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UNVR, expecting higher dividends
🎯 🧼 📈 Rp12,451
Last 12-month cashflow +Rp7,577bn ⬆️
October 23rd, 2020
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Sales
Sales growth was again -2% in the 3Q, exactly the same as the 2Q from a year ago. Sales increased +.06% from the 2Q & was 1% below our forecast. Personal care sales increased +2% while the smaller food sales fell -11%. We expect sales to continue to rise in this next 12 months by a faster +4.5% to Rp44.96tn.
Cashflow
Cashflow in the 2Q was +Rp1,938bn which is almost exactly the same as our forecast +Rp1,942bn. Both operating cashflow & investment spending were a little bit lower than we had expected. We use the recent average investment spending which together with our higher sales forecast gives a slightly higher average quarterly free cashflow of Rp2tn for the next 12 months.
Sales growth was again -2% in the 3Q, exactly the same as the 2Q from a year ago. Sales increased +.06% from the 2Q & was 1% below our forecast. Personal care sales increased +2% while the smaller food sales fell -11%. We expect sales to continue to rise in this next 12 months by a faster +4.5% to Rp44.96tn.
Cashflow
Cashflow in the 2Q was +Rp1,938bn which is almost exactly the same as our forecast +Rp1,942bn. Both operating cashflow & investment spending were a little bit lower than we had expected. We use the recent average investment spending which together with our higher sales forecast gives a slightly higher average quarterly free cashflow of Rp2tn for the next 12 months.
Sales back to trend, rising cashflow, rising payouts again, higher shares...
Balance sheet
The balance sheet which was net debt because of high dividend payments came back to net cash in the 2Q, but after this year’s dividend was back to net debt in the 3Q of Rp2,260bn. With our forecast for more positive cashflow & assuming a higher dividend payment again of Rp5,986bn, net debt will be Rp246bn in 12 months’ time.
Profit
Net profit was Rp1,816bn in the 3Q, slightly higher than a year ago as the depreciation cost was lower. The cash cost ratio of net profit add back depreciation minus sales as a % of sales was the same at 81%. We use this 81% cost ratio to predict that the next 12 months profit will rise 2.2% to Rp7,483bn.
Value
UNVR continues to pay out capital. Payouts have reached Rp37.7tm since 2015 & will now accelerate again to Rp44tn this 12 months. At Rp313.8tn, it’s 6.98x sales, 14.24x assets, 39.31x equity with a 93.7% profitability & a forecast 1.45% yield. Our free cashflow forecast is now Rp8,001bn. At 1.6% with 0.95x adjustment, this gives a higher target price of Rp12,451.
The balance sheet which was net debt because of high dividend payments came back to net cash in the 2Q, but after this year’s dividend was back to net debt in the 3Q of Rp2,260bn. With our forecast for more positive cashflow & assuming a higher dividend payment again of Rp5,986bn, net debt will be Rp246bn in 12 months’ time.
Profit
Net profit was Rp1,816bn in the 3Q, slightly higher than a year ago as the depreciation cost was lower. The cash cost ratio of net profit add back depreciation minus sales as a % of sales was the same at 81%. We use this 81% cost ratio to predict that the next 12 months profit will rise 2.2% to Rp7,483bn.
Value
UNVR continues to pay out capital. Payouts have reached Rp37.7tm since 2015 & will now accelerate again to Rp44tn this 12 months. At Rp313.8tn, it’s 6.98x sales, 14.24x assets, 39.31x equity with a 93.7% profitability & a forecast 1.45% yield. Our free cashflow forecast is now Rp8,001bn. At 1.6% with 0.95x adjustment, this gives a higher target price of Rp12,451.
