UNVR Feb2025

UNVR

Contact our analyst Eka

10% Upside, Hold
20th February 2025
Price Rp 1440
Target price Rp 1590

Sales continue to decline, but show some improvement in Q4 2024

UNVR’s sales continued to decline in Q4 2024, but the Food & Refreshment (FR) segment showed slight improvement. Total sales fell -4.7% YoY and -7.8% QoQ to IDR 7.72 trillion. For FY 2024, total sales dropped -8.99% YoY to IDR 35.14 trillion, the lowest level since 2014. Domestic sales declined -7.5% YoY to IDR 7.57 trillion in Q4 2024 and -8.7% YoY to IDR 34.15 trillion for FY 2024. Export sales saw a steeper drop of -17.7% YoY.
The decline, partly due to lower volume growth and lower price growth in line with management actions by correcting misaligned pricing across channels and resetting stock levels impacted to customer stock reduction in Q4 2024 and booked the lowest stock level in mores than 10 year in December 2024.
Price declines: -1.9% YoY, while volumes dropped -2.4% YoY—both showing slight improvement from Q3 2024.
2024 full-year: Prices fell -3.0% YoY, while volumes declined -5.2% YoY.

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Segment Performance

Food & Refreshment (FR): Sales grew +0.4% YoY but declined -5.7% QoQ to IDR 2.88 trillion. Gross profit margin (GPM) slipped from 45% in Q4 2023 to 44%, though it improved from 43% in Q3 2024.
Home & Personal Care (HP): Sales declined -7.6% YoY and -9.0% QoQ to IDR 4.83 trillion. GPM dropped significantly from 50% to 45%.

Strategic Outlook

Looking ahead, UNVR remains focused on addressing operational inefficiencies through a go-to-market transformation, expanding store coverage, enhancing distribution trade digitalization, and strengthening brand investments. Management anticipates gradual improvements by H2 2025.

Q4 2024 Results: Transformation Costs Pressure Margins

UNVR’s bottom line was significantly impacted by transformation costs, stock reductions, and other operational adjustments:
Net profit fell -41.3% YoY and -33.9% QoQ to IDR 358.9 billion, bringing the net profit margin (NPM) down to 4.6%.
FY 2024 net profit stood at IDR 3.36 trillion, with an NPM of 9.6%.
Advertising & market research expenses rose to 8.8% of FY 2024 revenue and 5.8% in Q4 2024, while higher one-off remuneration costs further pressured profitability.
Operating profit margin declined to 12.6% in 2024, largely due to increased marketing and transformation-related expenses.
Gross profit margin (GPM) dropped from 49.7% in 2023 to 47.6% in 2024, reflecting the impact of stock reductions and pricing adjustments.

Valuation: Maintained hold with lower TP 1,590

We expect UNVR’s transformation initiatives to yield long-term operational improvements. However, given near-term challenges, we lower our target price to IDR 1,590, reflecting a +10% upside and a 17.4x PE target over the next year. We maintain our Hold recommendation.

Previously

UNVR Oct2024