Unlikely to succeed, and applies to Mars and others, they can spend their advertising budget where they like and are not tied to any one platform or Twitter..? |
Unilever is being hit with a anti-trust lawsuit by X (formerly Twitter).https://x.com/lindayaX/status/1820838134470328676?t=WtqJcNtBo0I3eE-AtCx3yw&s=08 |
It would be a bit unprecedented for Unilever to trade 24x earnings. A comparison with European staplers would be more appropriate. I doubt unileve rhad the same quality brands as praocter and gamble (e.g. Gillette, head and shoulders, pampers, Oley etc.) |
 From Investors Chronicle Consumer staples giants Reckitt Benckiser (RKT) and Unilever (ULVR) are both attempting to divest from underperforming business areas as they focus on their top "power brands" in a bid to build market share, cut costs and fend off investor pressure.Last week, Reckitt announced plans to streamline operations and focus on a "high-growth, high-margin" core brand portfolio which delivered a 61 per cent gross margin in 2023 and a five-year like-for-like net revenue compound annual growth rate of 7 per cent.It aims to sell a portfolio of home care brands, including Air Wick, Mortein, Calgon and Cillit Bang, which contributed 13 per cent of net revenue last year. It is also examining "all strategic options" around its infant formula nutrition business Mead Johnson, which suggests a sale of the struggling unit it acquired for $17bn (£13bn) in 2017. The subsidiary posts almost a fifth of the company's net revenue.The fresh strategy under new chief executive Kris Licht is similar to the transformation plan at Unilever. Boss Hein Schumacher, who like Licht took the reins last year, is spearheading a growth plan which focuses on the company's 30 biggest brands. In the latest half, these contributed three-quarters of revenue and outperformed the rest of the business on underlying sales and volume growth. Unilever is also trying to split off its ice cream business, its smallest unit which delivers 15 per cent of revenue between brands Wall's, Magnum and Ben & Jerry's.Both companies have also taken the axe to employee numbers. Reckitt is aiming to cut its fixed cost base from 22 per cent to 19 per cent of net revenue, while Unilever is slashing 7,500 jobs and has guided for $800mn of cost reductions over three years. Restructuring charges are guided to come in £1bn in the three years to 2027 at Reckitt, and 1.2 per cent of revenue this year at Unilever.Plan potentialReckitt is the higher-margin business, which is the context in which Unilever's goal of achieving "a structurally higher margin" must be seen. For the six months to 30 June, Reckitt recorded an underlying operating margin of 24 per cent and gross margin of 61 per cent, compared to 20 per cent and 46 per cent, respectively, at its competitor.But the big question mark over Reckitt's strategy comes from ongoing legal headaches at Mead Johnson. Reckitt's shares were hit this week after infant formula rival Abbott Laboratories (US:ABT) lost a $500mn court case in Missouri over allegations it refused to warn that its products can cause the necrotising enterocolitis (NEC) bowel disease. Reckitt lost a $60mn case in Illinois on the issue in March, and more cases are incoming. It is increasingly uncertain if there will be interested buyers queuing up for the division.Analysts at Jefferies estimated that Reckitt's share price "is already discounting for $3.5bn of liability risk" for NEC issues in 2025. But with an NEC trial involving Reckitt kicking off in Missouri in September and multidistrict litigation (MDL) action building up, "that risk may be extended".By contrast, the removal of Unilever's ice cream arm is more straightforward, and would take out a low-margin part of the business which has caused internal legal headaches through subsidiary Ben & Jerry's attempts to stop sales in Israel. It could also help boost underlying sales growth to the higher end of management's 3-5 per cent target range, given the unit's relatively weak performance.Unilever reported a 420 basis point rise in gross margin alongside an increase to annual underlying operating margin guidance in its first half, and boosted brand investment ahead of peers, but margin recovery looks more difficult in the near-term.Analysts at Berenberg said that "while execution remains key [including innovation activity], we think that the recovery in US prestige beauty, easing competition in China, better weather in Europe and easing boycotts on western brands in Indonesia" could boost the company's growth next year.The new strategies come as price hike rates slow across consumer staples as inflation subsides. Nestlé (CH:NESN) said this week that price growth of 2 per cent in its half-year results had come "down faster than expected". Unilever's underlying price growth of 1 per cent in its second quarter was similarly lower than expected by analysts.ValuationsUnilever is the more richly valued of the two businesses, with its shares trading at 19 times forward consensus earnings (above its five-year average) compared to 14 times at Reckitt. Ratings are well under the 24 times earnings at Procter & Gamble (US:PG), where share price growth has shot ahead of rivals after it culled brands. Time will tell if Licht and Schumacher's visions of slimmer businesses will likely bring on similar re-ratings, but Mead Johnson in particular will remain a big worry in the short term. |
Sh*t I sold at £47.5.
I overestimated the general market weakness of the past few days.
I hope I can get back in at about the same price I sold. |
25.07.2024 - in March we announced the separation of Ice Cream and the launch of a major productivity programme to strengthen the company and substantially improve our efficiency and effectiveness. Separation activity is underway and on track to complete by the end of 2025. We are working at pace on the legal entity set up, the standalone operating model and carve-out financials. In July, we communicated internally on the planned changes to simplify our business and further evolve our category-focused operating model. We have started consultations with the respective works councils.
Is this likely to result in a disposal of the whole unit or ULVR still owning a part of it..? a 15% drop in revenues is quite a hole to fill..? or perhaps a nice special dividend IF it results in a sale.. :o) |
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 |
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