July 28, 2025/Cordros Report
Unilever Nigeria Plc (UNILEVER) published their Q2-25 unaudited results this morning (28 July), reporting EPS of NGN2.19 (H1-25 EPS: 2.51 and Q2-24: NGN0.19), driven by solid top-line growth of 61.8% y/y. Following the stellar performance, the company declared an interim dividend of NGN0.50 kobo for every ordinary share of 50 kobo each (Qualification date: Friday 8 August 2025), further supported by sustained growth in cash (+22.3%) to NGN83.70 billion from NGN68.44 billion
UNILEVER grew revenue by 61.8% y/y to NGN51.13 billion (H1-25: +53.5% y/y to NGN98.10 billion), due to significant price increases and moderate volume expansion across the Food Products (+64.5% y/y | 61.0% of revenue), Personal Care (+37.3% y/y | 28.3% of revenue) and Beauty & Wellbeing (+159.4% y/y | 10.8% of revenue) segments. Notably, Q2-25 revenue performance still reflects price actions implemented between H2-24 and Q1-25, when compared to prices in Q2-24. Hence, examining from a quarter-on-quarter perspective, revenue grew by 8.8%, reflecting lesser price hikes in Q2-25. Domestic sales rose by 66.5% y/y to NGN50.64 billion (Q2-24: NGN30.42 billion), while exports tapered by 58.9% y/y to NGN482.90 million (Q2-24: NGN1.17 billion).
Riding on the strong topline performance, gross margin expanded by 525bps y/y in Q2-25 to 45.5% (Q2-24: 40.3%), amid slower growth in costs. UNILEVER’s cost of sales (+47.6% y/y) grew at a slower pace in Q2-25 compared to revenue growth (+61.8%) in the same period. Thus, gross margin for H1-25 expanded by 191bps to 42.9% (H1-24: 41.0%), as cost-of-sales margin dampened to 57.1% from 59.0% in H1-24.
Accordingly operating margins improved, with EBITDA margin expanding by 21.15ppts y/y to 21.9% (compared to 0.7% in Q2-24), thus bringing H1-25 EBITDA margin to 20.6% (H1-24: 7.2%). The OPEX margin decreased by 586bps y/y to 25.8% compared to 31.7% in Q2-24 due to UNILEVER’s strong topline performance and more favorable cost dynamics. For context, cost-to-sales margin declined to 54.5% from 59.9% in Q1-25 (Q2-24: 59.7%), bringing H1-25 cost-to-sales margin to 57.1% (H1-24: 59.0%).
Net finance income in Q2-25 grew by 23.7% y/y to NGN2.86 billion from NGN2.31 billion in Q2-24, thus improving net finance income for H1-25 by 89.0% y/y to NGN5.34 billion (H1-24: 2.83 billion). The observed growth was driven by a significant 464.4% y/y increase in interest received on call deposits and bank accounts to NGN2.54 billion from N445.58 million in Q2-24. Given the relative currency stability in H1-25, exchange gains on FCY bank balances tapered to NGN624.55 million from NGN1.66 billion in Q2-24, bringing total exchange gains for H1-25 to NGN1.01 billion (H1-24: NGN3.29 billion). On the other side, the absence of FCY liabilities kept finance costs at bay, declining by 250.1% y/y in Q2-25 to NGN311.43 million (Q2-24: NGN207.28 billion).
Ultimately, profit before tax surged by 596.6% y/y to NGN13.40 billion in Q2-25 (Q2-24: 42.0% y/y), bringing PBT for H1-25 to NGN24.15 billion (H1-24: NGN6.28 billion). Consequently, profits after tax surged to NGN8.01 billion in Q2-25 (Q2-24: NGN1.08 billion), helped by lower effective tax rate of 6.3% y/y (Q2-24: 43.8% y/y).
Comment: UNILEVER’s ability to successfully implement price hikes and also achieve moderate volume expansion reflects the company’s brand superiority (given consumers’ increased sensitivity to prices changes) and deeper market penetration. With cost optimization measures in place, we believe UNILEVER is well positioned to sustain this performance for the rest of 2025FY, amid the improving macro conditions (disinflation trend and currency stability). Our estimates are under review.
