.96 1.05

Liabilities directly associated with assets held for
sale(a) 2.68 2.60
Total current liabilities 27 32.5

Non-current liabilities
Financial debt 6.70 8.08
Employee benefits liabilities 4.72 5.6
Provision
s 3.14 2.90
Deferred tax liabilities 1.22 1.26
Other payables 1.12 1.22
Total non-current liabilities 16.92 19.11

Total liabilities 43.9 51.6

Equity
Share capital 0.31 0.32
Treasury shares -9.94 7.22
Translation reserve -14.14 10.07
Retained earnings and other reserves 79.2 61.06
Total equity attributable to shareholders of the parent 55.4 44.1
Non-controlling interests 0.65 4.25
Total equity 56.07 48.3

Total liabilities and equity 100 100




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LIUIDI1 kA1ICS
WCkkING CAI1AL kA1IC
WC CurrenL AsseLs CurrenL LlablllLles
CurrenL LlablllLles
ear 2009 ear 2010

39870 36083
36083

0104


38997 30146
30146

0293



CUkkLN1 kA1IC

C8 CurrenL AsseLs
CurrenL LlablllLles
ear 2009 ear 2010

39870
36083

1104


38997
30146

129


12
UICk kA1IC
C8 CurrenL AsseLs lnvenLory
CurrenL LlablllLles
ear 2009 ear 2010

39870 7734
36083



089


38997 7923
30146



103


A8SCLU1L UICk kA1IC
AC8 Cash + MarkeLable SecurlLles
CurrenL LlablllLles
ear 2009 ear 2010

2734 +8693
36083



031


8037 + 7914
30146


032

13
CASn kA1IC
Cash 8aLlo Cash 8ank
CurrenL LlablllLles
ear 2009 ear 2010

2734
36083

007


8037
30146

026

AC1IVI1 kA1ICS
INVLN1Ck 1UkNCVLk

CCCS
lnvenLory

ear 2009 ear 2010

43208
7734

384 Llmes


43849
7923

378 Llmes



14
INVLN1Ck 1UkNCVLk IN DAS
lnvenLory x 360
CCCS
ear 2009 ear 2010

7734 x 360
43208

6244 days


7923 x 360
43849

63 days


1C1AL ASSL1 1UkNCVLk

neL Sales
1oLal AsseLs

ear 2009 ear 2010

107618
110916

097 Llmes


109722
111641

098 Llmes



13
kCII1A8ILI1 kA1ICS
GkCSS kCII1 kA1IC
C8 Cross roflL x 100
Sales









NL1 kCII1 kA1IC

n8 neL lncome x 100
Sales

ear 2009 ear 2010

10939 x 100
107618

1018


30778 x 100
109722

2803

ear 2009 ear 2010

11793 x 100
107618

1093


33384 x 100
109722

3224

16
kL1UkN CN INVLS1MLN1]ASSL1S
8Cl neL lncome
Avg AsseLs C8 LlablllLles
ear 2009 ear 2010

10939
110916

988


30778
111641

2736


kL1UkN CN LUI1
8CL neL lncome
Avg LqulLy

ear 2009 ear 2010

10939
33631

2043


30778
62398

4916




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SWOT ANALYSS
STRENTHS:
BRAN STRENTH:
Nestle has some very strong brands like Nescafe, Meggi
and Cerelec. These brands are almost generic to their product categories.
!RO&T NNO'ATON
The company has been continuously introducing
new products for its Pakistani patterns on frequent basis, thus expanding its
product
Offerings.
RESEARH & E'ELO!MENT:
Nestle has a worldwide network of centers in 17
locations on four continents. An international staff of 3500 engaged in the search
for innovative new products and the renovation of existing one
MARET SHARE:
Another thing is high level of market share and that people
all over the world trust and recognizes Nestle as a big brand name.
LOW OST:
They are low cost operators which allow them to not only beat
competition but also edging ahead operating excellence, innovation, renovation,
product availability and communication are major strengths.
WEANESSES:
MAT&RE MARETS:
One major weakness of Nestle is that it is
entering into markets that are already mature and can give a tough competition
to new entrants.
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!LAN YO&RT:
Nestle Plain Yogurt has proved to be a Nestle
weakness because it has been unable to make its market place in USA. But
Nestle by analyzing the sensitive areas can overcome its weaknesses.
SuppIy ain:
The company has a complex supply chain management.

O!!ORT&NTES
To capture expansion:
Potential to expand to smaller towns and other
geographies. which its parents are famed for like breakfast cereals, smartest
chocolates, carnation etc
!roduct Offering:
The company has option to expand its product
folio by introducing more brands. With Pakistan demographic profile changing in
favour of consuming class, the consumption of most FMCG products is likely to
grow
IobaI Hub:
Since manufacturing of some products is cheaper in Asia than in
ani other continent. Nestle Pakistan could become an export hub for the parent in
certain product categories.
THREATS
To efend on ompetion:
mmense competion from the
organized as wel as the unorganized sectors. Off late to liberalise its trade and
investment policies to enable the country for better function in the globalised
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economy.The ndian govt.has reduced the import duty of food segments thus
intensifying the battle
anging consumer Trends:
ncreased consumer spending on consumer
durable resulting spending on FMCG(FAST MOVNG CONSUMER
GOOD)products. n the past 2 or 3 years the performance of FMCF has been
lackluster.
nternationaI Marketing Standards:
Nestle is facing the
threats by worldwide community due to its violation of international market
standards. Many conferences and campaigns has been held against Nestle in
this regard which can damage the name and trust of its customer.
SectoraI Woes:
Rising prices of raw material and fuel and
inturn,increasing packaging and manufacturing cost. But the companies may not
be able to pas on the full burden of these onto the customers.

!est anaIysis
!OLTAL :
business decisions which are influenced by political and
legal decisions.
Political decisions can affect Nestle for the good and the bad, because if taxes
increase,therefore consumers decrease and sales of stock decrease. However if
taxes decrease the likelihood is that consumers will buy more.
The confectionery has been criticised for unhealthy products with high levels of
sugar in chocolate and an advertising campaign for health eating has been
launched.


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EONOM:
influenced by domestic economic policies and world
economic trends.
The interest rates can affect Nestle (and KitKat) because if the interest rates
were high then Nestle would not want to borrow as much money for expansion.
n addition, if consumers had loans they would again have less disposable
income to buy luxury items.
f the minimum wage were brought down, this would mean more money for
Nestle but would also result in low sales from the consumers and vicar versa.

SOAL:
f Nestle factories do not control their pollution levels or have big
buildings destroying the landscape with noise and traffic congestion, then the
local residents would complain to their local council resulting to possible
incentives for bringing in jobs for the community being stopped. On the other
hand, local residents with small businesses near to Nestle Factories would
benefit due to the money being brought in by workers at the factory.
TEHNOLOAL:
Developments in manufacturing and business processes.
f the cost of machinery risen due to an increase in cost of producing that
machinery means production cocts of the new KitKat will be high than before the
increase.
There could be new machinery enter the market that allows production to be
carried out more effective and efficient than before, which saves on labour
costs.
Maintenance cost of machinery may increase because better-trained skilled
personnel are needed to maintain the machinery through advanced in
technology.




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ONL&SON:

NestIe is a market Ieader due to different
reasons.

O ts price is high against its competitors but it matches its
quality with its competitors. Nestle is today the worlds
largest food and beverage company with its mission to
provide healthier lifestyle

O Nestle is using its brand name and ts packaging is
good to promote its products & its very popular as
compared to its competitor

O We can easily find Nestle from any retailer shop











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kLILkLNCLS