April 23, 2026/Cordros Report
Unilever Nigeria Plc (UNILEVER) published its Q1-26 unaudited results today, posting an EPS of NGN1.22 (+26.4% y/y). Earnings performance was driven by strong revenue growth (+26.0% y/y) and EBITDA margin expansion (+138bps y/y).
UNILEVER’s revenue expanded by 26.0% y/y in Q1-26 (Q1-25: +45.4% y/y), reflecting residual pricing effects and moderate volume recovery. Across segments, Food Products (+37.0% y/y) led growth, with its contribution rising to 63.7% (Q1-25: 58.6%; Q4-25: 56.0%). Meanwhile, Personal Care (+4.6% y/y) recorded softer growth, accounting for 26.8% of revenue, reflecting its more discretionary nature and sensitivity to consumer spending. The Beauty & Wellbeing segment growth normalized to +30.4% y/y (Q1-25: +76.4% y/y; Q4-25: +89.3% y/y), contributing 9.5% of revenue. On a quarter-on-quarter basis, group revenue declined marginally by 0.1%, with only Food Products (+13.6% q/q) recording growth, while Personal Care (-2.6% q/q) and Beauty & Wellbeing (-42.4% q/q) lagged.
Gross margin expanded by 485bps y/y to 45.0% (Q1-25: 40.1%), as cost of sales growth (+15.8% y/y) remained contained relative to revenue growth. We attribute the lower cost growth to ongoing cost optimisation efforts, particularly around direct production inputs and energy efficiency.
Consequently, operating leverage improved, with EBIT and EBITDA margins expanding by 180bps y/y and 138bps y/y to 19.4% and 20.7%, respectively, despite a +49.4% y/y increase in OPEX (Q1-25: +10.7% y/y), as strong topline growth and moderated cost of sales offset the step-up in operating expenses.
On the financing side, net finance income dropped by 22.0% y/y to NGN1.94 billion, as a +713.7% y/y surge in finance costs, largely driven by a NGN1.24 billion FX loss on bank balances, outweighed the +25.7% y/y increase in finance income.
Overall, UNILEVER delivered PBT growth of 24.8% y/y to NGN13.42 billion in Q1-26 (Q1-25: NGN10.75 billion), while PAT expanded by 26.4% y/y to NGN7.02 billion (Q1-25: NGN5.55 billion), reflecting sustained earnings momentum albeit off a high base. This was achieved despite a still-elevated effective tax rate of 47.7% (Q1-25: 48.4%), indicating that operational gains were sufficient to absorb tax pressures and support bottom-line expansion.
Comment: UNILEVER’s Q1-26 earnings performance was primarily driven by strong topline growth, with the Food Products segment gaining notable volume traction during the period. We also highlight the company’s cost optimisation and improved energy efficiency, which supported margin expansion and enhanced earnings visibility. Looking ahead, we expect continued volume recovery across categories, led by Food, albeit contingent on the pace of improvement in consumer spending. For the remainder of the year, we expect a combination of FX stability, sustained cost optimization, and a more favourable macro backdrop to support further margin expansion and earnings growth. Our estimates are under review.
