Flour Mills: Consolidating position as the market leader

Flour Mills of Nigeria Plc recently released its audited financials for the year ended March 31, 2022, demonstrating solid performance across all key segments. The result shows Flour Mills of Nigeria Plc strengthened its position as the market leader in flour, semolina and pasta manufacture as it obtained approval for the acquisition of Honeywell Flour Mills Plc.

The financial scorecard

Amid challenging environment, the Group posted impressive top-line growth even as it recorded strong operating profit and pre-tax profit. The Group recorded an impressive top-line growth for the full year across all business segments with revenue growing by 51percent year-on-year (Y-o-Y). The group revenue increased to N1.16trillion from N771.6billion in 2021. Profit before tax reached N41billion, up from N37billion in 2020/2021 (11percent YoY growth).
The Group continued to demonstrate resilience and strong performance across Food, Agro-Allied and Support Segments delivering top-line growth of 57percent in fourth-quarter (Q4) and 51percent in full year (FY) 2022, behind strong volume growth and favourable mix.

It continued investments in local content including remarkable improvements in the Agro-Allied business segment following increase in local demand and export operations thereby contributing 47percent (N19billion) to the Group’s Profit Before Tax (PBT).

The Group’s food segment grew by N270billion due to higher Business to Business (B2B) volumes and growth in core Business to Consumer (B2C) categories as it expanded its focus on local content. Flour Mills also continued to increase and diversify investments in our B2C redistribution infrastructure with the rollout of 226 vans to enhance penetration of its new business partners, especially into rural areas and to support the technology driven market channels.

Its oil and fats business grew revenue by 58percent, while pre-tax profit margin expanded by 141percent year-on-year (y-o-y), driven by improved export operations (revenue up 26percent).

The growing demand in the north and by other industrial customers propelled its introduction of brown sugar, which is locally grown on its farms in Sunti, to the market. At the same time, Flour Mills Backward Integration project in sugar production recorded a 21percent improvement in revenue driven by increased volume. However, the rise in raw material costs largely impacted the sugar segment’s operating performance.

Key messages for 2022

Flour Mills of Nigeria Plc in financial year 2022 demonstrated solid performance across Food, Agro-Allied and Support Segments delivering topline growth of 57percent in Q4 and 51percent in FY22, behind strong volume growth and favourable mix. Significant increase in international food prices and input costs impact gross margin.

Wheat and sugar costs increased by over 30percent and 20percent respectively in addition to higher energy and local distribution costs whilst sustaining progress on ESG agenda. Persistent operating performance in the Food segment; impressive improvement in the Agro-Allied and Support segments following continuous expansion, product innovation and enhanced capacity resulted in an impressive Profit Before Tax (FY’22 versus FY’21: N41billion versus N37billion) – up by 11percent.

Agro-Allied business segment contributed 47percent (N19billion) to the Group’s Profit Before Tax following increase in local demand and increased export operations. Flour Mills of Nigeria Plc obtained approval and has acquired Honeywell Flour Mills Plc to reinforce its position as the leader in flour, semolina and pasta markets.

Read also: FIRS and its quest to change Nigeria’s tax environment

Management speaks

Commenting on the result, Omoboyede Olusanya, Group Managing Director, Flour Mills of Nigeria Plc said: “We remain committed to implementing our long-term plan with further investments in local content via product innovation across our five major value chains.

“Our substantial underlying earnings demonstrate our commitment to achieving sustainability as we drive to achieve food security in the country, given the challenging operating environment over the years. With the acquisition of Honeywell Flour Mills Plc. (HFMF) and the attendant differentiated offers, our portfolio continues to evolve, strategically positioning the Group for opportunities from the African Continental Free Trade Area (AfCFTA).”

“With the appointment of our third female board member and the promotion of gender diversity throughout our business segments, our sustainability agenda made more strides in line with our long-standing commitment to women’s empowerment. In addition, we developed a local content, food security, and nutrition board committee to improve the well-being of our consumers, assist in regenerating and strengthening the farming communities in our supply chains, and promote local economic development.

“In line with our strategy, we will continue to increase operational efficiency with accelerated plans for cost optimisations across the Group. This will ensure that we are on course to continue to create value for our shareholders in the long run,” Olusanya added.

Overview of FY’22 (strategy and operations)

The Group continued its focus on local content with further backward integration investments and strategic partnership with Flour Milling Association of Nigeria (FMAN). The group focused on retail customers with accelerated expansion in the B2C segments; increased investments in regional distribution centers targeting B2C products; and enhanced roll-out of investments in RTM throughout the year. The company continued its cost optimisation programmes; advancement of its sustainability commitments; and introduction of new SKUs in key categories.

Proposed dividend

Flour Mills of Nigeria Plc proposes total dividend of N8.8billion for the full year versus N6.8billion last year, subject to annual general meeting (AGM) ratification. The proposed dividend is N2.15 per share, representing a 30percent growth. The AGM date for approval is September 7, 2022, while the payout date of the dividend when approved is September 8, 2022. At N35 per share on June 6, the company’s share price nears 52-week high of N41.45 as against a 52-week low of N27.5.

Transaction now concluded with Honeywell operating under FMN from May 2022

Flour Mills of Nigeria Plc (FMN) through its affiliates acquired 71.69percent equity stake in Honeywell Flour Mills Plc (HFMP). In addition, FMN through its affiliates also acquired 5.06percent equity stake of FBN Holding’s in HFMP. FMN now majority shareholder with 76.75percent equity stake with operational and managerial control. The transaction was valued at a total estimated enterprise value of N80billion, the transaction was concluded at final equity price per share of N4.20.

Strong potential synergies resulting in: extended footprint, enlarged customer base, solid market share and better channel penetration; strong combination of market-leading and diverse product offerings to the Nigerian population; strategically positioned for the opportunities stemming from the African Continental Free Trade Area. Flour Mills of Nigeria Plc has obtained all the required regulatory approvals. Approval was obtained from Federal Competition and Consumer Protection Commission (FCCPC); Nigerian Exchange Limited (NGX); and the Securities and Exchange Commission of Nigeria (SEC).


The Group is dedicated to achieving strategic growth opportunities, both organic and inorganic, within the sector. The Group remains committed to executing its overall long-term strategy to maintain growth and sustained profitability by increasing local content through product innovation across the 5 core value chains: Grains, Oils and Fats, Proteins, Sweeteners and Starch.

Commodity prices and input costs are expected to increase further as the war between Russia and Ukraine continue to drive up production costs. The performance of Sweeteners is foreseen to strengthen over the next two quarters, with the value chain being very attractive in the long run. Flour Mills has positioned to continue to fill the needs of the consumers with route to market and new product initiatives across the group, while also investment in production capacity and increasing aggregation/sourcing. Flour Mills of Nigeria Plc will also increase operational efficiency with accelerated plans for cost optimisations across the Group to ensure competitive product offerings and profitability in the new operating environment.

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