Cadbury Nigeria returns to profit as price hikes, cost controls lift margins

Cadbury Nigeria Plc returned to profitability in 2025, marking a sharp turnaround from a record loss a year earlier, as higher product prices, improved margins and easing finance costs helped the confectionery maker navigate Nigeria’s inflation-hit consumer market.

The company posted a ₦12.1 billion profit after tax for the year ended December 31, 2025, compared with a ₦22.2 billion loss in 2024, according to its unaudited financial statements. Revenue rose 31% to ₦169.8 billion, reflecting aggressive price adjustments across its beverages and confectionery portfolio.

Gross profit more than doubled to ₦36.6 billion, lifting the gross margin to about 21.6% from 14.1% a year earlier, as the company offset higher input costs with pricing and operational efficiencies.

The rebound highlights how consumer goods makers are recalibrating after Nigeria’s currency devaluation, fuel subsidy removal and surging inflation squeezed demand and margins in 2024. Cadbury, whose brands include Bournvita and TomTom, had been hit hard by foreign exchange losses and rising borrowing costs.

Finance costs fell sharply to ₦3.3 billion from ₦34.3 billion in 2024, aided by foreign-exchange gains and lower interest expenses. Operating profit jumped nearly fourfold to ₦20.6 billion, while profit before tax swung to ₦17.3 billion from a deep loss a year earlier.

Improved earnings helped strengthen the balance sheet. Total equity rose to ₦16.5 billion, nearly quadrupling from ₦4.4 billion in 2024, as retained losses narrowed. Borrowings declined to ₦22.8 billion from ₦32.8 billion, signaling reduced leverage.

Cash flows from operating activities remained solid at ₦20.5 billion, broadly flat year-on-year, even as working capital needs increased due to higher inventories and receivables.

Still, challenges persist. Domestic sales accounted for more than 93% of revenue, leaving Cadbury exposed to weak consumer purchasing power. Cash balances dipped slightly to ₦15.0 billion, while current tax liabilities jumped sharply, reflecting the return to taxable profits.

Cadbury Nigeria is majority-owned by Cadbury Schweppes Overseas Ltd, a unit of Mondelez International, which has been restructuring operations and scaling back less profitable product lines, including the suspension of Bournvita Biscuit production in 2023.

The company’s brands fall into three main categories: refreshment beverages, confectionery and intermediate cocoa products. Bournvita and 3-in-1 Hot Chocolate dominate the refreshment beverages segment, while TomTom, Candy Caramel, Candy Coffee, Buttermint and Clorets gum make up the confectionery portfolio. Cocoa Butter remains the key intermediate cocoa product. Production and sale of Bournvita Biscuits were put on hold on April 1, 2023.

Sector Performance

While Cadbury’s export business shrank by roughly 21%, its Refreshment Beverages segment remained the main revenue driver, generating ₦104.6 billion in sales. The company’s decision to maintain elevated inventory levels — which rose to ₦17.4 billion — suggests a defensive strategy against further inflationary pressures and potential supply chain disruptions.

For investors, the results point to stabilisation rather than a full recovery — a signal that pricing power and tighter financial discipline can restore profitability, even as Nigeria’s consumer goods sector remains under pressure from inflation and currency volatility.