Chinyere Monye Written by Chinyere Monye · 1 min read >

With significant market shares in each of the three categories, Cadbury Nigeria, which was established in 1965, is the market leader in sugar confectionery, gum, and food beverages in Nigeria. Confectionery and Food Drinks and Intermediate Cocoa Products are the two business segments that the company engages in. With 40,000 workers and business operations in 200 countries, Cadbury Nigeria is a member company of Cadbury Schweppes Plc, a significant player in the global confectionery and beverage markets. It employs about 2100 people and distributes its goods through a network of 43 distributors. With a 58% market share overall, Cadbury Nigeria leads the sugar confectionery, gum, and food beverage markets in Nigeria.

Cadbury Nigeria, well known for its operational proficiency in 2012, experienced a slight decrease in its net profit margin (PATM) by 4%, which gave a total net profit after tax of N3.4 billion. This decrease was due to some external factors like the upheavals and strikes arising from the fuel price increase and oil subsidy issues in the first quarter, sustained security challenges throughout the year, the prevalent high costs of power supply, persistent price fluctuations in the commodities markets with its attendant impact on pricing predictability for raw materials supplies. This led to an increase in cost of sales and operational expenses. In 2013, the PAT Margin increased by 64%, giving a total net profit after tax of N6.02 billion. This was a remarkable growth year, as evidenced in other line items on the graph below. In 2014, the company experienced a drastic downturn which resulted from an unstable foreign-exchange market, a decline in oil revenue, high input costs, fierce competition, high operational cost. This same year, profit after tax was N1.51 billion, giving a total decrease of 71% in the profit after tax margin. In 2016 the economy of the nation faced a downturn. A GDP decline of 1.7% accompanied an inflation rate of 18.55% as at December 2016; a decline in contribution from the oil sector; depreciation of the Naira against the Dollar, and several other restrictions in access to foreign exchange. These factors impacted several businesses negatively and like other companies, Cadbury Nigeria was affected. However, from 2017, the company’s performance increased greatly as shown in the graph, across all profitability ratios.

Cadbury Nigeria experienced a 3% decrease in net profit margin, 70% decrease in EBIT margin, 28% decrease in EBITDA margin, 21.3% decrease in Gross profit margin, 12.9% decrease in Return on Equity and a 76.9% decrease in Return on Asset.

In 2020, with a GDP growth of -6.10% and -3.62% in the second and third quarters, respectively, Nigeria faced the same challenges of COVID-19 as the rest of the world. There was a reduction in disposable income as well as rising inflation and all of these impacted Cadbury Nigeria.


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