October 23, 2026/Cordros Report
Unilever Nigeria Plc (UNILEVER) published its Q3-26 unaudited results today, reporting standalone EPS of NGN1.88 (+42.6% y/y), bringing 9M-26 EPS to NGN4.60 (+20.1% y/y). Earnings growth was supported by modestly higher sales (+11.8% y/y) and lower direct costs (-5.9% y/y), which more than offset the 55.6% y/y increase in OPEX. Meanwhile, the board declared an interim dividend of NGN2.00/share, with the qualification date set for Friday, 30 October 2026.
UNILEVER grew revenue by 11.8% y/y in Q3-26 (9M-26: +18.4% y/y), reflecting a favourable price/mix effect. Food Products remained the key growth driver, with revenue from the segment increasing by 27.2% y/y in Q3-26 (9M-26: +29.8% y/y), lifting its contribution to group revenue to 71.9% (Q3-25: 63.2% | Q2-26: 64.8%). Meanwhile, Beauty & Wellbeing revenue declined by 2.2% y/y, marking a moderation from the strong growth recorded a year earlier (Q3-25: +111.7% y/y), while Personal Care remained under pressure, owing to the still weak discretional consumer spending, with revenue from the segment declining by 20.5% y/y. Consequently, Beauty & Wellbeing and Personal Care accounted for 10.3% and 17.8% of group revenue, respectively, compared with 11.8% and 25.0% in Q3-25.
Gross margin expanded materially by 982bps y/y to 47.9% in Q3-26 (9M-26: +529bps to 41.2%), supported by favourable price/mix effects and lower direct costs. The 3.7% appreciation in the naira during the quarter likely provided some relief on imported inputs, while advance payments to suppliers to leverage favourable pricing opportunities for raw and packaging materials also supported cost management. These factors contributed to a 5.9% y/y decline in cost of sales in Q3-26 (9M-26: +7.8% y/y).
Consequently, EBIT and EBITDA margins expanded by 180bps and 209bps y/y to 22.1% and 23.7%, respectively (9M-26: +134bps and +133bps to 20.9% and 22.3%, respectively), amid a +722bps y/y increase in OPEX margin to 25.7% during the quarter (9M-26: +362bps to 25.9%). The increase in OPEX was driven by a 74.2% y/y rise in brand and marketing expenses and a 22.8% y/y increase in selling and distribution expenses.
Net finance income increased by 38.0% y/y to NGN2.22 billion in Q3-26 (9M-26: +1.2% y/y to NGN7.03 billion), supported by a 44.7% y/y increase in finance income. Finance costs also increased by 92.2% y/y to NGN436.13 million, although they remained relatively immaterial to earnings.
Accordingly, PBT grew by 23.7% y/y in Q3-26 (9M-26: +21.8% y/y), reflecting a moderation in earnings growth against the exceptionally strong base recorded in the prior year. Meanwhile, the 874bps y/y decline in the effective tax rate to 34.1% from 42.9% in Q3-25 (9M-26: 42.1%) provided additional support to bottom line growth, resulting in a 42.6% y/y increase in PAT (9M-26: +20.1% y/y).
Comment: In our view, UNILEVER’s 9M-26 earnings remained robust, supported by strong Food Products growth and significant gross margin expansion. We mostly see the lower tax rate in Q3 as a timing adjustment and note weaker cash conversion on working capital build. Going forward, sustained volume recovery, margin resilience and tighter OPEX control will remain key to maintaining earnings momentum. Our estimates are under review.
