Shares
in
Unilever
(ULVR)
rose
2.7%
today
after
the
multi-national
consumer
goods
company
resleased
its
full-year
and
Q4
2023
results.
The
earnings
report
revealed
plans
for
a
further
€1.5
billion
(£1.3
billion)
share
buyback
during
2024,
maintaining
the
same
pace
as
in
2022
and
2023,
even
as
it
reported
a
decline
in
annual
profits.
The
London-headquartered
company
said
pretax
profit
fell
9.7%
to
€9.34
billion
in
2023
from
€10.34
billion
in
2022,
as
turnover
slipped
0.8%
to
€59.60
billion
from
€60.07
billion.
Unilever
declared
a
fourth-quarter
dividend
of
€0.4268,
unchanged
from
a
year
earlier.
The
new
share
buyback
programme
is
worth
up
to
€1.5
billion,
will
begin
in
the
second
quarter
of
this
year
and
will
complete
by
the
end
of
2024.
Last
year,
Unilever
completed
the
second
half
of
a
two-year
€3.0
billion
buyback
it
had
announced
at
the
start
of
2022.
Key
Morningstar
Metrics
for
Unilever
Stock
• Fair
Value
Estimate:
4,560p;
• Current
Price:
3,901p;
• Morningstar
Rating:
★★★★;
• Morningstar
Economic
Moat
Rating:
Wide;
• Morningstar
Uncertainty
Rating:
Low.
Morningstar
equity
analyst
Ioannis
Pontikis
says
that,
all
in
all,
the
company’s
latest
earnings
report
shows
“a
good
close
to
the
year”,
with
results
in
line
with
company-compiled
consensus
and
Morningstar
estimates.
Margins
improved
by
60
basis
points
during
the
year
with
gross
margin
up
200
basis
points
and
increased
investments
on
30
power
brands
(75%
of
sales)
consuming
130
basis
points,
in-line
with
the
newly
created
strategy.
Pontikis
also
notes
core
categories
are
performing
well,
with
both
beauty
and
wellbeing
and
personal
care
growing
volumes
in
Europe,
despite
widespread
consumer
downtrading
across
several
categories,
reflecting
robust
elasticities
and
brand
strength.
“Given
the
in-line
growth
number
and
guidance
for
the
full
year,
our
Fair
Value
Estimate
for
Unilever
is
unchanged
at
€52/$56/GBX
4,560,
with
minor
adjustments
for
currency
movements.
Shares
are
undervalued,”
he
says.
Modest
Margin
Improvements
Looking
ahead,
Unilever
expects
underlying
sales
growth
for
2024
to
be
within
its
multi-year
range
of
3%
to
5%,
with
more
balance
between
volume
increases
and
price
hikes.
It
said
it
anticipates
a
“modest”
improvement
in
underlying
operating
margin
for
the
full
year.
It
intends
to
deliver
this
via
gross
margin
expansion
“driven
by
a
step-up
in
productivity
and
net
material
inflation
back
to
more
normal
levels”.
Commenting,
chief
executive
Hein
Schumacher
said:
“today’s
results
show
an
improving
financial
performance,
with
the
return
to
volume
growth
and
margins
rebuilding.
“However,
our
competitiveness
remains
disappointing
and
overall
performance
needs
to
improve.
We
are
working
to
address
this
by
improving
our
execution
to
unlock
Unilever’s
full
potential.
“In
October,
we
set
out
a
growth
action
plan
focused
on
three
priorities:
delivering
higher-quality
growth,
stepping
up
productivity
and
simplicity,
and
adopting
a
strong
performance
focus.
The
new
leadership
team
has
embedded
the
action
plan
at
pace.
“We
have
increased
investment
behind
our
30
power
brands,
accelerated
portfolio
transformation,
and
are
driving
a
sharper
performance
focus
with
clear
and
stretching
targets
across
the
whole
organisation.
“We
are
at
the
early
stages
of
this
work
and
there
is
much
to
do
but
we
are
moving
with
speed
and
urgency
to
transform
Unilever
into
a
consistently
higher
performing
business”.
With
additional
contributions
by
Sunniva
Kolostyak
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