10th Feb 2022 08:20
(Alliance News) - Consumer products maker Unilever on Thursday hailed the progress of its restructuring programme, as the under-fire firm launched another large share buyback programme and promised to make no major acquisition in the "foreseeable future" after its failed tilt at the GSK Consumer Healthcare business.
In January, Unilever announced major changes to organisation to make it simpler and more category-focused. The company will be organised around five category-focused business groups, each responsible and accountable for their strategy, growth and profit delivery. The new organisation is expected to generate around EUR600 million of cost savings over two years, it said.
For 2021, Unilever generated revenue of EUR52.44 billion, up from EUR50.72 billion in 2020. The figure was higher than the company-compiled consensus forecast of EUR52.11 billion. Pretax profit rose to EUR8.6 billion from EUR8.0 billion the year prior.
Underlying pretax profit was EUR9.6 billion, up from EUR9.4 billion in 2020. Underlying sales growth was 4.5% in 2021, beating the consensus estimate of 4.3%.
Unilever declared a quarterly dividend of EUR0.4268 per share, which results in 3% dividend growth for 2021.
The company also said it will conduct a share buyback programme of up to EUR3 billion over the next two years, which it expects to commence in the first quarter. This matches the amount of share buybacks the company completed in 2021.
Looking ahead, Unilever expects underlying sales growth in 2022 in the range of 4.5% to 6.5%. It also expects high input cost inflation in the first half of over EUR2 billion. This may moderate in the second half to around EUR1.5 billion, it noted.
Unilever is facing pressure from activist investors, after a failed attempt to buy the consumer healthcare arm of drugmaker GlaxoSmithKline for GBP50 billion.
"We have engaged extensively with our shareholders in recent weeks and received a strong message that the evolution of our portfolio needs to be measured," said Chief Executive Officer Alan Jope.
"We therefore do not intend to pursue major acquisitions in the foreseeable future and will conduct a share buyback programme of up to EUR3 billion over the next two years."
Unilever shares were down 3.3% early Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 7,669.47
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Hang Seng: up 0.2% at 24,878.24
Nikkei 225: closed up 0.4% at 27,696.08
S&P/ASX 200: closed up 0.3% at 7,288.50
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DJIA: closed up 305.28 points, 0.9%, at 35,768.06
S&P 500: closed up 1.5% at 4,587.18
Nasdaq Composite: closed up 2.1% at 14,490.37
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EUR: down at USD1.1426 (USD1.1437)
GBP: down at USD1.3541 (USD1.3551)
USD: up at JPY115.60 (JPY115.44)
Gold: up at USD1,836.01 per ounce (USD1,830.69)
Oil (Brent): down at USD91.55 a barrel (USD91.90)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's key economic events still to come
speech by BoE Governor Andrew Bailey at TheCityUK annual dinner
0830 EST US consumer price index
0830 EST US jobless claims
0945 EST US consumer comfort index
1030 EST US EIA weekly natural gas storage report
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Hopes are rising that efforts to stop Russia from invading Ukraine may be starting to pay off, as the diplomatic push picks up Thursday with German Chancellor Olaf Scholz to meet Baltic leaders in Berlin and UK Prime Minister Boris Johnson heading to NATO and Poland. In the face of the worst stand-off between Russia and the West since the Cold War, diplomatic action has kicked into high gear with European leaders zipping across the continent seeking to defuse the crisis. Ahead of his huddle with Baltic leaders, Scholz said he saw "progress" on the diplomatic front. "The task is that we ensure the security in Europe, and I believe that that will be achieved," he said at a joint press conference with Danish Prime Minister Mette Frederiksen on Wednesday. The new German chancellor, who has been under fire over accusations that he has dithered over the crisis, will travel to Kyiv and Moscow next week for separate meetings with Ukraine and Russia's leaders, including his first face-to-face with President Vladimir Putin.
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Downing Street staff are braced for questions from UK police as detectives investigating lockdown parties in No 10 begin contacting those believed to have been involved. Scotland Yard said by the end of the week officers from Operation Hillman will have started sending out formal legal questionnaires to more than 50 individuals. The events under investigation include a number known to have been attended by PM Johnson, raising the prospect that he will be among those receiving a demand for answers in their inboxes. The announcement came after the Metropolitan Police said they would be widening their inquiries to cover a quiz night in No 10 in December 2020 after a photograph emerged of Johnson's wife and colleagues near an open bottle of sparkling wine. In a statement the force said the questionnaire would ask for "an account and explanation of the recipient's participation" in an event which is the subject of police inquiries.
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BROKER RATING CHANGES
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RBC raises B&M European Value Retail to 'sector perform' (underperform) - price target 600 pence
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Deutsche Bank raises GlaxoSmithKline price target to 1,500 (1,350) pence - 'hold'
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Deutsche Bank raises Barratt Developments target to 862 (832) pence - 'buy'
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COMPANIES - FTSE 100
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AstraZeneca reported a rise in annual revenue which the drugmaker attributed to its pipeline and commercial delivery, alongside an accelerated strategic transformation through the acquisition of Alexion Pharmaceuticals. For 2021, revenue rose to USD37.42 billion from USD26.62 billion in 2020. Looking ahead, for 2022 AstraZeneca guided at constant exchange rates for a high-teens percentage increase in total revenue and a mid-to-high twenties percentage increase in core earnings per share.
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Data analytics provider Relx said it delivered strong profit growth in 2021 reflecting its strategy of focusing on the organic development of "increasingly sophisticated" analytics. For 2021, Relx generated revenue of GBP7.24 billion, up from GBP7.11 billion in 2020, with underlying growth of 7%. Pretax profit was GBP1.80 billion, up from GBP1.48 billion in 2020. Relx raised its annual dividend by 6.0% to 49.8 pence from 47.0p the year before and said it will launch a GBP500 million share buyback in 2022. Looking ahead, the Anglo-Dutch firm expects 2022 full year underlying growth rates in revenue and adjusted operating profit, as well as constant currency growth in adjusted earnings per share, to remain above historical trends.
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Prudential said Chief Executive Officer Mike Wells intends to retire from his role at the insurer at the end of March 2022 and will not stand for re-election as a director at the next annual general meeting. Prudential said it is conducting a search for a CEO to be based in Asia to succeed Wells, which includes both internal and external candidates. Wells became CEO in 2015, having first joined the insurer in 1995. Mark FitzPatrick, currently CFO and COO, will become interim CEO when Wells steps down. FitzPatrick has asked the board not to consider him for the permanent CEO role, the company said.
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COMPANIES - FTSE 250
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Watches of Switzerland said demand for luxury watches remains "very strong" in the US and UK, as it reported a big rise in third-quarter revenue. Total revenue in the 13 weeks that ended January 30 was GBP348.1 million, up 28% from GBP272.6 million a year before and up 37% from the third quarter of financial 2020. The retailer now expects full-year revenue and profit to be towards the top end of the guidance that it provided back in November. At the time, the company guided for revenue of between GBP1.15 billion and GBP1.20 billion for financial 2022, up from GBP905.1 million in financial 2021.
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COMPANIES - GLOBAL
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Steelmaker ArcelorMittal reported a record annual profit for 2021, buoyed by the soaring prices of raw materials after a loss the previous year. The company reported net income of USD14.96 billion following a USD733 million loss in 2020. Sales jumped 44% to USD76.57 billion from USD53.27 billion. The group lost its top stop as the world's biggest steel company to China's Baowu in 2020 after the pandemic caused the global economy to sink. Demand for raw materials and commodities soared last year as economies emerged from Covid restrictions, causing prices to jump. "The global economic rebound post initial Covid-19 restrictions being lifted supported buoyant demand in all markets delivering very high levels of profitability," said Chief Executive Aditya Mittal.
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Thursday's shareholder meetings
Benchmark Holdings PLC - AGM
BMO Capital & Income Investment Trust PLC - AGM
easyJet PLC - AGM
Foxtons Group PLC - GM re Douglas & Gordon disposal
SEC Newgate SpA - GM re delisting from AIM
Tritax EuroBox PLC - AGM
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By Tom Waite; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.
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UnileverBarratt DevelopmentsGlaxosmithklineB&MWatches Switz