Nestlé, Nigerian Breweries generate more sales from their assets than peers

Nestlé Nigeria Plc and Nigerian Breweries Plc generated the highest sales relative to their asset bases among seven listed fast-moving consumer goods (FMCG) companies in the first half of 2026, highlighting a shift in asset utilisation across the sector as companies navigated different revenue and balance-sheet trends.

An analysis of H1 2026 financial results from seven listed consumer goods companies shows that Nestlé Nigeria generated approximately 77 kobo in revenue for every naira of assets, followed by Nigerian Breweries at 73 kobo.

Both companies improved their asset turnover ratios from the corresponding period in 2025, when they generated 65 kobo and 66 kobo, respectively.

Asset turnover, calculated as revenue divided by total assets, measures how efficiently a company uses its assets to generate sales. A higher ratio indicates that a business generates more revenue from each naira invested in its asset base, although the measure does not establish how much of that revenue translates into profit.

The findings offer insight into how consumer goods companies are responding to an economic environment characterised by moderating headline inflation, persistent food-price pressures, uneven manufacturing activity and continued constraints on household purchasing power.

The Central Bank of Nigeria’s composite Purchasing Managers’ Index (PMI) rose to 53.0 points in September 2026 from 52.7 in August, marking a fourth consecutive month of expansion. The industry index rose to 52.0 from 50.6, while manufacturing activity improved to 51.7, according to the CBN survey. A reading above 50 indicates expansion.

However, the improvement in business activity does not necessarily translate into stronger consumer demand or higher profitability for every manufacturer.

Nestlé, Nigerian Breweries improve sales efficiency

Nestlé Nigeria recorded the highest asset turnover among the seven companies, at 0.77x in H1 2026, compared with 0.65x a year earlier. Revenue increased 12.0 percent to N650.76 billion from N581.12 billion, while total assets declined 5.8 percent to N847.43 billion from N899.74 billion.

The combination of higher revenue and a smaller reported asset base improved the company’s sales efficiency. In practical terms, Nestlé generated approximately 12 kobo more in half-year revenue per naira of assets than in H1 2025.

Nigerian Breweries followed with an asset turnover ratio of 0.73x, up from 0.66x. Revenue rose 8.9 percent to N803.68 billion, while total assets declined 1.6 percent to N1.09 trillion.

The brewer generated about seven additional kobo in revenue per naira of assets compared with the previous year. Its performance indicates that sales growth outpaced the change in its asset base, although turnover alone cannot establish whether the additional sales produced proportionately higher operating cash flow.

Both companies’ results are notable in a market where rising household costs can affect purchasing frequency, product mix and demand for discretionary consumer goods. Companies that increase revenue without proportionately expanding their asset base may be better positioned to spread fixed costs, provided margins and cash collection remain sound.

BUA Foods, however, illustrates a different pattern. The company’s revenue declined 16.1 percent to N765.12 billion from N912.51 billion, while total assets increased 25.3 percent to N1.67 trillion from N1.33 trillion. Its asset turnover consequently fell to 0.46x from 0.68x.

This was the largest deterioration in turnover among the seven companies. BUA Foods remained the second-largest revenue generator in the group in H1 2026, but its expanding asset base was not matched by revenue growth during the period.

The figures raise questions about the pace at which the company’s assets are translating into sales. International Breweries Plc also recorded weaker turnover, falling to 0.43x from 0.48x. Revenue edged up 0.3 percent to N342.07 billion, while assets increased 12.2 percent to N792.65 billion.

Nascon Allied Industries Plc recorded the weakest ratio, at 0.26x against 0.33x a year earlier. Revenue rose 15.2 percent to N41.82 billion, but assets expanded 44.7 percent to N161.56 billion.

Unilever Nigeria Plc improved its turnover to 0.34x from 0.32x, as revenue increased 18.8 percent to N60.75 billion. Dangote Sugar Refinery Plc recorded a marginal improvement to 0.43 times from 0.42 times, even though revenue fell 8.9 percent to N391.85 billion, partly because its asset base contracted.

Inflation eases, but consumer demand remains a key variable

Nigeria’s headline inflation rate eased to 14.63 percent in September 2026 from 15.39 percent in August, extending the disinflation trend.

Data from the National Bureau of Statistics (NBS) show that food inflation stood at 19.59 percent in September, slightly above 19.57 percent in August, while core inflation, which excludes agricultural produce and energy, declined to 12.95 percent from 13.29 percent. Core inflation was 22.11 percent in September 2025, indicating a substantial slowdown in annual price increases outside the more volatile food and energy components.

The moderation in inflation reflects a slower pace of price increases, not a return to previous price levels. Earlier monetary tightening and base effects may have contributed to disinflation, while elevated food, transport and energy costs continue to constrain consumer spending.

Revenue performance among seven listed FMCG companies remained uneven in H1 2026. Unilever Nigeria recorded the fastest growth, with revenue rising 18.8 percent to N60.75 billion, followed by Nascon Allied Industries, up 15.2 percent to N41.82 billion, and Nestlé Nigeria, which grew 12 percent to N650.76 billion.

Nigerian Breweries’ revenue increased 8.9 percent to N803.68 billion, while International Breweries recorded marginal growth of 0.3 percent to N342.07 billion.

In contrast, BUA Foods’ revenue fell 16.1 percent to N765.12 billion, while Dangote Sugar Refinery recorded an 8.9 percent decline to N391.85 billion.

BUA Foods leads returns on assets despite declining efficiency

BUA Foods retained the strongest return on assets (ROA) among the seven companies, even as its asset turnover weakened. Its ROA stood at 17.49 percent in H1 2026, down from 19.51 percent in the corresponding period of 2025.

The company generated profit after tax of N292.27 billion, up 12.4 percent from N260.07 billion, but its total assets grew faster than earnings. This reduced the proportion of reported assets represented by half-year profit.

The comparison shows that a company does not necessarily need the highest asset turnover to generate the strongest return on assets. BUA Foods’ results demonstrate that profitability per naira of assets can remain comparatively high even when sales efficiency weakens.

Nestlé Nigeria recorded the second-highest ROA at 7.64 percent, compared with 5.62 percent a year earlier. Its profit after tax increased 28.1 percent to N64.78 billion, while its asset base contracted, lifting returns on assets.

Nigerian Breweries’ ROA rose to 8.50 percent from 7.95 percent, supported by a 5.1 percent increase in profit after tax to N92.95 billion. The brewer’s return on assets exceeded Nestlé’s despite having a lower asset turnover ratio.

Nascon’s ROA declined to 6.01 percent from 7.18 percent, even as profit after tax increased 21.2 percent to N9.72 billion. Its expanding asset base outpaced earnings growth, weighing on returns relative to the resources held.

Unilever Nigeria’s ROA fell to 4.84 percent from 5.51 percent as profit after tax declined 3.1 percent to N8.58 billion. International Breweries also recorded a decline, with ROA falling to 4.83 percent from 5.84 percent following a 7.2 percent decrease in profit after tax to N38.31 billion.

Dangote Sugar recorded the most significant turnaround. The company moved from a loss after tax of N24.27 billion in H1 2025 to a profit of N41.51 billion in H1 2026, taking its ROA from negative 2.35 percent to positive 4.53 percent. The return to profitability marks a reversal in its earnings performance, although its revenue declined over the period.