INDIVIDUAL ASSIGNMENT

AQ078-3-3-GFIN

GLOBAL FINANCE

APD3F2103IBM/ UC3F2103IBM

HAND OUT DATE : 06 April 2021

HAND IN DATE : 01 MAY 2021

WEIGHTAGE : 25%

INSTRUCTIONS TO CANDIDATES:

1- This is an individual assignment, carrying a weight of 25% towards the overall grade.
2- Word Limit in the range of 1000 - 1500 words (excluding bibliography).
3- The report should be submitted online (will be created in moodle)
4- Times New Roman, 1.5 spacing, Justified
5- Students are advised to underpin their answers with the use of references (cited using
the Harvard Name System of Referencing)
6- The acceptable percentage of similarity is below 30%

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 INDIVIDUAL ASSIGNMENT

GLOBAL FINANCE

AQ078-3-3-GFIN

UC3F2103IBM

STUDENT’S NAME: SALMAN AL FARISI

TP NUMBER: TP053999

LECTURER’S NAME: LEOW HON WEI

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 Contents
INTRODUCTION.....................................................................................................................................4
Current global financial issue...................................................................................................................5
Solution.......................................................................................................................................................6
Conclusion..................................................................................................................................................7
Reference....................................................................................................................................................8

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 INTRODUCTION
Nestle India Ltd, one of the largest FMCG companies in India, operates with in milk and
nutrition, drinks, packaged foods and cooking aids, and chocolate and confectionery markets. In
the food industry, the corporation is inaccessible. Milk products and nutrition, snacks, ready
meals and cooking aids, confectionery are all part of the food industry. Nescafe, Maggi, Milky
Bar, Milo, Kit Kat, Bar-One, Milkmaid, and Nestea are among the brands manufactured by
Nestle India.

Nestle Milk, Nestle Fresh ‘n' Natural Dahl, Nestle Slim Milk and Nestle Jeera Raita are
examples of products that are used on a daily basis.. Nestle Everyday Dairy Whitener, Nestle
Everyday Ghee, Nestle Milk, Nestle Slim Milk, and Nestle Dahl are among their milk products
and nutrition. Nescafe Classic, Nescafe Sunrise Premium, Nescafe Sunrise Special, and Nescafe
Cappuccino are among the beverages available. Nestle India is a subsidiary of the Nestle S.A.
company. With seven production plants and four local branches spread across India, the
company has a strong presence. The country's four branch offices aid in the distribution and
promotion of the company's goods. They're in Delhi, Mumbai, Chennai, and Kolkata, among
other cities.
The company's four factories have earned the globally recognized ISO14001 ecological
certificate and OSHAS18001 safety and health certificate. Nestle Nesvita Pro-Heart Milk with
Omega3 was first introduced in Mumbai in 2008. Nestle Nesvita Pro-Heart is a daily dietary
supplement that contains Omega-3 heart-healthy nutrients that have been clinically proven to
better balance cholesterol. NESTLE NAN 3, an add formula for older children, was introduced
as part of the company's continuing commitment to providing best-in-class nutrition products to
Indian customers. MAGGI PICHKOO Tomato Ketchup was introduced in a special easy-to-
handle daily package throughout the year, bringing quality, taste, and convenience to a wider
audience. (Introduction And Company Profile Of Nestle Marketing Essay, 2015)

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Current global financial issue

1) After the FMCG majors subdued results in the April-June period, Nestle India's share price
dropped 3% after increasing couple of percent in Wednesday's volatile market. Due to the
lockout, Nestle India has seen a significant drop in out-of-home use. Nestle India has also
acknowledged that it has faced unprecedented levels of volatility, uncertainty, and tension in
the last three months, resulting in disturbances across the value chain of the company.
Second quarter results was subdued, with revenue growth of just 2%, which was 4% below
our estimates. Cost reduction and lower tax outgo boosted EBITDA and PAT by 4% and
11%, respectively. Domestic revenues increased by 3%, whereas sales as well as other
operating profit fell by 9% and 50%, collectively. Nestle India's shares were trading at Rs
16,795, down 2%. In contrast, the BSE FMCG index were rising 0.31 percent in midday
trade. The benchmark measure, the BSE Sensex, was down 0.12%. In April of this year,
Nestle India hit a 52-week high of Rs 18,301. (Jain, 2021)
2) Nestle India's in-home consumption improved sales of Everyday dairy whitener, milk and
other milk-based items, and Nescafe, despite a drop in demand across all out-of-home
consumption channels. (Jain, 2021)
In the ‘e-commerce' channel, they performed admirably. Because of the lockdown, output in
all ‘Out of Home' consuming networks dropped dramatically. In terms of "in home use,"
however, Nestlé brands enjoys confidence, reputation, and power, which increased sales of
their dairy whitener, milk, and coffee, which all produced well this quarter. After initial
supply constraints, Maggi saw solid growth towards the end of the quarter. Covid-19 has had
a significant effect on the speed, channel, texture, and consumption of foods in a number of
rapidly consumer products segments. The term "out of home consumption" is being
redefined in favor of products and platforms that are more "in home." With the rise of e-
commerce sites, channel contexts have shifted dramatically. We have seen e-commerce
contribute substantially more to the economy, while the out-of-home market has struggled.
Those types of categories that seem to be common have shifted, and this, combined with the
economic pandemic that has followed Covid-19, has resulted in a re-calibration of customer
wallets, with "essentials" given priority over "luxuries, albeit affordable." (Bansal, 2021)

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 Solution
1) Once it relates to performance evaluation, huge profits and manufacturing margins are
indicators of business efficiency. These companies are stable, rising, and their profits and
earnings are also increasing. They all have solid and changing financial records, with no
signs of fraud or bankruptcy. Nestle India's 5-year Return on Capital Employed, which is a
good 32.2 percent, is one of the standout efficiency metrics. Double-digit ROCEs are a sign
of a company's ability to expand profitably. That's also true for Nestle India, whose stock has
returned 53.4 percent against the industry over the last 12 months. Price volatility and
economic instability can stifle momentum, but once optimism returns, previously stronger
stocks can quickly recover. In addition, high quality and momentum are indicators of some of
the best stocks to buy during the fastest uptrends. This combination of factors will help you
find stocks that will give you consistent returns over time.
Even in good times, these stocks can be prohibitively costly to purchase. However, in volatile
markets, there might be opportunities to purchase them at a discount. (Yahoo is now a part of
Verizon Media, 2021)
2) The innovation process pipeline is undergoing a transformation. Every company is
recalibrating in light of newly applicable customer behavior, determining which technologies
to pursue and which to reject. There are firm believer in engaging rather than disengaging in
a crisis. The buyer has other options if we disengage.
Consumers will be more digitally active in the future than they were before, and food
companies with a good digital-first capability will be the ones to keep consumers' attention
for a long time. Overall, we've increased our digital engagements in key areas of our
portfolio and launched creative digital initiatives to reach customers. (Bansal, 2021)
Previously, geography defined the client, followed by brand and category definitions, and
finally, the buyer. It was a single-minded approach to painting the country. Instead of looking
at the country through the lens of geography, the aim now would be to look at it through the
lens of consumers. (WRAP, 2021)

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 Conclusion
Nestle is the largest food company and the industry leader in both coffee and mineral water, with
items such as prepared dishes and cooking aids, milk-based products, pasta, instant coffee, and
baby food. Nestle is also an organic organizational architecture model. It is adaptable to the
dynamic external climate and has a decentralized decision-making process. And although
statistics and financial results of businesses cannot predict the future, they can extrapolate what
could happen and look at the points of matter both in positively and negatively. Nestlé's success
in the market was set out, reviewed, and analyzed in this study, which also included
recommendations to help the company improve its market activities.

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 Reference
 UKEssays.com. 2015. Introduction And Company Profile Of Nestle Marketing Essay.
[online] Available at: <https://www.ukessays.com/essays/marketing/introduction-and-
company-profile-of-nestle-marketing-essay.php> [Accessed 1 May 2021].
 Jain, S., 2021. Nestle India share price falls 3% on weak Apr-Jun quarter results; should you
buy the  stock?. [online] The Financial Express. Available at:
<https://www.financialexpress.com/market/nestle-india-share-price-falls-3-on-weak-apr-jun-
quarter-results-should-you-buy-the-stock/2038525/> [Accessed 1 May 2021].
 Uk.finance.yahoo.com. 2021. Yahoo is now a part of Verizon Media. [online] Available at:
<https://uk.finance.yahoo.com/news/predict-nsi-nestleinds-share-price-155854508.html>
[Accessed 1 May 2021].
 Bansal, S., 2021. Covid impacted pace, channel, frequency of FMCG consumption: Nestle
India CMD. [online] mint. Available at: <https://www.livemint.com/industry/retail/covid-
impacted-pace-channel-frequency-of-fmcg-consumption-nestle-india-cmd-
11598337965267.html> [Accessed 1 May 2021].
 WRAP, B., 2021. How Nestle's change in operating model proved to be a game-changer.
[online] Businesstoday.in. Available at:
<https://www.businesstoday.in/current/corporate/how-nestle-change-operating-model-
proved-game-changer/story/392668.html> [Accessed 1 May 2021].