Unilever Nigeria Plc 2016 Financial Summary

Company Profile

Unilever Nigeria Plc. was established in 1923 as a soap manufacturing company – West Africa Soap Company – by Lord Leverhulme. It later became known as Lever Brothers Nigeria. Today, it is the longest serving manufacturing organization in Nigeria. 

After a series of mergers and acquisitions, the Company diversified into manufacturing and marketing of foods and personal care products. These mergers and acquisitions brought in Lipton Nigeria Limited in 1985, Cheesebrough Industries Limited in 1988 and Unilever Nigeria Limited in 1996. 

The Company changed its name to Unilever Nigeria Plc. in 2001 in line with the global strategic direction of the business. 

The Company was quoted on the Nigerian Stock Exchange in 1973 and is a truly Multi-local Multinational organization with very outstanding international and local brands in her portfolio. 

The international brands include Close-Up toothpaste, Pepsodent toothpaste, LUX beauty soap, Lifebuoy soap, Rexona, Vaseline lotion and Vaseline Petroleum Jelly in the Personal Care Unit of the business; Blue Band Margarine, Lipton Yellow Label Tea and Knorr bouillon cubes in the Foods Unit; and OMO Multi-Active Detergent ,Sunlight washing powder and Sunlight Dish washing liquid in the Home Care Unit. Other Regional and local jewels include the Pears Baby Products range and Royco bouillon cubes. 

12 Months Report UNILEVER NIG. PLC
	2016 N'000	2015 N'000	change	Year End
Revenue	69,777,061	59,221,748	18%	December
Profit/Loss  before taxation	4,106,422	1,771,063	132%
Profit for the period	3,071,885	1,192,366	158%
Issued Shares (Units)	3,783,296,250	3,783,296,250
Basic Earnings Per Shares (Kobo)	81.00	32.00	153%
Last total dividend paid (Kobo)	10.00	5.00	100%

Quarter on Quarter Performance

Revenue N'000                                                   PAT N'000

Q1: #16,782,159                                                  Q1: #1,041,404

Q2: #15,495,654                                                  Q2: #52,195

Q3: #17,593,461                                                  Q3: #473,554

Q4: #19,905,787                                                  Q4: #1,504,732

Unilever maintained as average of #17,444,265,000 in terms of revenue for the Financial year 2016. it also maintained an average of #767,971 in terms of profit after tax. The best two quarters in terms of PAT remains Q1 and Q4. Let me quicly mention also that for the past 3 years the Q4 remains the biggest quarter in terms of PAT from the analysis of prior years results.

The comparison of the 2016 shareholding structure by the Major shareholders shows that Unilever Overseas Holding Holland BV still maintain its 50.04%, while  Unilever Overseas Holding BV a subsidiary of the former, increased its holding to 10.02% from 8.49% buying from the floor of the Nigeria Stock Exchange (NSE), in the same vein Stanbic Nominees Nigeria Ltd also increased its holding to 10.43% from 5.13%. In all, the three together holds a total of 70.49% of the to total fully and paid up shares. Less we forget, in 2015 Unilever Overseas announced its intention to increase its share holding in the Nigerian Business to 75% from 50.04%. Through its SPV its had been able to increased this to 60.06%. My take is, price of the stock will still remain stable regardless of the result and will always converge towards #45.50k tender offer price.

A closer look at the result shows that the company is managing its cost very well. its marketing and administrative cost reduced by 15.96% and the net Finance cost reduced by 40.79% these impacted positively on the Profit before tax (PBT). 

I also noted that the company invested significantly in raw materials in 2016. Raw and packaging material increased by 89.26% compare to 2015. This i belief is to secure continuous production. It is critical to know that the company has a huge amount  of its goods in transit. A total of #1,165,228,000 worth of Goods which imply 505.52% increase from 2015. This is too much of a risk and i should belief they have enough mitigation in place.

Aside the huge good in transit the company performance had been consistent since 2014.

Unilever enjoy an Economic Moat which was brought about by the baskets of products they currently parade. products like Blue Band Margarine, Lipton, Lux and so many others mention earlier in this report. 

The Economic moat, the share holding structure, and the outstanding 10% acquisition makes Unilever competitive.

Unilever will face its first trading test tomorrow 24th March, 2017 after making its result public, my opinion is, much may not change, and if all, its price should increase from  #32.3k with a dividend yield of 3.10%.


Corporate Action
Proposed Dividend:     10 kobo (2015: 5 kobo)
Proposed Bonus:         Nil
Closure Date:              To be advised
AGM Date:                  To be advised
Payment Date:            12^th May, 2017