Unilever (ULVR)

[idpickering]

Unilever Trading Statement – Third Quarter 2022.

Third Quarter highlights
• Underlying sales growth accelerated to 10.6% in the quarter, and sales guidance raised for the full year
• Price growth stepped up to 12.5% in the quarter, with volumes declining 1.6%
• Turnover increased 17.8% including a currency impact of 8.8% and (2.1)% from disposals net of acquisitions
• The billion+ Euro brands, accounting for more than 50% of Group turnover, grew 14%, led by strong
performances from OMO, Hellmann’s, Rexona, Magnum and Lux
• Simpler, more category-focused organisation operating since 1 July
• Continued portfolio reshaping with the sale of the global tea business completed and the acquisition of
Nutrafol, a leading provider of hair wellness products
• Second €750 million share buyback tranche, announced in September, will complete in December 2022
• Quarterly interim dividend for Q3 2022 is maintained at €0.4268
Chief Executive Officer statement
“Unilever has delivered another quarter of growth in challenging macroeconomic conditions. Underlying sales
growth improved to 10.6%, led by further increases in pricing with only a limited impact on volume, and we now
expect underlying sales growth for the full year 2022 to be above 8%.
We have delivered growth in each of our five Business Groups, led by a strong performance from our billion+ Euro
brands, growing 14% in the quarter. Strong pricing allows us to continue to drive increased investment behind our
brands.
Our organisation is now better structured to deliver consistent growth through a simpler, more category-focused
operating model. The full benefits will be realised over time, and we are seeing encouraging early signs of improved
accountability and faster decision-making.
The global macroeconomic outlook remains mixed, and we expect he challenges of high inflation to persist in 2023.
The delivery of consistent growth remains our first priority.”

https://www.unilever.com/files/b248d9a0 ... lights.pdf

Ian.

[Dod101]

Sounds a good optimistic statement from Unilever. Look forward to the full year results in due course.

Dod

[ADrunkenMarcus]

While there has been a slight volume decline, they have taken pricing actions which show a significant revenue increase as a result. I would hope that volume growth will resume over time and the company retains pricing power. If so, we should get a decent result over the long term.

Best wishes


Mark.

[Dod101]

While there has been a slight volume decline, they have taken pricing actions which show a significant revenue increase as a result. I would hope that volume growth will resume over time and the company retains pricing power. If so, we should get a decent result over the long term.

Best wishes


Mark.

Yes, I think that the results show a decent moat for Unilever despite some misgivings re that in the past.

Dod

[daveh]

Qtrly dividend of 0.4268 euro or £0.3722 paid 9 Dec Ex/Record dates 17/18 November

[ADrunkenMarcus]

Yes, I think that the results show a decent moat for Unilever despite some misgivings re that in the past.

I note that the volume decline seemed to lessen in quarter 3 vs. previous, which seems promising on the surface. I missed the webcast this morning so I will await for it to be uploaded as a replay.

Best wishes


Mark.

[scrumpyjack]

Interesting that, according to Kantar, supermarket own label product sales last year rose 8%, whilst branded product sales fell 0.7%

That does not give me much confidence in the 'moat' that companies like Unilever claim to have with their brands. Consumers are increasingly realising that they don't need to pay extra for brands to get high quality products.

[idpickering]

Transaction in Own Shares.

Unilever PLC (the " Company ") announces today that it has purchased the following number of its ordinary shares on the London Stock Exchange from Morgan Stanley & Co. International plc ("the Broker"). The repurchased shares will be held in treasury.

https://www.investegate.co.uk/unilever- ... 00034137E/

Ian.

[dealtn]

Interesting that, according to Kantar, supermarket own label product sales last year rose 8%, whilst branded product sales fell 0.7%

That does not give me much confidence in the 'moat' that companies like Unilever claim to have with their brands. Consumers are increasingly realising that they don't need to pay extra for brands to get high quality products.

I would need to read that research to be sure, but that wouldn't be how I would read it. Your conclusion doesn't naturally follow. There is nothing obvious from your quote to suggest the quality of the product is the primary driver of choice in product selection. It seems much more likely to me that (some) consumers, especially when faced with a squeeze of incomes, and a "cost of living crisis", will give up "high quality" in exchange for a lower price product - through choice or necessity. It doesn't mean they don't have to pay more to get that high quality, or that high quality is available at that lower price through own label.

What that means for margins and moats, and the success of the business, might be different to the conclusion you draw.

[scrumpyjack]

Interesting that, according to Kantar, supermarket own label product sales last year rose 8%, whilst branded product sales fell 0.7%

That does not give me much confidence in the 'moat' that companies like Unilever claim to have with their brands. Consumers are increasingly realising that they don't need to pay extra for brands to get high quality products.

I would need to read that research to be sure, but that wouldn't be how I would read it. Your conclusion doesn't naturally follow. There is nothing obvious from your quote to suggest the quality of the product is the primary driver of choice in product selection. It seems much more likely to me that (some) consumers, especially when faced with a squeeze of incomes, and a "cost of living crisis", will give up "high quality" in exchange for a lower price product - through choice or necessity. It doesn't mean they don't have to pay more to get that high quality, or that high quality is available at that lower price through own label.

What that means for margins and moats, and the success of the business, might be different to the conclusion you draw.

That may be so, or they may find, having traded down to own brand lines, that they are as good as the branded lines, where much of the price difference is down to marketing costs and profit margins rather than inferior products. Certainly the own brand Lidl and Aldi items I have tried have been very high quality - Tesco much less so.

[ADrunkenMarcus]

It occurred to me that Unilever kept the quarterly dividend steady in reporting currency (Euros) this quarter and therefore this calendar year. I did wonder if we'd see a slight nominal increase. In the grand scheme of things, it doesn't make a huge difference but they have adopted a cautious approach.

Best wishes


Mark.

[monabri]

That may be so, or they may find, having traded down to own brand lines, that they are as good as the branded lines, where much of the price difference is down to marketing costs and profit margins rather than inferior products. Certainly the own brand Lidl and Aldi items I have tried have been very high quality - Tesco much less so.

Might I recommend the " Gianni's" Aldi Chocolate Orange ice cream (on a stick).

https://www.aldipresscentre.co.uk/produ ... te-orange/

It does taste very similar to Terry's chocolate orange!

[idpickering]

Unilever mulls $3 billion sale of some U.S. ice cream brands - Bloomberg News.

British consumer goods giant Unilever is considering the sale of a portfolio of U.S. ice cream brands such as Klondike and Breyers, that could be valued at as much as $3 billion, Bloomberg News reported on Thursday.

International labels Magnum and Ben & Jerry's are not part of the review, the Bloomberg News report said, citing people familiar with the matter.

Unilever declined to comment on the report.

https://www.msn.com/en-gb/money/other/u ... r-AA153bkn

Ian.

[idpickering]

Unilever appoints Hein Schumacher as new CEO.

Unilever today announced the appointment of Hein Schumacher as its new Chief Executive Officer, following an extensive, global search process. Hein will replace Alan Jope, who announced in September 2022 his intention to retire from Unilever.

Hein is currently CEO of the global dairy and nutrition business Royal FrieslandCampina and became a Non-Executive Director of Unilever in October last year. He will begin as Unilever CEO on 1 July 2023, after a one-month handover period.

Hein is a business leader with an excellent track record across multiple leading companies in the consumer goods industry. As CEO of Royal FrieslandCampina, an €11bn turnover business operating in over 40 countries, he has delivered significant portfolio and organisation change as part of transforming it into a more focused, growth-driven and sustainable business.

Prior to joining Royal FrieslandCampina as CFO in 2014, Hein worked for H.J. Heinz for over a decade - during a time of significant change at the company - across the US, Europe and Asia. In his last four years at Heinz, he was based in China, where he led a turnaround of the Asia Pacific zone. Hein began his career in finance at Unilever, before joining Royal Ahold NV.

Unilever Chairman Nils Andersen said: "We are delighted to welcome Hein as our new Chief Executive, after an extensive, global search process. Hein is a dynamic, values-driven business leader who has a diverse background of experiences and an excellent track record of delivery in the global consumer goods industry. He has exceptional strategic capabilities, proven operational effectiveness, and strong experience in both developed and developing markets. The Board looks forward to Hein realising the full potential of Unilever as a winning business which delivers long-term growth and value for all its stakeholders.

"I would also like to take this opportunity to thank Alan for his leadership of Unilever. The changes he has made to the company's strategy, structure and organisation leave Unilever far better positioned for success. Alan will continue to lead Unilever until the end of June. He will be retiring after a tremendous 37-year career with our business."

https://www.investegate.co.uk/unilever- ... 00042268O/

Ian (I hold).

[Dod101]

Unilever appoints Hein Schumacher as new CEO.

Unilever today announced the appointment of Hein Schumacher as its new Chief Executive Officer, following an extensive, global search process. Hein will replace Alan Jope, who announced in September 2022 his intention to retire from Unilever.

Hein is currently CEO of the global dairy and nutrition business Royal FrieslandCampina and became a Non-Executive Director of Unilever in October last year. He will begin as Unilever CEO on 1 July 2023, after a one-month handover period.

Hein is a business leader with an excellent track record across multiple leading companies in the consumer goods industry. As CEO of Royal FrieslandCampina, an €11bn turnover business operating in over 40 countries, he has delivered significant portfolio and organisation change as part of transforming it into a more focused, growth-driven and sustainable business.

Prior to joining Royal FrieslandCampina as CFO in 2014, Hein worked for H.J. Heinz for over a decade - during a time of significant change at the company - across the US, Europe and Asia. In his last four years at Heinz, he was based in China, where he led a turnaround of the Asia Pacific zone. Hein began his career in finance at Unilever, before joining Royal Ahold NV.

Unilever Chairman Nils Andersen said: "We are delighted to welcome Hein as our new Chief Executive, after an extensive, global search process. Hein is a dynamic, values-driven business leader who has a diverse background of experiences and an excellent track record of delivery in the global consumer goods industry. He has exceptional strategic capabilities, proven operational effectiveness, and strong experience in both developed and developing markets. The Board looks forward to Hein realising the full potential of Unilever as a winning business which delivers long-term growth and value for all its stakeholders.

"I would also like to take this opportunity to thank Alan for his leadership of Unilever. The changes he has made to the company's strategy, structure and organisation leave Unilever far better positioned for success. Alan will continue to lead Unilever until the end of June. He will be retiring after a tremendous 37-year career with our business."

https://www.investegate.co.uk/unilever- ... 00042268O/

Ian (I hold).

'but Alan had a rather undistinguished career as CEO', as Andersen might have added.

Dod

[ADrunkenMarcus]

Hopefully he can kick some ass (without too much in the way of unnecessary reorganisations).

Best wishes

Mark.

[monabri]

In addition.... '' Jope was a guest judge, with Donald Trump, in the second series of the US version of reality TV show The Apprentice"

[idpickering]

Full year highlights;

• Underlying sales growth accelerated to 9.0%, driven by all Business Groups, with price growth of 11.3% and volumes declining 2.1%

• Turnover increased 14.5% to €60.1 billion, including 6.2% from currency and (1.0)% from disposals net of acquisitions

• Underlying operating profit improved slightly to €9.7 billion despite margin decline of 230bps driven by input cost inflation

• Underlying earnings per share decreased 2.1%, diluted EPS up 28.8% helped by profit on disposals

• Free cash flow €5.2 billion, including €0.3 billion of tax paid on separation of ekaterra, the global Tea business, reflects 97% cash conversion

• €1.5 billion share buyback and €4.3 billion dividends during 2022

• Brand and marketing investment increased €0.5 billion in constant exchange rates

• Our billion+ Euro brands, accounting for 53% of Group turnover, delivered underlying sales growth of 10.9%, led by strong performances from OMO, Hellmann's, Rexona, Sunsilk and Magnum

• Simpler, more category-focused organisation, in place since 1 July, is driving greater operational focus and faster decisions

The Board has declared a quarterly interim dividend for Q4 2022 of £0.3812 per Unilever PLC ordinary share or €0.4268 per Unilever PLC ordinary share at the applicable exchange rate issued by WM/Reuters on 7 February 2023.

The following amounts will be paid in respect of this quarterly interim dividend on the relevant payment date:

Per Unilever PLC ordinary share (traded on the London Stock Exchange):

£0.3812

Per Unilever PLC ordinary share (traded on Euronext in Amsterdam):

€0.4268

Per Unilever PLC American Depositary Receipt:

US$0.4569

The euro and US dollar amounts above have been determined using the applicable exchange rates issued by WM/Reuters on 7 February 2023.

US dollar cheques for the quarterly interim dividend will be mailed on 21 March 2023 to holders of record at the close of business on 24 February 2023.

https://otp.tools.investis.com/clients/ ... id=1667164

Ex dividend 23 Feb 23, paid 21 Mar 23.

Ian (I hold).

[idpickering]

Heads up. The ULVR CEO is being interviewed on Bloomberg TV shortly.

Ian.

[ADrunkenMarcus]

Thanks Ian.

They held the q4 dividend in Euros. I had hoped for even a 1% token increase but (I'll check later) I think the Sterling amount for the quarter is the highest I will have received to date. It is clear that there are more pricing actions to come through and only slight margin recovery in 2023.

Best wishes


Mark.