Mixed Q3 results

Although the overall results hit the mark, the disappointing performance in volume-mix and Business Winning MAT leaves much to be desired. Unilever’s ambitious drive for growth and profitability is appreciated, yet the latest update from the new CEO didn’t quite dazzle.

Unilever Exceeds Expectations: A Pleasant Surprise

The Q2 performance beat has been welcomed by the market with the stock up by 5.10% over the day. The driving forces behind this exceptional performance were the strong pricing power and better-than-anticipated volume resilience, particularly evident in the Beauty & Wellbeing and Personal Care segments, which constitute 43% of the group’s turnover. The FY outlook has been revised upward.

Sailing in troubled waters, Unilever delivers a strong Q1 results

Above our expectations, Unilever’s pricing drove Q1 growth, while volume remains under pressure (Nutrition and Ice Cream). Unilever remains confident in its ability to deliver at the upper end of its guidance.

Unilever PLC: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (02/23)

Unilever had a decent performance in 2022. It achieved underlying sales growth of 9.2% and a fair level of operating margin aligned with expectations despite the volatile period. It surpassed the revenue expectations of Wall Street in the last quarter. Prestige Beauty delivered outstanding double-digit growth with a strong performance by Paula's Choice. Hourglass, Tatcha, and Living Proof also had a strong quarter. Health & Wellbeing maintained double-digit growth, while the skin care segment ha

At least this is now clear

We welcome the transparency by the group, which has laid out the scenario we already had in mind: volumes still at risk and margin pressure. Nothing new, but the warning is all the clearer when it comes from a food giant.

A quarter’s reprieve before difficulties set in?

The FY sales guidance was upgraded but we are not convinced as we expect the difficulties to be felt very soon. We continue to expect Food players to be the most impacted by lower consumer disposable incomes.

Unilever ADR: Initiation of Coverage – Recent Strategic Shift, The Ben & Jerry’s Problem & Other Factors, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (10/22)

This is our first report on global consumer goods giant, Unilever. The company had a decent performance in 2021 and its growth continues to build in its first-half performance. Due to the company’s prompt pricing in reaction to severe commodity inflation, it has been able to keep investing in its brands. More than 80% of their revenue comes from brands whose power is consistent or increasing, demonstrating the strength of their brands. Unilever also uses its extensive market experience to deal w

We are not convinced

Reassuring update, given still low elasticities, and FY sales guidance increased. However, we continue to keep a cautious eye on the company for the next half given consumers’ changing habits which should become tougher in the coming weeks.

The pricing/volume balance questioned

A Q1 beat but we note above all that volumes are under pressure and that the FY guidance has been revised downwards. We remain cautious for the moment.

Such poor FY22 guidance was not expected

“Dramatic costs inflation” led the company to expect the FY22 margin to be down by between 140bp and 240bp. What a surprise, when the consensus was expecting -10bp, and us -30bp. The guidance obviously brings negative sentiment to other FMCG players.

GSK's Consumer HealthCare - why not, but not at this price

Unilever’s bid for GSK’s Consumer HealthCare division is causing a stir, as it seems totally unreasonable. The group was asked to move on portfolio rotation, but definitely not to be so ambitious at the risk of penalising shareholders.

Question mark regarding the pricing/volume trade-off

Mixed feelings following the Q3 results: the maintained FY margin guidance reassured in the current inflationary environment, but the Q3 volume decline raises questions about the trade-off between pricing and volumes.

A lowered margin target, which does not bode well for the sector

Q2 results were roughly in line with expectations. With little surprise, the FY21 margin outlook was cut given the price uncertainties of the raw materials. This is the first bad signal for the sector.

Surface Transforms - New guidance – forecasts under review

Surface Transforms has issued new revenue guidance for FY24, with the company now expecting revenues in the range £17.5-22m. We are withdrawing our previous forecasts for FY24 and withdrawing our price target while we review the impact of the new guidance.

Surface Transforms plc (SCE LN) - Forecasts and valuation withdrawn

We note the regulatory announcement this morning from Surface Transforms and withdraw our estimates and valuation, pending conversations with management.

Morning Note – 16 April 2024

Robust margin and cash performance

Surface Transforms (SCE LN) - Obstacles removed for higher production

Surface has issued a brief Q1 update. Production will ramp-up this year as final new equipment is installed, and manufacturing teething problems recede.

Initial Equity Trading Comments - 19 February 2024

Hybridan Small Cap Feast - 16/04/2024

16th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radical Limited for

Dowlais Group - Motoring forward

Dowlais Group’s first set of results were ahead of our expectations, with positive cash generation a highlight despite restructuring and demerger costs. Softer automotive markets will limit margin progress in FY24 towards the double-digit target. Despite this, margins of c 6.5% are still ahead of automotive peers, although the shares trade at a significant discount to our implied generic peer-based valuation.

Morning Note – 9 April 2024

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div

Morning Note – 4 April 2024

LIBERUM: New Energy Nuggets: Hydrogen - the future is green

Hybridan Small Cap Feast - 17 April 24

17th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Gooch & Housego (GHH LN) - A chink of light

Gooch has issued a positive update for H1. Trading has started to recover with stocking levels normalising at industrial and medical devices customers. The outlook is positive with growth returning, and management has confirmed our full year estimates (adjusted for the disposal of EM4). The order book and order flow appear healthy, and net debt is comfortable. Gooch clearly still has plenty to do to lift operating margins from a lacklustre 8.1%, but the transformation plan appears to be back on

Nexteq - FY23 adj EBITDA +4% ahead, FY24E upgrades of +1-10%

Nexteq’s FY23 results show adjusted EBITDA +4% ahead of the +6% upgrade at the January trading update, record FY23 EFCF of $17.4m, and a confident outlook that leads us to reiterate our FY24E revenue and upgrade FY24E gross profit, adj EBITDA, and EFCF by +1-10%. The strategic focus on higher-margin products and customers reducing elevated inventory levels led FY23 group revenue -5% yoy to $114.3m, with Quixant 6% lower at $69.3m and Densitron 2% lower at $45.1m. Effective supply-chain managemen