Earnings Update- UNILEVER- H1:2021

UNILEVER delivered a stellar double-digit topline growth of +40.80% year on year in its recently published Q2:2021 financial result. This performance can be attributed to the 2020 low base occasioned by the pandemic and the effect on consumer demand. Overall, revenue for H1:2021 expanded by 43.21% YoY to NGN39.15bn. The positive stride was powered by the marked improvement in both its Heath and Personal Care Products -HPC (+48.74%) and Food Product segment (+34.58%). We are of the opinion that a combination of factors such as an upward price review on select products, increased demand for seasoning products by foodservice agents and the essential nature of HPC products supported the revenue growth recorded. Based on our appraisal, the firm is on course for a revenue rebound to its Pre-2019 levels- that is, before the tightening of its trade receivable period, which triggered a 34.89% drop in 2019FY revenue.

We are upbeat about the firm’s performance for the rest of the year. Our position is grounded on an expectation of continued improvement in domestic sales, further supported by the steady recovery in the domestic macroeconomic environment and the essential nature of the firm’s products. In addition, we view the firm’s expressed interest in expanding its product base as a positive for topline. This is, however, hinged on the market’s acceptance of the proposed product(s). On this premise, we revise our 2021FY revenue forecast upwards to NGN71.30bn signifying an increase of 15.07% YoY.

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Earnings Update Unilever H1-2021


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