Unilever (ULVR)

UNILEVER (ULVR)

Intro:
[Alison is dressed like a cleaner with a mop but posing like a pop star as cameras flash]

Alison:
I suppose you want my autograph?
Voice:
Do I?
Alison:
Don’t you recognise me?
Voice:
Not exactly.
Alison:
I bet you know all my hits. Persil, Domestos, Cif…
Voice:
Er…
Alison:
[hurt] But I’m famous!

Main
If Unilever isn’t a household name in your home then it should be.
The Anglo-Dutch giant is behind hundreds of well-known brands, from Dove shampoo and Lynx deodorant (or aphrodisiac, if you believe the adverts) to Domestos bleach and Persil washing powder.
There’s more to Unilever than cleaning, though.
It also makes many of the nation’s favourite foods, such as Magnum ice creams, PG Tips, Pot Noodle and – love it or hate it – even Marmite.
It manufactures and distributes these products all over the globe.
By rights, Unilever’s success should be underpinned by its brands, despite the ravages of the recession.
And its profits have held up well, rising by 9% to €3.2 billion in the first half of 2011, thanks to the aggressive roll-out of new products.
Magnum ice cream has launched in the US and Indonesia, while Dove Hair Damage Therapy will be selling in 30 markets by the year end.
But even Unilever is not immune to worldwide economic woes.
Despite cost cuts, tough trading conditions have eaten away at the company’s margins.
Underlying operating margins slipped by 20 basis points during the first half due to rising raw material prices.
Like many UK blue chips, management is looking to the East for inspirationand growth.
And so far so good – in its recent half-year results, Chinese and Indian markets generated double digit underlying sales growth.
Some analysts argue Unilever has greater exposure to lucrative emerging markets than its peers.
For those in search of income, the company also boasts a generous dividend yield.
So, with Unilever, the canny investor could clean up in more ways than one.