Earnings Report /
Bangladesh

Unilever Consumer Care: Q3'22: c15% YoY earnings growth driven by operating efficiency improvement

  • High material costs lowered GM in Q3, but one-off gain hiked it in 9M.

  • In 9M’22, reported EPS stood at BDT 44.9 but if we adjust the one off-gain, EPS would be BDT 19.9.

  • Opex/sales: 340 bps decline YoY in Q3’22 due to enhanced efficiency.

IDLC Securities
26 October 2022
Published byIDLC Securities
  • Reported NPAT shows c15% growth in Q3’22 & c40% growth in 9M’22. EPS stood at BDT 15.5 in Q3 CY22 against BDT 13.5 in Q3 CY22. During 9M CY22, EPS stood at BDT 44.9 against BDT 32.1 in 9M CY22. Earnings growth was driven by lower operating expenses (Q3) and substantial amount of one-off gain (9M)

  • But if we adjust the one off-gain, 9M CY22 profits would be BDT 239mn (EPS BDT 19.9) which is 56% lower than the reported NPAT of BDT 540 mn. This would also place 9M CY22 yoy earnings growth at -38.1% which is substantially lower than the reported +39.7%.

  • Revenue: -4.8% YoY in Q3’22, +1% growth YoY 9M’22. Q3 revenue decline was due to health food drink sales — a major contributor to overall revenue — falling by 8% to BDT 1.0bn.

  • High material costs lowered GM in Q3, but one-off gain hiked it in 9M. GM fell 85 bps in Q3’22 due to high global commodity prices and BDT depreciation. However, 9M’22 GM rose 294 bps despite these external factors. We believe this may be due to a BDT 400 mn one-off gain in Q2’22 since GM stood at an abnormally high 54.5% then — far from 44-49% range.

  • Opex/sales: 340 bps decline YoY in Q3’22 due to enhanced efficiency. Opex/sales fell 340 bps to 23% in Q3’22 and 325 bps to 25% in 9M’22 because of the cost savings driven by increased operational efficiency.