 From Investors ChronicleUnilever (ULVR) revealed lower-than-expected sales growth on the back of slower price hikes, but the consumer goods giant raised its margin guidance as chief executive Hein Schumacher proceeds with a project to spin off the ice cream business and focus on "power brands" such as Dove and Hellmann's. The company-compiled consensus forecast underlying sales growth of 4.2 per cent in the second quarter. In the end, price growth of 1 per cent was below the expectation of 1.6 per cent and this meant sales growth slowed to 3.9 per cent from 4.4 per cent quarter-on-quarter. The beauty and wellbeing unit led the way on sales growth in the half, helped by a 5.6 per cent rise in volumes, with an underlying increase of 7.1 per cent. Personal care sales rose 5.6 per cent, with home care and nutrition up 3.3 per cent and 3.2 per cent, respectively. Ice cream was the laggard, posting sales growth of only 0.6 per cent. Nutrition and ice cream volumes were weak. Gross margin was up 420 basis points to 45.7 per cent, helped by a higher-margin mix alongside lower commodity prices and previous price hikes. This supported increased brand investment, which climbed 180 basis points to 15.1 per cent of revenue.The companies with brand powerUnderlying operating profits came in higher than forecast, up 17.1 per cent to 6.1bn (£5.1bn). The related margin rose 250 basis points to 19.6 per cent, and management now forecasts an annual figure of over 18 per cent compared with the 16.7 per cent posted last year. The hive-off of the ice cream arm is on track to be completed by the end of 2025, and this will remove 15 per cent of revenue and the lowest-margin unit. It will also get rid of the Ben & Jerry's subsidiary, which has caused headaches for Unilever with its attempts to stop product sales in Israel. A new productivity programme is another part of the restructuring plan. Management expects this to save 800mn over three years and result in 7,500 job cuts. Meanwhile, the enhanced focus on power brands looks sensible given these products contribute around 75 per cent of revenue and outperform the rest of the portfolio. Power brands posted underlying sales growth of 5.7 per cent in the half, with volumes up 4 per cent. Market share on a rolling 12-month basis hasn't budged. But strategic progress is being made. A valuation of 18 times forward consensus earnings is in line with the 5-year average. Hold. |
DZ Bank raises fair value for Unilever to 5,100 (4,500) pence - 'hold' |
UBS looks like a sore loser |
JPMorgan raises Unilever price target to 5,300 (5,100) pence - 'overweight'
Berenberg raises Unilever price target to 5,570 (4,960) pence - 'buy'
UBS raises Unilever price target to 4,000 (3,700) pence - 'sell'
Deutsche Bank raises Unilever price target to 5,000 (4,600) pence - 'buy' |
Deutsche: Unilever needs to think long-termUnilever (ULVR) enjoyed an earnings beat but it will need to balance profit growth and investment over the long-term, says Deutsche Numis.Analyst Tom Sykes retained his 'buy' recommendation and target price of £46 on the Citywire Elite Companies AAA-rated consumer goods giant, which climbed 6.2% to £46.69 yesterday after reporting quarterly margin expansion of nearly 20% and the prospect of increased profitability this year.'Unilever has significantly beaten at the [pre-tax earnings] level, driven by the large gross margin outperformance,' said Sykes.'However, pricing is still moderating and the home and personal care industry is becoming more competitive.'The group has 'significant ability' to invest for the longer-term and Sykes said 'we are only at the beginning of restructuring gains'.'Unilever sits at price/earnings relative highs versus our EU home and personal care, food and beverage coverage but is providing upgrades,' he said.'Key to retaining the multiple will be the balance between near-term profit growth and long-term investment.' |
'neutral' makes no sense...
Goldman Sachs raises Unilever price target to 5,040 (4,590) pence - 'neutral' |
Excellent :-) |
Great to see Unilever doing well. |
We are at a turnaround point. Sales are growing in the high margin divisions. |
That will do nicely, and a dividend raise... :o) |
Maybe investors are reducing their exposure to news.
On other stocks, I've seen many times the share price spike the day before the TU, to collapse the following day on disappoinning news, and vice versa. I wouldn't read too much into it. |
Results tomorrow, something leaked ? |
TD Cowen starts Unilever with 'buy' - price target 5,200 pence |
15 July 2024
Unilever announces today that it has agreed the sale of its water purification business, Pureit, to A. O. Smith, a leading global water technology company. Pureit offers a range of water purification solutions across India, Bangladesh, Sri Lanka, Vietnam and Mexico, among others.
Eduardo Campanella, President of Unilever Home Care, said: “The sale of Pureit marks another milestone on our journey to evolve our portfolio towards higher-growth spaces, in line with our Growth Action Plan. Pureit provides essential water purification solutions to millions of loyal consumers, and I am confident the brand will thrive further under the ownership of A. O. Smith.”
unilever.com/ |
Sunshine you hit the nail on the head |
1/3 of the office workforce to go is about the same amount that will go across the board after the introduction of AI.
Not just ULVR.
What investors fail to realise,( in today’s boom stock market conditions), is that a good half a dozen events are unfolding which in my view will end up in nothing short of a depression.
1/ Debt is out of control
2/ The electric car fad is over
3/Jobs are being lost.
4/AI Massive miss placed capital
5/ Ongoing wars
6/ Markets always come off the boil. |
aloto - Sorry to confuse you. Our sensors detect Butane in real time and computer linked to an air-jet to kick leakers off the line and therefore make the water bath redundant - Result a faster moving line. I cannot remember which of your factories first used it. Many years ago and Cascade were bought by the Yanks 10 years ago.
The technology was cutting edge allowing for real time measurement of gasses at a distance. However sales and marketing could have been much better. |
Pugugly, nope I was not involved in that project. I was in Unilever in much more recent times when Unilever was using LPG as propellant. Never seen CFC on any production line. Hot water baths are still in use on the filling lines though to check miss sealing of cans. Leaks are detected with one of your sensors maybe! |
Unilever to slash a third of European workforce |
Every single UK company unfortunately. |
alotto: "Now it's too late to come out clean, their career would be over." But if it is over and they are out on their neck would be nice bonus to collect a whistle blower bonus from the Yanks .
Different subject. Were you by any chance as an engineer ever involved on the aerosol filling lines when they switched from CFC's to butane and we (Cascade Technologies) sold you real time gas sensors to detect butane leakers and so eliminate the need for a water bath slowing down the line? |
Most office workers are small fish. I used to work for Unilever as an engineer. There is no much know-how held by Unilever. It's all about the brands. Competitors make products that are just as good. Re. price fixing, if they know any of that they should have spoken out in due time rather than be complicit. Now it's too late to come out clean, their career would be over.
I know many people working in Unilever. Many, many of them are useless, most of which are close to retirement and sitting around office sofas on their fat wallet talking on each other back. They wouldn't mind redindyabcy and early retirement. |
"Unilever to slash a third of office jobs in Europe
Shareholders including activist Nelson Peltz are pressuring consumer giant to boost growth" FT Just now.
Could have a significant downside risk if those thinking their job is on the line know where the bodies are buried and take that knowledge with them (including exact details). Possible bodies might include price fixing with competitors, dangerous additives, health and safety mal-practices, bribery, etc etc.
Remember the Americans can reward whistle-blowers very well. |
Their raided the target price by 0.06%. That tells you how much of a clown a broker can be. |
Goldman Sachs raises Unilever price target to 4,590 (4,558) pence - 'neutral' |
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