Unilever’s premiumization strategy could see valuation rise 20 percent as margins climb

January 11, 2017 Written by 
Unilever’s premiumization strategy could see valuation rise 20 percent as margins climb REN skincare

Unilever could increase its valuation by up to 20 percent should its premiumization and zero budgeting strategies pay off, according to a report published by Trefis.

The Anglo-Dutch FMCG giant has an average EBITDA margin of around 18 percent, considerably below the 25 percent standard at rival Procter & Gamble, and 24 percent at Colgate-Palmolive, according to Trefis.

The analyst attributed Unilever’s lower margins to high raw material and marketing costs, and a portfolio skewed towards the mass market.

Unilever is taking steps to increase margins, with a zero-based budgeting edict ushered in last year designed to reduce marketing costs and a rapidly growing premium beauty portfolio.

 

Georgina  Caldwell

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