Unilever Share Discussion Threads

[essentialinvestor] 05/2/2021 08:30

The CFO helping the share price with those comments, not!!.

[nick100] 05/2/2021 07:07

The owner of Dove soap and Ben & Jerry's ice cream wants to up its game in the U.S., India and China.

Unilever PLC on Thursday said it would sharpen its focus on those three countries as part of a new strategy aimed at driving sales growth. It also plans to invest more in e-commerce and prioritize fast-growing categories including skin care, nutrition and plant-based foods.

The consumer-goods giant said the U.S., India and China already make up nearly 35% of its sales and are forecast to account for 60% of global economic growth by 2030.

To capitalize, Unilever said it would seek acquisitions in those countries, redeploy marketing and R&D staff, and boost spending on developing new products targeted at those markets.

The company also plans to accelerate investments in e-commerce, which it said had grown strongly through the pandemic and now makes up 9% of sales.

In the U.S., Unilever said it sees hair care, beauty products and its vitamins, minerals and supplements businesses as areas where it can accelerate growth. It said the performance of its dressings business, which includes Hellmann's mayonnaise, had improved, but that it continues to work on hair care, where it has been battling rival Procter & Gamble Co. in shampoo.

"We're not yet where we want to be in the U.S., that's the main call out, " Chief Financial Officer Graeme Pitkethly said.

His remarks come as Unilever reported a 2.5% fall in annual sales to 50.72 billion euros ($61.04 billion), hurt by currency changes, and a 0.8% fall in net profit to EUR5.58 billion.

Underlying sales growth, which strips out currency changes and M&A, came in at 1.9%. That was helped by a 7.7% rise in North America, driven by consumers buying food ingredients to cook at home, ice cream to eat at home, and hand wash.

However, the company's adjusted operating margin dropped by 0.6 percentage point, worse than the 0.1 percentage-point drop analysts had expected. Unilever shares were down 5% in afternoon trading in London.

Unilever attributed the weaker profit margin to lower sales of more lucrative lines like hair-styling products, deodorant and out-of-home ice cream as consumers stayed in more during the pandemic. The company also faced higher costs to clean its factories and hire temporary workers among other measures driven by Covid-19.

U.S.-focused rival P&G, by contrast, last month said its quarterly gross margin increased by 1.7 percentage points from a year earlier. P&G said it sold more high-priced items in home care and appliances as well as in North America.

Unilever said it expects pandemic-related costs to continue to weigh on its gross margin this year, while warning that the performance of its higher-margin product categories depends on how the pandemic progresses.

Still, the company said growth in beauty and personal-care products had climbed in markets such as China, India and parts of Latin America where restrictions to curb the virus have been eased.

Looking ahead, Mr. Pitkethly warned that raising prices could be tricky. Unilever expects mid- to high-single-digit commodity inflation this year, driven by food ingredients, palm oil and tea, he said, but also expects cash-strapped consumers to opt for cheaper products.

Already in India, consumers have switched to cheaper laundry brands such as Wheel from pricier ones such as Surf Excel as they launder fewer office shirts and school uniforms, Mr. Pitkethly said.

"We will have to be on top of our game on pricing," he said.

[philanderer] 05/2/2021 00:35

In the fourth quarter, underlying sales growth was 3.5 per cent, but margins and restructuring costs failed to meet expectations, said Bruno Monteyne, analyst at Bernstein. “Beneath the surface, things do not look that great,” he added.

[pander45] 04/2/2021 20:34

I'm happy with the results and the strategic update. He's waiting until covid subsides to decide on the diversification strategy, and for me that's a really smart move.

[philanderer] 04/2/2021 19:30

Unilever leaves shareholders cold despite COVID crisis wins


Sky's Ian King explains why investors may have baulked at the Marmite-to-Domestos maker's latest results and strategy update.

[philanderer] 04/2/2021 19:25

EI, many thanks for LEX comments.

-------

World is shifting to a more plant-based diet, says Unilever chief

Group aims to have €1bn-a-year plant-based foods business by 2028, after success of its vegan products

[essentialinvestor] 04/2/2021 18:28

LEX in the FT - Unilever: squeeze in.

In a nutshell - risks of further margin compression remain.
Perception that Unilever is behind the curb on areas such as digitisation etc.

The article ends with "...Shoppers may be spending more on soap and bleach, but it is too soon for investors to add this staple to portfolios".

[essentialinvestor] 04/2/2021 18:20

That was kind of my point, if they really want rid of tea,
now looks the perfect time to secure an attractive price.

They have also made reference to a sale of smaller, non core
beauty and personal care brands, again still no action on that.

The wheels tend to turn a little slowly sometimes.

[irenekent] 04/2/2021 18:16

I wonder just how much enthusiasm there is for meatless chemistry sets. Millennials must have learnt to cook by now if they have been working from home. Mind you a microwave is just another set of buttons to push. As for flogging off the tea -don't get me started. Coffee is so last year.

[essentialinvestor] 04/2/2021 16:09

danes, fair comment on sector rotation.

It looks like the market is anticpating higher inflation further
down the track.

[daneswooddynamo] 04/2/2021 16:04

Tucked a few more away, better than buying em yesterday, suffering a bit of rotation today too by looks of it

[essentialinvestor] 04/2/2021 15:58

Only had a quick look so far at results, but must be missing something
as they looked OK ish to me.

I note the margin reduction, however ULVR flagged increased brand investment.
There are mutterings about restructuring costs, but this is a huge
organisation with a global footprint.

Free cash flow looks more than impressive, net debt lower by approx 2 bn.

The tea divestment is taking an age, it can't be that difficult - private equity awash with cash currently.
That needs prompt resolution.

Prior to today Unilever was already selling on a fat discount to it's nearest peergroup-
appreciate companies like Nestle and P&G are experiencing higher current growth levels.


Will have a listen to the conference call this evening, if I can muster the enthusiasm!.

[growthpotential] 04/2/2021 15:32

Depends what your time horizon is. If it short term then it's understandable but over the long run this will do well and only represents a better entry point :)

[nick100] 04/2/2021 15:03

There are more buys than sell, the price is going down.

[daneswooddynamo] 04/2/2021 14:58

Ulvr actually put up its divi!

[spoole5] 04/2/2021 14:56

Exactly the same hit as GSK yesterday and neither were that bad

[cordwainer] 04/2/2021 14:54

Call me impatient and stupid but I'm out at around 4101, took an 11% hit on about 3% of my portfolio. Was meant to be some kind of relatively safe-ish play through Brexit transition. FMCG giants not normally my thing tbh.

[spoole5] 04/2/2021 14:36

Amazing that similar results in the last quarter were greeted with a similar move the other way!

[philanderer] 04/2/2021 14:21

Hopefully chart support at 4000p , if that goes it's 3930p then 3720p.

[philanderer] 04/2/2021 14:08

RBC leaves Unilever PLC on 'Underperform' - target 3800 pence

[philanderer] 04/2/2021 13:54

The results were “underwhelming” and Unilever’s margins missed estimates on restructuring charges, wrote Bruno Monteyne, an analyst at Sanford C. Bernstein.

Bloomberg

[gp1948] 04/2/2021 12:26

The primary point of any business is to create wealth. Taking one side or the other of the migrant debate is a distraction and potentially loses customers.

[spacecake] 04/2/2021 12:07

Lets not be too surprised at these results, the world is a sick place and will take many years to recover.