Unilever PLC (ULVR) - Q1 2024 Trading Statement

[idpickering]

First Quarter highlights

• Underlying sales growth of 4.4%, with volume growth increasing to 2.2%

• All five Business Groups reporting underlying sales growth, led by Beauty & Wellbeing

• Turnover increased 1.4% to €15.0 billion with (2.0)% impact from currency and (0.9)% from net disposals

• Power Brands (75% of turnover) leading growth with 6.1% USG, driven by a 3.8% increase in volume

• Announced separation of Ice Cream and launch of major productivity programme to accelerate the Growth Action Plan

• 2024 outlook unchanged with underlying sales growth of 3% to 5% and a modest improvement in underlying operating margin

Chief Executive Officer statement

"Unilever delivered improved volume growth in the first quarter. This was driven by our Power Brands which saw underlying sales growth of 6.1%, with strong performances from Dove, Knorr, Rexona and Sunsilk.

We are implementing the Growth Action Plan at speed, focused on three clear priorities: delivering higher-quality growth, creating a simpler and more productive business, and embedding a strong performance focus. This is underpinned by our commitment to do fewer things, better and with greater impact.

In March, we announced the separation of Ice Cream and the launch of a comprehensive productivity programme. These actions will drive focus, faster growth and reduce costs. Dedicated project teams are progressing the work at pace.

Unilever's transformation is at an early stage, but we have increasing confidence in our ability to deliver sustained volume growth and positive mix as we accelerate gross margin expansion."

And later;

Dividends

The Board has declared a quarterly interim dividend for Q1 2024 of £0.3674 per Unilever PLC ordinary share or €0.4268 per Unilever PLC ordinary share at the applicable exchange rate issued by WM/Reuters on 23 April 2024.

https://www.investegate.co.uk/announcem ... nt/8155649

Also posted on Company News here; viewtopic.php?p=661300#p661300

I hold these in my HYP, and know others here do too.

Ian.

[csearle]

Q1 2024 Dividend (£0.3674 per share)

Announcement Date 25 April 2024
Ex-Dividend Date 16 May 2024
Record Date 17 May 2024
Payment Date 07 June 2024

C.

[kempiejon]

I used to reckon ULVR was a tidy income share to have but hardly ever a high yielder so beloved of these boards. The dividend went up by about 6% through most of 2000 - 2019 with occasional double digit growth. In the past 5 years it looks like the yield has been increasing though rate of increase of dividend stalling which is probably reflected in the share price.

I think a couple of us tucked ULVR away into the HYP on share price weakness and unusual higher that average yield. At 42.68¢ that's 3 years of flat dividends in home currency, with 3.8% yield that looks HYPable with the FTSE100 on 3.65% currently but with no recent increases in income it doesn't really look a strong prospect for my income portfolio.

[ADrunkenMarcus]

I used to reckon ULVR was a tidy income share to have but hardly ever a high yielder so beloved of these boards. The dividend went up by about 6% through most of 2000 - 2019 with occasional double digit growth. In the past 5 years it looks like the yield has been increasing though rate of increase of dividend stalling which is probably reflected in the share price.

I think a couple of us tucked ULVR away into the HYP on share price weakness and unusual higher that average yield. At 42.68¢ that's 3 years of flat dividends in home currency, with 3.8% yield that looks HYPable with the FTSE100 on 3.65% currently but with no recent increases in income it doesn't really look a strong prospect for my income portfolio.

I had some figures indicating ULVR's dividend compounded at about 7% from 1929 to 2019, so the 6% figure for 2000-19 is broadly in line with that (in a period of relatively low inflation). It does not have an unbroken record of dividend payments, but I rather blame Hitler for that.

I think the stalling of dividend growth since 2019-20 is disappointing but, for me, ULVR is one of my highest dividend yielders. I do approve of buybacks if the shares are undervalued and they are getting a good return on deploying that capital. However I would like to see dividend growth resuming (perhaps a token raise in quarter 4). I think they can do that over time, even if they do that by growing the dividend more slowly than earnings and cashflow - slowly bringing the payout ratio down.

Rightly or wrongly, Sharepad is showing dividend growth forecast at 6% for 2025 and 2026, with the dividend payout ratio reducing from 66 to 64.5%. I'd prefer the dividend payout ratio to be somewhat lower, in fairness.

Best wishes


Mark.

[micrographia]

I think there is certainly a place for it in a new HYP and I’m happy topping it up in mine. Not unusual for income shares to plateau dividend growth now and again. At any point in time there will be shares in a HYP rapidly growing their divi, others holding or reducing it, and yet others plodding away with rises somewhere around inflation. It’s portfolio income that matters.

ULVR has a low starting yield compared to a lot of other stuff out there, but in return you’re getting size and the durability that brings; a safer divi; and diversification, both sectoral and geographical. When you have holdings like ULVR in your HYP it can make you feel a little easier about adding the likes of PHNX. From here it might do a GSK, or growth (and then divi growth) might begin again - FWIW, the market seems to favour the latter.

It’s only real competitor for inclusion in a HYP would be RKT, which has it’s own issues at the moment; a straightforward litigation play that’s either a buying opportunity on a yield unseen since the start of the century or bargepole territory .

EEM

[moorfield]

It’s portfolio income that matters.

Recced for that single sentence. No-one, no-one, here in their portfolios I have seen discusses this. Except perhaps pyad for whom it is the measurement of HYPs success.

A problem though which ULVR perennially illustrates is once that penny drops, another one ought to fairly quickly... and it's one that I don't think HYP has a convincing answer to.

[tjh290633]

It’s portfolio income that matters.

Recced for that single sentence. No-one, no-one, here in their portfolios I have seen discusses this. Except perhaps pyad for whom it is the measurement of HYPs success.

A problem though which ULVR perennially illustrates is once that penny drops, another one ought to fairly quickly... and it's one that I don't think HYP has a convincing answer to.

Come off it. You can find many posts where income is mentioned, not only on the HYP board. There is always the discussion about whether special dividends count as income for a start.

Unilever just occasionally qualifies for an HYP, when it's price has taken a knock. You catch it when you can.

TJH

[csearle]

You can find many posts where income is mentioned, not only on the HYP board.

I think our moorfield was distinguishing between discussion about "portfolio income" and that about individual income from particular shares. C.

PS I recall though that we recently were discussing how as the years go by certain HYP constituents pick up the heavy lifting whilst others drag their feet. And, that the roles change with time. It was mentioned that we cannot know which will do which or when they will do it.

[torata]

A problem though which ULVR perennially illustrates is once that penny drops, another one ought to fairly quickly... and it's one that I don't think HYP has a convincing answer to.

What's the second penny drop?

torata

[moorfield]

A problem though which ULVR perennially illustrates is once that penny drops, another one ought to fairly quickly... and it's one that I don't think HYP has a convincing answer to.

What's the second penny drop?

torata

Do I really need to spell it out here? Clue: ULVR yields 3.6%

[tjh290633]

What's the second penny drop?

torata

Do I really need to spell it out here? Clue: ULVR yields 3.6%

It has been higher, of course. You just have to catch it at the right time.

TJH

[tjh290633]

Do I really need to spell it out here? Clue: ULVR yields 3.6%

It has been higher, of course. You just have to catch it at the right time.

TJH

Just checking back, for most of the current month it was nudging 4% yield. It rose in SP quite a bit on the results.

TJH