Analysts and market watchers seemed to be falling over themselves yesterday (8 May) to pat Unilever on the back for bucking the trend of an anticipated poor day in the UK financial sector.
UK
The London Evening Standard summed up the overall mood saying: “Inflation in the shopping basket is doing no harm to the bottom line of household goods giant Unilever.”
In the Daily Telegraph, columnist Damian Reece coined the term “the Cescau effect” reporting: “Unilever shareholders saw about £25 billion (€31.8 billion) of value added to their holdings from 2005 to the end of 2007 under the stewardship of Patrick Cescau… What makes Unilever one of the more comprehensive turnarounds is the fact that Cescau is now delivering growth on growth.” He concluded: “From profit warning to out-performing is quite a journey for the old lady of Port Sunlight.”
Graeme Evans of The Press Association reported Hargreaves Lansdown equity analyst Keith Bowman saying: “Unilever [is] heading in the right direction… This is an extremely encouraging start to 2008 with sales continuing to outpace expectations, profit margins still improving and management remaining optimistic for the outlook.”
International Agencies/Websites
Financial website MarketWatch.com reported unnamed Citigroup analysts saying: “Putting the undoubtedly strong results against this backdrop and keeping in mind the relatively weak year-to-date stock performance, we would expect a strong share price reaction.”
And Reuters went a little further. The international news agency’s Toni Vorobyova wrote: “[FTSE] losses were limited, however, by strong results from consumer goods conglomerate Unilever, which pushed up shares in the group by more than 4%, making it the largest individual positive influence on the broader market.” Stable mate David Jones agreed, reporting high praise from brokers Collins Stewart, whose analyst Rob Mann said Unilever’s “improved innovation has boosted its overall performance… A fifth consecutive quarter of underlying sales growth in excess of 5% begins to look like a trend.”
Matthew Scuffham, for Thomson Financial noted that the same analyst had highlighted the balance in growth between divisions. He quoted Mann as saying: “Having spent so long being held back by the supposed slow growth food business, that business grew quicker than the HPC side of the group.”
The Netherlands
Dutch newspaper Het Financieele Dagblad said Unilever had bolstered investors’ confidence “by showing growth in emerging markets” adding simply, “Unilever is doing well”. It quoted SNS Securities analyst Richard Withagen saying: “Unilever is showing evidence that it has returned to the league of best performing consumer goods companies.”
That mood was repeated in De Telegraaf, which said: “Unilever adjusts outlook upwards for the first time in six years.”
De Volkskrant, meanwhile relied on analysts to make the point. R J Vos, at Fortis was quoted as saying: “Competitors can be jealous of the enormous exposure Unilever enjoys in many emerging markets… Unilever itself has also raised its expectations. That is a clear sign.” While Theodoor Gilissen’s analyst J Meijer sounded a rare cautionary note, saying: “Of course Unilever will have to continue to explain any price increases it carries through.”
Asia
Pakistan’s Business Recorder(online) said Unilever “beat quarterly earnings forecasts, boosted by profits from disposals, as it raised prices to offset the rise in raw material costs.”
While across the border in India, Delhi’s Business Standard said Unilever had “recorded an underlying improvement in its operating margin of 30 basis points.”
South Africa
Business Report(online) reported that “aggressive pricing” had paid off, saying: “Increased prices and sales of Dove soap, Hellmann’s mayonnaise and Lipton tea would help Unilever beat its forecast for the first time in six years.”
Americas
The results earned positive comment north and south in the Americas region. Lionel Laurent, writing for US financial website Forbes.com said: “Investors were hungry for Anglo-Dutch consumer goods firm Unilever on Thursday, piling into the stock after a strong set of quarterly results vindicated the company’s pricing strategy.” He also quoted ABN Amro analyst Julian Hardwick saying: “I’m a high conviction buyer of these shares. I think the evidence is the strength and depth of recovery.”
And rival financial publisher Bloomberg was also upbeat, quoting Corne van Zeijl, who manages about $1.4 billion (€911 million) at SNS Asset Management in the Dutch town of Den Bosch, saying: “Unilever has done very well by aggressively raising prices… because of the structure of the company, they will probably never be able to build brands like Danone and Nestlé have and get similarly high prices for their products, but Unilever is getting close.”
Mexico’s financial newspaper El Financiero reported on its website: “The giant Anglo-Dutch food products, cleaning and hygiene company Unilever won a net profit of €339 billion in the first quarter, 32% more than the same period last year, thanks to sales in emerging countries and price increases.”
Technorati Tags: Unilever, Market, Finance, Out-perform, Forbes, MarketWatch, Daily Telegraph, Cescau, Port Sunlight, bloomberg
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