Unilever Nigeria Plc delivered a resilient revenue expansion for the first half of 2026, with turnover rising +22.24% year-on-year to ₦119.92 billion (up from ₦98.10 billion in H1 2025).
Following the release of the scorecard, equity research analysts Modupe Arinde and Temiloluwa O. Oyenuga at Meristem Securities issued a “BUY” recommendation on the stock, placing a full-year 2026 target price of ₦162.35 per share—reflecting a +23.56% upside potential over its reference closing price of ₦131.40.
Growth across the consumer goods manufacturer’s operations was led by its anchor Food segment, which grew +31.31% YoY to ₦77.05 billion, while Beauty & Wellbeing expanded +21.00% YoY to ₦11.90 billion. The Personal Care segment delivered a modest +4.68% YoY gain. Topline expansion was anchored by volume gains, disciplined product pricing, and distribution execution across retail channels.
For the full year 2026, Meristem projects total revenue to grow +24.44% YoY to ₦266.68 billion, supported by household brand affinity, route-to-market investments, and broad product availability.
Cost Management vs. Operating Expense Pressures
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Gross Margin Expansion: Despite direct input cost pressures, revenue growth outstripped cost of sales growth (+16.43% YoY to ₦65.18 billion). Consequently, Unilever’s cost-to-sales ratio declined to 54.36% (from 57.07%), lifting gross margin by 271 basis points to 45.64%.
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Elevated Brand & Logistics Outlays: Operating expenses surged +29.80% YoY to ₦31.16 billion, driven by heightened marketing expenditure and a +58.82% jump in selling and distribution expenses due to fuel and logistics costs. Nevertheless, operating margin edged higher to 20.31% (from 19.18% in H1 2025).
Finance Costs and Tax Drag Temper Bottom-Line Growth
While operational performance remained robust, net earnings were constrained by non-operational drags:
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FX Losses Impact Finance Income: Finance costs jumped +250.91% YoY to ₦1.70 billion, primarily resulting from foreign exchange revaluation losses on foreign currency-denominated balances. Although finance income rose +11.82% to ₦6.51 billion on bank deposit interest, net finance income declined to ₦4.82 billion (down from ₦5.34 billion in H1 2025).
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Muted PAT Growth & Elevated Taxes: Post-tax profit rose by a modest +8.28% YoY to ₦15.60 billion, affected by higher corporate income tax charges and new tax levies. Net profit margin moderated to 13.01% (from 14.68%), while Return on Equity (ROE) stood at 14.94%.
Enhanced Shareholder Returns & Valuation
Demonstrating strong balance sheet liquidity, the Board of Directors declared a fourfold increase in the interim dividend to ₦2.00 per share (up from ₦0.50 per share in H1 2025), representing an interim dividend payout of ₦11.5 billion.
“Based on our expected EPS of NN6.78 and our target P/E of 23.95x we arrived at our target price of NGN162.35 for 2026FY. This implies an upside potential of +23.56% compared to the company’s closing price of NGN131.40 as of August 12th, 2026. Hence, we recommend a BUY on the stock,” the Meristem Securities analysts summed.
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