Nestle’s pricing power to play rescue act in trying times
- In CY21, gross margin dipped y-o-y, but lower ad spends helped Ebitda margin improve
- Costs outlook is firm in CY22, but Nestle’s strong pricing power should help
Akey takeaway from Nestlé India Ltd’s CY21 annual report released recently is that advertising & sales promotion (A&P) costs as a percentage of sales has dropped further. The company follows a January to December financial year. Nestlé provides the A&P details in its annual report only. The ad spends-to-sales ratio has seen a consistent decline in recent years.