Equity Analysis /
Nigeria

Unilever Nigeria: UNILEVER NIGERIA: Earnings strong again in 3Q 17, but we maintain Sell on valuation grounds

    Esili Eigbe
    Esili Eigbe

    Head of Consumer Research

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    Tellimer Research
    23 October 2017
    Published byTellimer Research
    Unilever Nigeria reported 9M17 earnings last Friday, posting EPS of NGN1.28, +208% yoy. This implies Q3 17 EPS of NGN0.30, +196% yoy and -45% qoq.
    Other highlights
    (1) Revenue: +39% yoy to NGN69.1bn in 9M17, +37% yoy and +5% qoq.
    (2) EBIT: +222% yoy to NGN9.2bn, +425% yoy and -24% in Q3 17.
    (3) PBT: +352% yoy to NGN6.8bn, +916% yoy and -38% qoq in Q3 17.
    (4) Net operating cash flow: +59% yoy to NGN4.1bn in Q3 17.
    (5) Goss debt: -60% qoq to NGN8.0bn.
    (6) Capex: +77%, but fell 43% to NGN667mn in Q3 17.
    This is another set of strong results from Unilever Nigeria… but we maintain our Sell rating on valuation. Unilever Nigeria trades on a FY18f P/E and EV/EBITDA of 39.2x and 18.6x respectively, a premium to GEM consumer peers trading on a FY18f P/E and EV/EBITDA of 23.6x and 13.3x respectively.