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UNVR
Unilever, higher capital payouts
🎯🧴📈➡️ Rp12,198
12 month free cashflow +Rp7,624bn ⬇️
August 10th, 2020
⏰ 1 minute read
⏰ 1 minute read
Watch the 3 minute explainer using the data file & model ⬇️
Sales
Sales growth was down at -2% compared to a year ago in the 2Q which is 5% below our forecast; the growth slowed from +5% in the 1Q. Personal care sales were down -1%, food was down -3%. We expect a recovery in sales from the 3Q onwards which results in 0.7% growth in the next 12 months to Rp43.5tn.
Cashflow
Cashflow in the 2Q was higher at Rp1.97tn excluding working capital. While the last 12 months average quarterly cashflow is at Rp1.9tn. Cashflow has been stable as investment spending has slowed down. With our forecast for slight sales growth in the next 12 months, we also get a very stable next 12 months average free cashflow of Rp1.96tn per quarter.
Sales growth was down at -2% compared to a year ago in the 2Q which is 5% below our forecast; the growth slowed from +5% in the 1Q. Personal care sales were down -1%, food was down -3%. We expect a recovery in sales from the 3Q onwards which results in 0.7% growth in the next 12 months to Rp43.5tn.
Cashflow
Cashflow in the 2Q was higher at Rp1.97tn excluding working capital. While the last 12 months average quarterly cashflow is at Rp1.9tn. Cashflow has been stable as investment spending has slowed down. With our forecast for slight sales growth in the next 12 months, we also get a very stable next 12 months average free cashflow of Rp1.96tn per quarter.
Slightly higher sales, steady cashflow, rising payouts, higher shares...
Balance sheet
The balance sheet is back in net cash as of the 2Q. UNVR cycles from net debt to cash depending on the payment of dividends. The net cash was at Rp360bm in the 2Q. With our forecast for steady cashflow ahead & including a forecast Rp7.4tn dividend payout, the next 12 months net cash will be slightly higher to Rp805bn.
Profit
While the sales declined slightly, profit was down by -10% compared to a year ago. The cash cost ratio of net profit add depreciation minus sales as a % of sales was higher at 81% from 79,% bringing the last 12 months ratio to 80%. We use the 80% to predict a small +0.8% next 12 months profit of Rp7.38tn.
Value
UNVR current market value is at Rp310tn. That’s 7.12X our sales forecast, 14.65X the value of the total assets & 35.26X the equity with a profitability of 83.9%. That’s quite amazing. Yield is forecast at 2.36%. We use our 1.6% cashflow valuation with a small 5% discount because of the rising payouts which gives a higher target price of Rp12,198.
The balance sheet is back in net cash as of the 2Q. UNVR cycles from net debt to cash depending on the payment of dividends. The net cash was at Rp360bm in the 2Q. With our forecast for steady cashflow ahead & including a forecast Rp7.4tn dividend payout, the next 12 months net cash will be slightly higher to Rp805bn.
Profit
While the sales declined slightly, profit was down by -10% compared to a year ago. The cash cost ratio of net profit add depreciation minus sales as a % of sales was higher at 81% from 79,% bringing the last 12 months ratio to 80%. We use the 80% to predict a small +0.8% next 12 months profit of Rp7.38tn.
Value
UNVR current market value is at Rp310tn. That’s 7.12X our sales forecast, 14.65X the value of the total assets & 35.26X the equity with a profitability of 83.9%. That’s quite amazing. Yield is forecast at 2.36%. We use our 1.6% cashflow valuation with a small 5% discount because of the rising payouts which gives a higher target price of Rp12,198.
