Unilever (ULVR)

[idpickering]

Third quarter highlights; https://www.unilever.com/Images/ir-q3-2 ... 203_en.pdf

Thanks Ian. Jope is not saying much at this stage but the message is clear enough surely, that they are doing well and on target.

As to the Motorcycle boy and others, 'sustainable' as been in Unilever's vocabulary for some years now and I think we have allowed ourselves to be distracted by JofB8. Unilever did not get to be where they are without knowing a lot about their markets and how to succeed in them. I am quite relaxed about them and indeed wish all my shares were like them.

Dod

You’re welcome Dod, and I agree with you. In fact I was toying with topping up my holdings soon. I wish some of my other holdings were as reliable as ULVR.

Ian.

[ADrunkenMarcus]

I wish some of my other holdings were as reliable as ULVR.

Ditto.

Best wishes

Mark.

[idpickering]

Unilever Chairman announcement

Unilever today announced that Marijn Dekkers has decided to step down as Chairman of the Board with immediate effect. Nils Andersen, Non-Executive Director, has been appointed by the Board to succeed Marijn as Chairman of Unilever.

https://www.investegate.co.uk/unilever- ... 00111909T/

[JoyofBricks8]

May I be the first to congratulate Unilever’s new wokester-in-chief. May he lead us to great equality of outcome for all. Now buy our new improved emissions free Vienetta, served and stored at room temperature, wrapped in recycled carpet and dairy free to avoid animal cruelty and vegan triggering.

[Dod101]

I hope that what it tells us in the announcement is the real reason for his stepping down as Chairman. As he is remaining on the Board I expect we can assume so. He seems to me to be a mild sort of man and probably he found the responsibilities more than he had reckoned on. He has only been in situ for just over three years.

Dod

[idpickering]

UNILEVER SALES UPDATE

Unilever today announces that it expects underlying sales growth for 2019 to be slightly below its guidance of the lower half of its 3-5% multi-year range.

This is a result of challenges in the quarter in some markets, including the economic slowdown in South Asia, one of Unilever's largest markets, and trading conditions in West Africa remaining difficult. The trading environment in developed markets continues to be challenging and while there are early signs of improving performance in North America, a full recovery there will take time.

Earnings, margin and cash are not expected to be impacted.

Alan Jope, Chief Executive Officer: "Due to challenges in certain markets, we expect a slight miss to our full year underlying sales growth delivery.

"Looking ahead to 2020, growth will be second-half weighted. While we expect improvement in H1 2020 versus this quarter, we expect that first half growth will be below 3%. Our full year underlying sales growth is expected to be in the lower half of the multi-year range.

"Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance."

https://otp.tools.investis.com/clients/ ... id=1353217

RNS; https://www.investegate.co.uk/unilever- ... 00111153X/

[Dod101]

That probably accounts for the modest share price uplift in the last few days, compared say to Diageo. The market does not usually like the use of the word 'challenging' though.

Dod

[idpickering]

That probably accounts for the modest share price uplift in the last few days, compared say to Diageo. The market does not usually like the use of the word 'challenging' though.

Dod

Agreed. I'm unlikely to top up further regardless. One can never say never though. A useful 'hold' for me for now. ULVR down 4% on opening.

Ian.

[Steveam]

This rather suits me. Luck rather than judgement but I sold a substantial number at about £50/s earlier in the year as I needed to raise some cash and I’ve been wanting to get back in now that I free of the cash requirement. It’s an ill wind and all that.

Best wishes,

Steve

[Wizard]

Been thinking about adding some ULVR for a while, maybe this is the opportunity.

[Dod101]

A good share like Unilever is down over 5% this morning as I write. What has changed ? A few words about sales volumes. They say earnings, margins and cash will be unaffected. That would suggest that we should see a modest increase in the dividend with the final results for 2019. Does that justify such a drop, especially after the drop of around 7.5% or so from its peak about six short months ago?

Dod

[scrumpyjack]

Unilever is meant to be an ultra reliable steady profit machine 'bond proxy'. The market is right to be worried as this sort of problem often turns out to be the first sign of continuing weakness.

In the short term managements can often maintain reported profits so apparent 'earnings, margins and cash' seem OK for a while.

I wouldn't buy any more until the situation becomes clearer.

[scrumpyjack]

The FT confirms that Unilever are maintaining margins by cutting advertising spend.

"Analysts have been frustrated by the company’s willingness to cut its marketing spending in order to adhere to margin targets. “This is about Unilever and management’s adherence to a business model that isn’t working,” said James Edwardes Jones, an analyst at RBC."

For a consumer goods company that is not a sustainable strategy. The business is built on heavily advertising their products so the brands can be sold at a premium price and make good margins.

[Wizard]

The FT confirms that Unilever are maintaining margins by cutting advertising spend.

"Analysts have been frustrated by the company’s willingness to cut its marketing spending in order to adhere to margin targets. “This is about Unilever and management’s adherence to a business model that isn’t working,” said James Edwardes Jones, an analyst at RBC."

For a consumer goods company that is not a sustainable strategy. The business is built on heavily advertising their products so the brands can be sold at a premium price and make good margins.

Hmmmm, maybe I won't jump in after all.

[ADrunkenMarcus]

FWIW, Unilever is showing as a 4.7% free cash flow yield based on 2019 estimates. This rises to 6.3% on 2020 estimates (Sharepad). The forward dividend yield is estimated at 3.6% for 2020. These do not make it look expensive IMHO.

Best wishes

Mark.

[ADrunkenMarcus]

The FT confirms that Unilever are maintaining margins by cutting advertising spend.

Let's hope they stop this nonsense once they've hit their 2020 targets!

Best wishes

Mark.

[Dod101]

Just because the FT said it does not make it true but even if it is I should imagine that a company like Unilever knows a thing or two about marketing.

This is a company with a great record, not perfect; I doubt that many company is but if only all my shares were like Unilever I would be very happy.

Dod

[ADrunkenMarcus]

Allegedly, they waste half their marketing budget. If they halved it but kept the non-wasteful half, then there should be no issue.

Best wishes

Mark.

[monabri]

I could construct another story regarding marketing spend

"Unilever’s brand investment worldwide stood at 7.16 billion euros in 2018. With the exception of 2015 when Unilever spent around eight billion euros on marketing, the company has kept its global promotional budget relatively steady, ranging from 7.1 to 7.7 billion euros (approximately 8.1 to 8.7 billion U.S. dollars) per year."

https://www.statista.com/statistics/600 ... ing-spend/

Feb 13 2018

"Unilever is threatening to pull its ads from any platform, including Facebook and Google, that allows "toxic" content, according to Reuters. Keith Weed, Unilever's chief marketing officer, said the company — which owns numerous well-known consumer-packaged goods (CPG) brands including Ben & Jerry’s, Dove, and Lipton — will not invest in platforms that create division in society, do not protect children, or promote fake news."

https://www.businessinsider.com/unileve ... ?r=US&IR=T

(Comments made on Unilever's growing "PC" credentials have been discussed on HYP Practical)


March 20 2019
"The report ( Annual Report) revealed that the owner of Marmite, Dove, and Hellmann’s saved more than €500 million (£430 million/$568 million) on marketing last year by creating "more content in-house while making existing assets go further."

https://www.prweek.com/article/1579688/ ... in-housing


Then we have margins...noting the operating margin 2018 versus previous.

http://financials.morningstar.com/ratio ... region=GBR

Maybe the analyst at RBC likes advertising companies...?

Where were the concerns expressed 3 months ago?

[77ss]

A good share like Unilever is down over 5% this morning as I write. What has changed ? A few words about sales volumes. They say earnings, margins and cash will be unaffected. That would suggest that we should see a modest increase in the dividend with the final results for 2019. Does that justify such a drop, especially after the drop of around 7.5% or so from its peak about six short months ago?

Dod

Justified? Who knows?

The post-election bounce moved two of my holdings (LGEN & FCIT) into top-slice territory, so I have bit of cash to spare.

Given that I trimmed ULVR in June at 4941p, the current fall of some 13% since then is seriously tempting me. I'll see what happens tomorrow.