July 25, 2023/CSL Research
Unilever Nigeria Plc. (Unilever) in its recently released H1 2023 numbers, reported a 23.7% y/y growth in Revenue to N54.21bn from N43.81bn in H1 2022. The top line performance was driven by a 41.2% y/y growth in the food segment to N28.05bn in H1 2022 from N19.87bn in H1 2022. The Home and Personal Care (HPC) product segment grew by 9.3% y/y to N26.16bn in H1 2023 from N23.94bn in H1 2022. Q/q (Q2 2023 compared with Q1 2023), Unilever’s Revenue was up 20.3% to N29.60bn in Q2 2023 from N24.61bn in Q1 2023. This performance was driven by a 31.9% q/q growth in its HPC segment to N14.87bn and a 10.4% q/q growth in the Food Products segments to N14.72bn.
Unilever’s Cost of Sales (adjusted for depreciation) declined by 11.5% y/y to N25.43bn in H1 2023. Hence, its gross profit margin advanced by 18.6ppts to 53.1% in the period from 34.4% in H1 2022. Furthermore, Marketing and Administrative Expenses and Selling and Distribution Expenses (adjusted for depreciation) waned by 38.30% and 194.6% y/y from N8.76bn and N2.03bn in H1 2022 to N5.40bn and a gain of N1.92bn in H1 2023 respectively. Consequently, gross profit margin grew 18.6ppts to 53.1% in H1 2023 from 34.45% in H1 2022 while its OPEX margin came in at 9.48% in H1 2023 as it pared by 15ppts from the height of 24.5% in the prior year.
The company’s EBITDA surged by 1,674.5% y/y to N23.63bn in H1 2023 from N1.26bn in H1 2022. Hence, EBITDA margin increased by 33.7ppts to 43.6% in H1 2023 from 9.9% in H1 2022. However, the significant rise in Unilever’s Depreciation & Amortisation to N22.41bn in H1 2023 (vs N1.26bn in H1 2022) brought the Operating profit numbers to N1.23bn (-60.20% y/y) in H1 2023 from N3.08bn in H1 2022.
The company recorded a 284.30% jump in its Finance Income to N1.75bn in H1 2023 from N457m in H1 2022. On the other hand, Finance Costs stood at N1.57bn due to the Net Gain on Foreign Exchange of N2.93bn in H1 2023 from a Loss of N430.35m in H1 2022. Consequently, Unilever’s Net Finance Income grew to N3.24bn in H1 2023 from N172m in H1 2022. The company’s Profit Before Tax closed H1 2023 at N4.52bn (+51.70% y/y) from N2.98bn in H1 2022 while Profit After Tax also grew by 44.8% y/y to N2.76bn from N1.91bn in H1 2022.
We have a Sell recommendation on Unilever with a price target of N12.67. Current Price: N17.45/s
