October 21, 2011
Prior Recommendation Date of Last Change Current Price (10/20/11) Target Price
Outperform 10/21/2011 $32.72 $34.00
SUMMARY We have downgraded our recommendation on Unilever to Neutral from Outperform. The company posted robust first half 2011 earnings of $1.08 per share, surpassing the year-ago estimate by 10% on the back of improved volumes despite price increases. Further, the emerging markets business continues to deliver double digit growth. Management s recent organizational changes have also resulted in cost savings, which augurs well for future operating performance. Moreover, the company has a ...view middle of the document...
79 A $1.98 A $2.15 E $2.31 E
2009 2010 2011 2012
Projected EPS Growth - Next 5 Years %
2009 results translated at US$1 = 0.72 2010 results translated at US$1 = 0.75 1 ADR = 1 Shares; Quarterly earnings and revenue figures are N/A
3 - Hold
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111 North Canal Street, Chicago IL 60606
Founded in 1885 and based in London, the United Kingdom, Unilever PLC is a subsidiary of The Unilever Group, and was formerly known as Lever Brothers Limited. With revenues of $58.8 billion in 2010, Unilever is a leading manufacturer and marketer of consumer products in the world with significant presence across developed, developing, and emerging markets. The company commands marketleading positions in savory, spreads, dressings, tea, ice cream, deodorants and mass skin care product categories and its top 12 brands all have sales of more than a billion euros, and with a further eight brands with sales of more than half a billion euros, and its top 20 brands represent around 70% of sales. Unilever has around 264 manufacturing facilities spread across the globe, while its products are sold in more than 180 countries. On January 1, 2001, Unilever adopted the euro as its principal reporting currency, and currently reports its operating results under four segments: Savory, dressings & spreads is the flagship segment, which includes soups, bouillons, sauces, snacks, mayonnaise, salad dressings, margarines, spreads and cooking products such as liquid margarines and frozen foods. Major brands in this segment are Knorr, Hellmann s, Becel/Flora, Rama/Blue Band, Calvé, Wish-Bone, Amora, Ragú and Bertolli. During 2010, this segment contributed 32% to total sales. Personal care segment includes mass skin care, daily hair care and deodorants product categories. Major brands in this segment are Dove, Lux, Rexona, Sunsilk, Axe/Lynx and Pond s. During 2010, this segment contributed 31% to total sales. Home care segment consists of laundry products, such as tablets, traditional powders and liquids for washing clothing by hand or machine as well as household care products, such as surface cleaners and bleach. Major brands in this segment include Omo, Surf, Comfort, Radiant, Skip, Cif, Domestos and Sun/Sunlight. During 2010, this segment contributed 17% to total sales. Ice cream and beverages includes ice cream, tea-based beverages and weight management products. Major brands in this segment include Heartbrand, including Cornetto, Magnum, Carte d Or and Solero, Wall s, Ben & Jerry s, Breyers, Lipton, Brooke Bond and Slim Fast. During 2010, this segment contributed 19% to total sales. Unilever PLC is a subsidiary of The Unilever Group and is listed as American Depositary Receipts (ADRs) on the NYSE and as shares on the London Stock Exchange. Unilever PLC shares were exchanged into new 31/9 pence ordinary shares.
REASONS TO BUY
With sales of $58.8 billion in 2010, Unilever is a leading...