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Unilever (ULVR)

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TheMotorcycleBoy
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Re: Unilever (ULVR)

#444780

Postby TheMotorcycleBoy » September 23rd, 2021, 4:55 pm

Spet0789 wrote:Personally I think ULVR is cheap and I applaud the company for buying back stock. Essentially they are saying that the expected return on capital of their existing portfolio of businesses is (i) higher than the new business opportunities they see (so don’t push that capital into the business) and (ii) higher than the likely market rate of return (so don’t pay special dividends).

Can you explain to me the bit in bold please? That is, why the "likely market rate of return" means they shouldn't pay out a dividend.

That's strange, if your logic is correct it implies that the Games Workshop are really badly run. They've declared 5 divs since 07 December 2020. That's what I call "returning excess cash to the shareholders"

https://www.investegate.co.uk/Index.asp ... &words=gaw

Matt

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Re: Unilever (ULVR)

#444782

Postby scrumpyjack » September 23rd, 2021, 5:03 pm

I think this is all too going round in circles and not getting anywhere but my firm view is that buybacks or capital returns are appropriate for handing back surplus capital and dividends, special or normal, are for distributing profits. The two should not be mixed up because our tax system taxes income and capital differently for good reasons. Nuff said

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Re: Unilever (ULVR)

#444785

Postby dealtn » September 23rd, 2021, 5:08 pm

TheMotorcycleBoy wrote:
dealtn wrote:
TheMotorcycleBoy wrote:Buybacks, IMHO, just seem like a real nice cosy scheme in which big influential shareholders are relieved of stock at their preferred price by corporations, and the small shareholder's interest, i.e. mine, are completely bypassed.


How are they bypassed? You can sell your stock too (just like those nasty big influential shareholders).

Greetings,

There's no need to tease. However I don't want *particularly* want to sell dealtn. But if one of my holdings genuinely has oodles of excess cash, why don't they just straight up give me a special dividend? Pray tell. That's exactly what Games Workshop (GAW) do. They really do have lots of cash.

I've not run the numbers for ULVR for a while but I've just had a quick look at their AR2020. Just roughly

Cash=£5.5B
Gross Debt (current and LT)=£27B

that's not exactly cash rich is it? :lol:

What they are currently doing is questionable in my opinion firstly because they don't really have a stack of cash to throw around and secondly the way they very nicely decided to distribute this imaginary cash pile to their faithful long term :lol: shareholders is to approach big instis and say

"hey guys bunging our shareholders some real cash is a stupid idea, because the rich ones will get angry because they'll *shock horror* have to pay some income tax.....so how about we extend our overdraft pass you peeps a few 100 mil, and if we keep doing it for a bit, may be eventually the MMs will mark our SP, cos TBH it's looking really bad, yeah, don't laugh.....but actually we don't what else to do".

You can continue unpick my posts if you like, but I'm pretty convinced I know what's going on here. I just hope it works, they're my second largest holding.

Matt


I would lose the emotion if I am honest.

As stated most don't pay income tax, so that's a red herring anyway.

Regardless why should you get a special dividend? That would have to be replicated pari passu across all shareholders. Many (most?) wouldn't want that. If nothing else for most, as you say that could be a tax event. Most holders would rather have control over what tax events affect them, and when (and at what rate).

It would also be out of line with their stated objectives, so if anything would be more likely to be disappointing to investors that followed and trusted them to deliver against those. ULVR have a stated commitment, made in 2017, to increase their returns and leverage. Typically RoE > RoC so it makes sense as part of this declared strategy to have debt. In fact if you look at their 2020 results

https://www.fundslibrary.co.uk/FundsLib ... Je4TNY&r=1

this is a "green tick" pass (slide 38) - they don't want, nor deliver, a reduction in debt as part of their strategy. If they have excess cash that has a potential higher return by buying their own shares, it is part of their strategy to delivery it via buybacks (slide 66).

This has been the Multi Year Financial Framework at ULVR since at least 2017. It doesn't include Special Dividends (slide 63 and 64) so it should come as no surprise they aren't returning cash by way of that route, and if that doesn't suit you they have been consistent over a long time on this point, so it shouldn't be a surprise they aren't changing to suit you.

You seem, in your own words, convinced on what is going on here, so I am sure you are aware of all this. It doesn't look out of line with their publicly stated intentions to me though. (I can't comment on GAW as I don't hold and have never studied either their accounts or RNS's).

(You could always "create" your own special dividend though - money is fungible after all - but you know that).

TheMotorcycleBoy
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Re: Unilever (ULVR)

#445428

Postby TheMotorcycleBoy » September 26th, 2021, 3:13 pm

dealtn wrote:I would lose the emotion if I am honest.

Ok. Fair comment. I admit I'm more disappointed in myself for following this stock into a rabbit hole. All part of my learning curve, I guess. My problem, if you want me to be honest, is listening to others more than myself.

Regardless why should you get a special dividend?

I accept that I have no more rights than any others, but interestingly you add...

That would have to be replicated pari passu across all shareholders. Many (most?) wouldn't want that. If nothing else for most, as you say that could be a tax event. Most holders would rather have control over what tax events affect them, and when (and at what rate).

Underlining my earlier and sad observation, that being that most UK stock ownership is by very rich people (or large instis) that are effected by a "tax event". Radically different than the yarn spun in '86 suggesting that share ownership was for all, "if you see Sid tell him!" etc.

...In fact if you look at their 2020 results

https://www.fundslibrary.co.uk/FundsLib ... Je4TNY&r=1

this is a "green tick" pass (slide 38) - they don't want, nor deliver, a reduction in debt as part of their strategy. If they have excess cash that has a potential higher return by buying their own shares, it is part of their strategy to delivery it via buybacks (slide 66).

This has been the Multi Year Financial Framework at ULVR since at least 2017. It doesn't include Special Dividends (slide 63 and 64) so it should come as no surprise they aren't returning cash by way of that route, and if that doesn't suit you they have been consistent over a long time on this point, so it shouldn't be a surprise they aren't changing to suit you...

Hmm.. however slide 63, mentions "Growing Dividends". As you say, no special dividends. However it's clear that the "Growing Dividends" promise is something they are gradually back tracking:



https://uk.advfn.com/stock-market/londo ... /dividends

I'd interested in a non-politician answer from a ULVR exec explaining the fall in dividend growth (if this is current trend, it will be outstripped by inflation in fiscal year 2021) alongside the large share buyback campaign.

The other statement from slide 63 is "Delivering long term value creation through earnings growth". In my cynical view they are hoping that reduction in share equity, will enable them to pass off EPS as a proxy for earnings.

It's just a really disappointing admission of failure, IMHO. There are so many opportunities in alternative foods, vegatarianism/veganism is rising quickly. Forgetting about my earlier example of BYND (however their revenues have grown +100% CAGR for past 5 years, and according to my vegan daughter their burger is the best!!), there are so many opportunities which ULVR could be taking, either by in-house initiatives or bought-in, but seemingly doesn't have the guts to.

Matt

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Re: Unilever (ULVR)

#445440

Postby Dod101 » September 26th, 2021, 5:00 pm

You know what? Unilever has been around in its present form for well nigh 100 years and it has not done badly in that time. If a shareholder does not like what they are doing they have the option to sell in the market. It is a highly liquid share.

To make any comparison between it and Games Workshop is just plain silly. They are two entirely different businesses and have different needs for fixed share capital, borrowings and indeed working capital I have no doubt. Apart from anything else, Unilever has recently brought its two parent companies together and probably have decided that they do not need such a large capital base. Returning capital to shareholders is one aspect of share buybacks but deliberately reducing the number of shares in issue is another. Unilever has several very large brands where they can count on a strong cashflow and that sort of business lends itself to being financed by relatively cheap borrowings so borrowings will always feature in their Balance Sheet. I am not sure what Matt's motivation is in keeping on about the company but if he does not like it as I said he always has the option to sell.

Dod

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Re: Unilever (ULVR)

#445441

Postby monabri » September 26th, 2021, 5:01 pm

Matt, those dividend figures were exchange rate dependent.

Source : https://www.dividenddata.co.uk/dividend ... ?epic=ULVR

Image


The growth in dividend slowed last year but it was an unusual year!

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Re: Unilever (ULVR)

#445453

Postby Alaric » September 26th, 2021, 6:01 pm

TheMotorcycleBoy wrote:Despite all of your previous replies, I stand by my earlier conviction, that share buybacks are mainly to advantage of large financial institutions and are of significantly less benefit, compared to dividends, for small time investors like me, and zero benefit to wider society due to income tax avoidance.


Doesn't that miss the point that "large financial Institutions" include those managing investments on behalf of charities, pension funds, ISA and SIPP holders? For them there's no income tax to avoid and that even includes small investors with less than £ 2,000 a year in dividends. Dividends, notionally at least, come from profits already subject to taxation in the form of non-reclaimable Corporation Tax.

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Re: Unilever (ULVR)

#447625

Postby TheMotorcycleBoy » October 4th, 2021, 7:34 am

https://www.reuters.com/business/animal ... 021-10-04/

CHICAGO, Oct 4 (Reuters) - Unilever Plc (ULVR.L)  and Procter & Gamble (PG.N), the world's top two  advertisers, are seeking out younger audiences by reallocating some 2021 spending away from traditional TV and into video games, streaming services and media programs operated by retailers like Walmart (WMT.N) and Tesco (TSCO.L).

As they continue to look at their digital ad budgets and try to appeal to younger shoppers - who have during the pandemic convened around Nintendo Switch game consoles and in front of Netflix screens - the two consumer giants have turned to tie-ups with popular services like Hulu and HBO Max and games like Fortnite and Animal Crossing.

Shoppers of all ages also avoided big box retailers’ stores and placed orders on online platforms. Following a 25.7% increase in 2020, retail ecommerce sales worldwide are expected to rise to $4.92 trillion in 2021, according to data firm eMarketer.

Unilever is “rethinking” how it spends its advertising budget as the prolonged pandemic has accelerated a shift in the way people shop and entertain themselves, Luis Di Como, Unilever’s executive vice president of global media, told Reuters. He said digital marketing at Unilever, which makes Ben & Jerry’s ice cream and Dove soap, now accounts for roughly 45% of its total media budget versus about 40% prior to the pandemic.

Unilever holds monthly gaming "master classes" for members of its marketing team, inviting professional video game players and industry experts to keep the company attuned to consumers, Di Como said.

A representative of P&G, which makes Tide detergent and Gillette razors, said its “plans are evolving” to reach people “where they are – including in places like streaming and gaming."

"It seems a little riskier - I mean it's test-and-learn at this point," said Elizabeth Marsten, a senior director at marketing data firm Tinuiti. "But at the same time, how will you know if you don't try? You've got to go where the people are and 20-year-olds don't have linear TV."


Hopefully some good news,
Matt

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Re: Unilever (ULVR)

#447627

Postby Dod101 » October 4th, 2021, 7:43 am

TheMotorcycleBoy wrote:https://www.reuters.com/business/animal-crossing-netflix-unilever-pg-search-young-consumers-pandemic-2021-10-04/

CHICAGO, Oct 4 (Reuters) - Unilever Plc (ULVR.L)  and Procter & Gamble (PG.N), the world's top two  advertisers, are seeking out younger audiences by reallocating some 2021 spending away from traditional TV and into video games, streaming services and media programs operated by retailers like Walmart (WMT.N) and Tesco (TSCO.L).

As they continue to look at their digital ad budgets and try to appeal to younger shoppers - who have during the pandemic convened around Nintendo Switch game consoles and in front of Netflix screens - the two consumer giants have turned to tie-ups with popular services like Hulu and HBO Max and games like Fortnite and Animal Crossing.

Shoppers of all ages also avoided big box retailers’ stores and placed orders on online platforms. Following a 25.7% increase in 2020, retail ecommerce sales worldwide are expected to rise to $4.92 trillion in 2021, according to data firm eMarketer.

Unilever is “rethinking” how it spends its advertising budget as the prolonged pandemic has accelerated a shift in the way people shop and entertain themselves, Luis Di Como, Unilever’s executive vice president of global media, told Reuters. He said digital marketing at Unilever, which makes Ben & Jerry’s ice cream and Dove soap, now accounts for roughly 45% of its total media budget versus about 40% prior to the pandemic.

Unilever holds monthly gaming "master classes" for members of its marketing team, inviting professional video game players and industry experts to keep the company attuned to consumers, Di Como said.

A representative of P&G, which makes Tide detergent and Gillette razors, said its “plans are evolving” to reach people “where they are – including in places like streaming and gaming."

"It seems a little riskier - I mean it's test-and-learn at this point," said Elizabeth Marsten, a senior director at marketing data firm Tinuiti. "But at the same time, how will you know if you don't try? You've got to go where the people are and 20-year-olds don't have linear TV."


Hopefully some good news,
Matt

Thanks for that. What you do not seem to realise is that Unilever is not just 'doing nothing'. It is a very large company and it takes a lot to change it. In other words it is not a Games Workshop and to compare the two (as you seemed at one point to be doing is unrealistic and unfair.

Dod

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Re: Unilever (ULVR)

#447747

Postby Bouleversee » October 4th, 2021, 2:29 pm

Article in today's Times Business headed "Unilever goes for a new look with foray into luxury beauty market" says that Unilever is making eyecatching efforts to go up-market by pursuing acquisitions of luxury beauty and cosmetic brands - a sector growing much faster than its traditional names. Good luck to them and my holding. I buy cheap products from Boots or supermarkets and they seem to do just as good a job as the more expensive ones, i.e. I'm told I look much younger than my age. That could be flattery, of course :lol:

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Re: Unilever (ULVR)

#451299

Postby bluedonkey » October 19th, 2021, 2:36 pm

Now at 3790p intra-day. The lowest closing price I can see over the last 5 years is 3733p. I recall buying GSK and TSCO at what I thought were temporary dips and rare buying opportunities. Turned out the market knew more than me. I'm very torn.

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Re: Unilever (ULVR)

#451315

Postby Pendrainllwyn » October 19th, 2021, 3:04 pm

bluedonkey wrote:Now at 3790p intra-day. The lowest closing price I can see over the last 5 years is 3733p.
Unilever is 27% off it's peak and seems friendless at the moment. It closed at 3110.5p in late November / early December 2016. That's 17.9% lower than where it is today. The kind of stock I would like to own but it has looked expensive to me. It's starting to look more interesting at these levels. I may well miss out but I'll be patient awhile longer.

Pendrainllwyn

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Re: Unilever (ULVR)

#451390

Postby tjh290633 » October 19th, 2021, 6:54 pm

Q3 results on Thursday, I think. Maybe wobbles in advance.

TJH

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Re: Unilever (ULVR)

#451398

Postby ReformedCharacter » October 19th, 2021, 7:17 pm

bluedonkey wrote:Now at 3790p intra-day. The lowest closing price I can see over the last 5 years is 3733p. I recall buying GSK and TSCO at what I thought were temporary dips and rare buying opportunities. Turned out the market knew more than me. I'm very torn.

Me too, although I've done well from buying when they seemed 'cheap' in the past. Anyway, perhaps the Q3 results will enlighten.

RC

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Re: Unilever (ULVR)

#451864

Postby idpickering » October 21st, 2021, 6:11 am

For your information, the ULVR CEO is being interviewed on Bloomberg TV at 0730hrs today.

Ian.

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Re: Unilever (ULVR)

#451869

Postby idpickering » October 21st, 2021, 7:15 am

Third Quarter Trading Statement

Third quarter highlights

· Underlying sales growth of 2.5%, with 4.1% price and (1.5)% volume

· Turnover increased 4.0%, including 1.6% from acquisitions net of disposals and (0.1)% from currency

· Quarterly shareholder dividend of €0.4268 per share, ongoing share buyback programme of €3 billion to be completed by the end of the year


Alan Jope: Chief Executive Officer statement

"We have delivered a good quarter against strong comparators, with underlying sales growth of 2.5%. The combination of our strategic choices and focus on operational excellence continue to drive competitive growth. Underlying sales growth is now at 4.4% for the year to date and we are confident that we will be well within our multi-year framework of 3-5% for the full year.

Our strategic choices are having a positive impact on our growth and business momentum

· Priority markets: we have delivered good growth across our three priority markets of the US, China and India. South East Asia continues to be impacted by Covid-19, and was the main source of volume decline in the quarter

· Channel: ecommerce grew 38% and is now 12% of our sales

· Portfolio: our high-growth new businesses, Prestige Beauty and Functional Nutrition, each grew double digit and we completed the acquisition of digitally-native skin care brand Paula's Choice

· Brands and innovation: our focus on impactful innovation has led to a step up on measured product superiority and average innovation project size

· Organisation and culture: our organisational agility has allowed us to take rapid pricing actions in response to unprecedented cost inflation

Cost inflation remains at strongly elevated levels, and this will continue into next year. We have and will continue to respond across our categories and markets, taking appropriate pricing action and implementing a range of productivity measures to offset increased costs. We continue to expect that we will deliver in line with our margin guidance of around flat for the full year."


https://www.investegate.co.uk/unilever- ... 00047381P/

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Re: Unilever (ULVR)

#451874

Postby idpickering » October 21st, 2021, 7:49 am

idpickering wrote:For your information, the ULVR CEO is being interviewed on Bloomberg TV at 0730hrs today.

Ian.


Evidently they're running late. The notification of this interview and the timing of it was put up on Bloomberg just after 0600hrs today. All timings UK time by the way.

Since then there has been comment on Bloomberg re ULVR being a stock to watch on opening as they'd apparently missed the projected estimates

Ian.

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Re: Unilever (ULVR)

#451882

Postby daveh » October 21st, 2021, 8:42 am

idpickering wrote:
idpickering wrote:For your information, the ULVR CEO is being interviewed on Bloomberg TV at 0730hrs today.

Ian.


Evidently they're running late. The notification of this interview and the timing of it was put up on Bloomberg just after 0600hrs today. All timings UK time by the way.

Since then there has been comment on Bloomberg re ULVR being a stock to watch on opening as they'd apparently missed the projected estimates

Ian.


Share price is slightly up (0.6%) as I look now. I bought in recently for my IP, but clearly got my timing wrong as could have picked it up ~10% cheaper if I'd waited - my crystal ball clearly needs to go off for a service ;)

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Re: Unilever (ULVR)

#451885

Postby idpickering » October 21st, 2021, 8:55 am

daveh wrote:
Share price is slightly up (0.6%) as I look now. I bought in recently for my IP, but clearly got my timing wrong as could have picked it up ~10% cheaper if I'd waited - my crystal ball clearly needs to go off for a service ;)


I hear you, and thanks for your input. With regards to the ULVR sp movements, I try to not be to clever for my own, and my HYP's, benefit and think long term, and try to not stress about the small stuff.

Ian.

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Re: Unilever (ULVR)

#451889

Postby scrumpyjack » October 21st, 2021, 9:05 am

Can't see anyone mentioned it, so the dividend in GBP is 35.98p xd 4/11, paid 1/12


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