Just over a month ago, Unilever (ULVR) revealed that it would unify its Anglo-Dutch legal structure under one single parent company. The consumer goods behemoth said that such a move would increase its “strategic flexibility” for future M&A activity – something that it believes to be increasingly important in the more “dynamic” business context that the coronavirus crisis is creating. The group also proffered that the transition would reduce complexity and enhance corporate governance.
The first-half results – due out on 23 July – should shed further light on the progress of that plan to date. They will also reveal how the group fared during the peak of the lockdown period. For the first quarter to March, the impact of the pandemic was mixed – a reflection of Unilever’s diversified portfolio of brands. On the one hand, ice-cream and the group’s out-of-home divisions were knocked back by stay at home orders – but on the other, ‘wash your hand’ instructions helped to bolster sales of disinfectant.
Broker Jefferies expects the second quarter to be the weakest since its records began in 1996, and the first really negative three-month period since the third quarter of 2004. But for now, analysts here remain bullish – perceiving room for the stock to re-rate.
