accounting end term project presentation

8/8/2019 Accounting End Term Project Presentation

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NESTLE MALAYSIA



E stablished in Malaysia since 1912

Leading halal food manufacturer with over 300 halal products

E mploys over 4,000 people

RM3.1 billion turnover in 2005

Public-listed on Bursa Malaysia

7 factories and 6 sales office

NESTLE¶S CORPORATE PROFILE



YEE LEE CORPORATION BERHAD / YLC



Began its core business as an edible oil repacker in Malaysia in 1968

Involved in various sector such as manufacturing, marketing & distribution of fastmoving consumer products, plantation & eco-tourism.

Products include food, bottled water, oral care, household cleaners and industrial

products, several brands YL C listed on Bursa Malaysia in 1993

2280 shareholders

YEE LEE¶S CORPORATE PROFILE

YEE LEE¶S CORPORATE PROFILE



Sunglow Detergent Powder

ung E u i In t nt oodle

Spritzer Di tilled Drin ing W ter ed E gle Coo ing Oil



It¶s all aboutMONEY!



F INANCIAL HIGHLIGTHS &ANALYSIS



Can I earn money?

Profitability



PROFITABILIT Y

` 2006 vs. 2005 ± Overview of BAT operating income` 20% growth in profit before taxation compared to 2005



PROFITABILIT Y

` G ross profit rate indicates profitability

42% 41%

0%

10%

20%

30%

40%

50%

Gross proft rate

2006

2005



Can BAT paying its debts as they come due?

L iquidity



SHORT-TERM LIQUIDIT Y

` Short-term investment with original maturities of 3 months` Sufficient cash in hand and balances with licensed financial institutions` Inventories - low cost and net realisable value

0.9

2.1

0

0.5

1

1.5

2

2.5

Curren t R ti

2006

2005



Will my money be ³safe´ in BAT?Credit Risk



LO N -TERM CREDIT RISK (D ebt Rat )

` The lower the debt ratio the better ` Percentage of assets financed by debt has decreased tremendously 2 7 % as compared to

2005

53%

80%

0%

20%

40%

60%

80%

100%

Deb t R ti

2006

2005



Is BAT worth to invest?



INVESTI N

` E arning per share up to 21% over 2005



Is BAT stable & reliable?

Stability



STABILIT Y

` Revenue ± Modest growth trend` Net Profit ± 20% of satisfied recovery in 2006` CO G S ± G radually growth from 2002 to 2006

T r d A alysis

7

Y ar

R vN t Profit

OGS

Not : Usi g as as p riod



STABILIT Y

` Revenue ± Modest growth trend` Net Profit ± 20% of satisfied recovery in 2006` CO G S ± G radually growth from 2002 to 2006

Pro f t afte r tax up 21 (excl uding non r ec urring i tem up to 8% )



OTHERS

` Sales of goods has accelerated growth of 34% as compared to 2005

` Purchase of goods has significant decreased of 15% as compared to 2005

` L aunched productivity improvement programme ± ³Breakthrough´

Cost efficiency improvement by RM40m

Manpower productivity improvement up to 26%

On-time deliveries of 100%

Indirect spend savings 15%

World class product quality



BRAND ACTIVITIES & PER F ORMANCE



PALL MALL CO NTINUES TO GLOW

2006 RA Share: 7 .7 %

2005 RA Share: 7 .5%

No te : RA f igur es a r e on m on th by m on th bas is



DUNHILL SHOWI NG MARKET SHARE GROWTH

2006 RA Share: 39.5%, up to 0.5% from 2005

Q4 RA Share: 40.4%




KE NT STABLE MARKET SHARE

Stable market share at 0.9% despite market downtrading

Note: RA figures are on month by month basis



NON-DRIVE BRA ND STABILISI NG

Market share stablilised




F INANCIAL HIGHLIGTHS & ANALYSIS



Important points Important PointsImportant points

Type of share:Common Stock Sales : 80.70 %

Profit:7.54Market value :142.65

Price$ :108.6P/E Ratio: 21.59

EPS :5.03Dividend :1.3 7 4

Y ield :1.265

Shares Out:1.603 .

Sales ank:46

Profits ank:40

ankin : 51

. Market Value:30

Symbol :

NSRGF.PK

47

07

.KL

NE

STLE

(M) BHD

Su estin point : Investing in nestle for long term



www.themegallery.comCompany Logo



E PS0

2

4

6

20052006

2.4 4.4

Inv estme n t r at io s

Current Ratio1.1

1.2

1.3

2005 2006

1.2

1.3Liquidi ty Rat io

Inc r eas ing In Curr e n t Rat io : c o m p a n y able to p ay sh or t te r m d ebts

long term debtto

Shareholder 18%

19%

20%

20052006

20%

19%

Gea ring R at io

Decreasing in G earing Ratio : c o m p a n y able to p ay long te r m d ebts

dividend yeild3.20%

3.40%

3.60%

3.80%

4.00%

2005 2006

3.50%

4.00%



Good Stable situationGood Stable situation :Able to payDebts , reasonable cash on hand

Food &Food &drinking drinking

Metal Metal industry industry

Nestle is good for long term investing althoughIt is not reasonable invest whole money in 1

type of basket(here stock)

So

But for NestleNestle : LOW Risk :LOW Risk :Less than 1 beta: low related to market

change/ no strikeno bonds in stock basket

Also external effectsEconomic Stability in Malaysia

Government policy to control Interest Rate :3.7

no sanctions against country No conflict/war no country risk Quite safe



0%

1%

2%

2005 2006

1% 1%

Net income as percentage of net sales

0%

2%

4%

2005 2006

3%

4%

2005 2006

Steady net income for both 2006 & 2005

Indicates growth trend in return on equity

PROFITABILIT YPROFITABILIT Y

Return on equity



LO NG-TERM CREDIT RISKLO NG-TERM CREDIT RISK

50%

60%

7 0%

20052006

60%60%

2005 2006Debt Ratio

Demonstrate same steady debt ratio for both year 2006 & 2005



SHORT-TERM LIQUIDIT YSHORT-TERM LIQUIDIT Y

Current Ratio

Modest growth of enterprise liquidity in 2006 in paying its debt

0.8

0.85

0.9

0.95

1

20052006

0.860.9

2005 2006



1.0%

3.0%

5.0%

20052006

3.5% 4%

2005 2006

INVESTME NTINVESTME NT

Dividend Y ield

Increased of dividend yield as positive indication for investment



0%

20%

40%

60%

80%

100%

120%

140%

160%

2002 2003 2004 2005 2006

100%

106%

13 7 % 140%

160%

Dividend PaidRevenueNet Profit

TRE ND ANAL YSISTRE ND ANAL YSIS



RE COMME NDATIONS:RE COMME NDATIONS:

NE STLE

BRITISH AME RICANTOBACCO

YEE LEE



7 8 6994

114 113 125 132

232

265 27 4

208

252 262 27 1

3 3 6 7 5 7 7 .50

50

100

150

200

250

300

2002 2003 2004 2005 2006 200 7 2008

NE ST LE

BA TYEELEE



0

2

4

6

8

10

12

2002 2003 2004 2005 2006

NE ST LE

BATYEELEE



0

10

20

30

40

50

60

2002 2003 2004 2005 2006

NE ST LE

BA TYEELEE

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accounting end term project presentation

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