Tuesday 20 January 2015

Unilever - 2014 Full Year Results

In the late 19th century the businesses that would later become Unilever were among the most philanthropic of their time. They set up projects to improve the lot of their workers and created products with a positive social impact, making hygiene and personal care commonplace and improving nutrition through adding vitamins to foods that were already daily staples.

Unilever's founding companies produced products made of oils and fats, principally soap and margarine. At the beginning of the 20th century their expansion nearly outstripped the supply of raw materials.

Unilever has become one of the world's leading suppliers of fast-moving consumer goods. Some well-known brands :
Foods - Bovril, Marmite, Flora Margarine, PG tips, Pot Noodle, Ben & Jerrys Ice Cream, Colman’s Mustard, Magnum Ice Cream, Hellmann’s Mayonnaise

Personal Care - Dove soaps, Timotei Shampoo, Lynx Deodorant, Sure Deodorant, Vaseline, Brylcreem

Home - Domestos, Cif, Persil, Comfort, Surf

The company states that more than 2 billion consumers worldwide use a Unilever product every day.


My previous post on Unilever was at the same point last year. Today they have announced results for the full year to 31st December 2014 (link via Investegate).

The Company reported a 2.9% rise in underlying sales and an 11% increase in core earnings per share.

Overall, the figures are slightly weaker than analysts were forecasting and the share price is currently down a little compared to the wider market at £27.15. The share price has risen around 10% over the past year.

Unilever said underlying growth in emerging markets, where it makes more than half its sales, slowed to 4.3% and profit margins were flat, due to currency issues and softer conditions in China and Africa.

Developed markets were also fairly flat with a modest pick-up in the Americas offsetting a turndown in the Eurozone.

CEO, Paul Polman said "Despite a challenging year for our industry with significant economic headwinds and weak markets we have delivered another year of competitive underlying sales growth and margin expansion. This consistency, now established over the last six years, has been achieved during a period of high volatility as we have built a more resilient company.

We have increasingly focussed on our core business and have sharpened the strategy across each of our four categories. In today's low growth environment we are driving efficiency and simplification initiatives to make the organisation more agile and more capable of responding to the unexpected. We have continued to remove cost and to streamline processes to provide fuel for growth. Our innovation programmes have further accelerated and we have exported our iconic brands into new markets. We have continued to use acquisitions and disposals to strengthen the portfolio".


A 4th quarterly dividend of 28.5 euros - 21.8p will be paid in March. This will make a total of 114 euros for the full year - an increase of  5.9% but after FX conversions, just 90.2p for the full year (91.05p 2013). Current yield for the UK holder is around 3.4%.

Unilever is one of those companies with strong brands and a wide economic moat which helps it to maintain an edge over competitors and provide good long-term returns for patient investors. It is a top holding for Nick Train’s Finsbury Growth & Income Trust comprising around 9.0% of the portfolio.

3 yr comparison v FTSE 100
(click to enlarge)

Warren Buffett said “Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with managers of the highest integrity and ability. Then you own those shares forever.”

Although returns have been affected by currency fluctuations, these things have a way of balancing out over the longer term. Unilever is a top three holding and one of the stalwarts of my shares portfolio and is likely to remain so for many years.

Feel free to leave a comment if you own Unilever in your portfolio or if you are thinking of buying this share.


  1. I'm a fellow ULVR holder. It's one of my favourites. I don't expect anything spectacular from it but nice steady growth and resilient capital value.

    1. Hi UTMT,

      I agree, nothing spectacular, resilient and steady growth - just the sort of company I like. Emergin market sales have come under pressure in the past couple of years - but still growing. The falling energy costs should be a boost over the coming year or so - be interesting to see how this affects the bottom line.

      The only slight concern is the falling free cashflow cover - down from 1.25x to 1.1x - be good to see this addressed.