Unilever 3rd Quarter Trading Statement

[idpickering]

Third quarter highlights

· Underlying sales growth 3.8% with volume 2.4% and price 1.4%

· Price growth in Argentina is excluded from Q3 USG due to hyperinflationary status. Reported growth would otherwise have been 4.5%

· Growth was high quality with an improvement in all three Divisions and strong volume growth in Asia AMET RUB

· Turnover was impacted by an adverse translational currency impact of 5.2%

· The net impact of acquisitions and disposals, which included the spreads disposal, reduced turnover by 3.3%


Paul Polman: Chief Executive Officer statement


"Growth accelerated in the third quarter across all Divisions. We were able to increase prices whilst still maintaining good volume growth which reflects the strength of our brands and quality of our innovation programme. Our focus s building our business for the long-term continues to deliver high quality growth.

We are progressively reaping the benefits of our Connected for Growth programme, which is now well embedded throughout the organisation, making us simpler, faster and better connected with our consumers. It is helping us accelerate growth in Asia AMET RUB, manage through the economic volatility in Latin America and shift our portfolio into faster growing segments and channels in all of our markets. Our innovation pipeline continues to strengthen and in the third quarter alone we have launched four new brands. We have now successfully completed the disposal of our spreads business and continue the acceleration of our efficiency programmes.

We continue to expect underlying sales growth in the 3% - 5% range, an improvement in underlying operating margin and strong cash flow. We remain on track for our 2020 goals."

https://www.investegate.co.uk/unilever- ... 00074063E/

[Dod101]

Sounds good. They should stick to the knitting and forget corporate restructuring.

Dod

[idpickering]

Sounds good. They should stick to the knitting and forget corporate restructuring.

Dod

I very nearly bought back into Unilever yesterday, but that would've meant me selling something else, so changed my mind. The bottom line is that they are a quality outfit. Just wished the yield on offer was more tempting though maybe?

Ian.

[Dod101]

You could maybe have bought in showing a profit! They are a quality outfit, whatever they know (or not) about corporate governance and that is down to culture, a long term view and conservative finances. I think the nonsense they embarked upon was based on naivety and Dutch nationalism.

Polman was probably right to keep out of it and concentrate on the day to day business. The chairman seems a pleasant enough mild guy and the Finance Director simply out of touch. I am sure some advisors enriched themselves as a result though.

I will try to get to the AGM in the spring next year.

Dod

[idpickering]

Thanks for that Dod. Those inclined to buy Unilever can do so even cheaper currently, as the sp is down nearly 2% as I type. Maybe the market expected a better statement? Who knows?

Ian.

[ADrunkenMarcus]

Dividend up 9.5% in Sterling terms for the 2018 calendar year. Nice.

11.5% CAGR since 1980.

[idpickering]

Dividend up 9.5% in Sterling terms for the 2018 calendar year. Nice.

11.5% CAGR since 1980.

Thank you for pointing that out. HYP is an income strategy, and that's where our focus should be. Market movements are very much secondary.

Ian.

[richfool]

I'm not clear on what the market thinks, unless it was the reference to ULVR having put up prices, but its down 2.00% currently, though that still doesn't bring the yield into HYP territory. I may top up if it keeps falling.

[Dod101]

I'm not clear on what the market thinks, unless it was the reference to ULVR having put up prices, but its down 2.00% currently, though that still doesn't bring the yield into HYP territory. I may top up if it keeps falling.

Actually I do not care what the market thinks.

Dod

[ADrunkenMarcus]

HYP is an income strategy, and that's where our focus should be.

Since my purchase in 2013 the dividend per share has risen about 50% and I have a yield on cost of 5.3%, likely rising to 5.7% in 2019.

Every individual has to make their own decision about dividend yield they are prepared to accept when they first purchase a company, but if you have a long term mindset then companies like Unilever tend to deliver a strong, growing income stream. I doubt it will match the 11.5% CAGR since 1980 (which is on a nominal basis - it would be lower on inflation-adjusted figures) but even half that figure is much better than so many other companies can achieve.

Best wishes

Mark.

[pyad]

Key point on the Q3 dividend not mentioned in the thread:

xd 01 Nov
pd 05 Dec

38.72 eurocents, sterling value 33.93p.

Historically their payout pattern is four equal divs per accounting year in euros, so the sterling values will vary.

[Arborbridge]

Key point on the Q3 dividend not mentioned in the thread:

xd 01 Nov
pd 05 Dec

38.72 eurocents, sterling value 33.93p.

Historically their payout pattern is four equal divs per accounting year in euros, so the sterling values will vary.

Making a very satisfactory growth rate of 8.34% on the sterling values. Lower than last year, but that's due to currency movements.

Arb.

[moorfield]

I very nearly bought back into Unilever yesterday, but that would've meant me selling something else, so changed my mind. The bottom line is that they are a quality outfit. Just wished the yield on offer was more tempting though maybe?

<pantomime>
Tut tut Ian, you should know better.
</pantomime>

Those who dare to buy ULVR now, or buy despite their overall portfolio yield remaining high, may be dissed/modded here.

Perhaps you should have held after all?

(And what made you sell in the first place, out of curiosity?)

[idpickering]

I very nearly bought back into Unilever yesterday, but that would've meant me selling something else, so changed my mind. The bottom line is that they are a quality outfit. Just wished the yield on offer was more tempting though maybe?

<pantomime>
Tut tut Ian, you should know better.
</pantomime>

Those who dare to buy ULVR now, or buy despite their overall portfolio yield remaining high, may be dissed/modded here.

Perhaps you should have held after all?

(And what made you sell in the first place, out of curiosity?)

Yeah I get you moorfield. Regarding selling out, I couldn't be doing with all the uncertainty regarding the company's move. I should've known better, you're right. To be honest, it's unlikely I will buy back into ULVR. There are better yields out there.

Ian.

[Arborbridge]

Yeah I get you moorfield. Regarding selling out, I couldn't be doing with all the uncertainty regarding the company's move. I should've known better, you're right. To be honest, it's unlikely I will buy back into ULVR. There are better yields out there.

Ian.

I empathise! Been there, done that - though I confess being mildly surprised that the stoic pyadic admirer in you did not trump the other half of your brain.

As regards buying back: there will always be better yields out there, that's the problem with ULVR (and RB). I've contented myself with buying on the rare occasion when the yield is "as good as it gets" for ULVR, and I daresay you will have a similar chance. However, the question will remain, "why buy on a barely acceptable yield when others offer more bang for the buck?".
Each must rationalise his own reason for doing so, and for continuing to hold.


Arb.

[idpickering]

Yeah I get you moorfield. Regarding selling out, I couldn't be doing with all the uncertainty regarding the company's move. I should've known better, you're right. To be honest, it's unlikely I will buy back into ULVR. There are better yields out there.

Ian.

I empathise! Been there, done that - though I confess being mildly surprised that the stoic pyadic admirer in you did not trump the other half of your brain.

As regards buying back: there will always be better yields out there, that's the problem with ULVR (and RB). I've contented myself with buying on the rare occasion when the yield is "as good as it gets" for ULVR, and I daresay you will have a similar chance. However, the question will remain, "why buy on a barely acceptable yield when others offer more bang for the buck?".
Each must rationalise his own reason for doing so, and for continuing to hold.


Arb.

Thanks for that Arb. I’m not saying I will never buy back in though.

Ian

[moorfield]

As regards buying back: there will always be better yields out there, that's the problem with ULVR (and RB). I've contented myself with buying on the rare occasion when the yield is "as good as it gets" for ULVR, and I daresay you will have a similar chance. However, the question will remain, "why buy on a barely acceptable yield when others offer more bang for the buck?".

And the question that follows, "why hold on a barely acceptable yield when others offer more bang for the buck?".

[Arborbridge]

As regards buying back: there will always be better yields out there, that's the problem with ULVR (and RB). I've contented myself with buying on the rare occasion when the yield is "as good as it gets" for ULVR, and I daresay you will have a similar chance. However, the question will remain, "why buy on a barely acceptable yield when others offer more bang for the buck?".

And the question that follows, "why hold on a barely acceptable yield when others offer more bang for the buck?".

Yes, quite I've heard the justification that after a few years, one is obtaining a good yield on the original investment, but the point still remains that one could swap the current yield for a better one.

The answer is in ULVR's perceived reliability. However, booking in four relatively small dividends a year one has to wonder if that is good enough reason. In my position - where income overall is enough to live on - I'm not too worried, and like ULVR as a "core" holding which usually seems to pay without drama.If I was happy with the ULVR income a few years back, why complain now? I ask myself. And as that income keeps increasing, I'm not about to beat myself up about the sub-par yield.

[ReformedCharacter]

Thanks for that Arb. I’m not saying I will never buy back in though.

Ian

My memory may be faulty but haven't you previously sold and bought back in?

RC

[Dod101]

The yield may be sub par but of course Arb knows as well as most on these Boards why Unilever is an attractive HYP share. Currently it may not quite meet the yield desirability for a HYP share but it certainly meets the dividend sustainability one and even more so in recent years anyway, the increasing one. There are not that many shares which have managed that, and it kept the increases up right through the crisis of 2007/8.

It is the sort of share that should be in almost every portfolio, if that is you are looking for long term sustainability. It will never shoot the lights out of course.

Dod