Consumer Products and Services

Unilever yet to convince on dual structure

19 Dec 2005

The AngloDutch consumer giant has decided against scrapping its dual listing, dashing hopes that the move would pave the way to a breakup. But Unilever still trades below the sum of its parts. Until its operating performance improves, doubts over its structure will persist.

Puma delivers the goods in Q3

4 Nov 2005

The German sportswear maker has produced strong figures yet again, but it needs to expand to compete in a consolidating sector. The key to this is growing its market share in footwear. Until the results of this are clear, the shares will trade at a discount to rivals.

Unilever beats Q2 expectations

4 Aug 2005

The food and household goods group grew underlying sales by 3.3% despite weak European markets and did so without sacrificing margins. That's encouraging. But in the absence of company guidance, it is still too soon to talk of a turnaround.

Adidas buys Reebok for E3.1bn

3 Aug 2005

The German sports shoe maker will almost match market leader Nike in size after buying Reebok. But it will pay handsomely for the privilege. It is not clear whether the cost synergies will justify the 34% premium paid. And the revenue benefits are questionable.

J&J/Guidant deal spread looks wide

22 Jun 2005

Guidant shares fell to a 10% discount to Johnson & Johnson s offer price after the medical devices group offered to replace heart implants. But the deal is likely to go ahead as planned. Replacements aren t typically expensive unlike the deal s $750m break fee.

Two cheers for Unilever

6 May 2005

At last, good news from the AngloDutch group. First quarter results weren t as bad as expected, and it seems Burgmans may step down early. But it is too early to tell wether Unilever has turned the corner. Meanwhile, it continues to significantly underperform its peer group.

Beiersdorf faces challenging 2005

30 Mar 2005

The consumer goods group s sales growth in its largest market, Europe, is slowing, and competition in other markets is increasing. Beiersdorf may need to consider a tieup if it is to continue growing.

Electrolux spins off outdoor products business

16 Feb 2005

This is a change of tune. The home appliance maker previously claimed there was industrial logic in keeping its activities under one roof. But a spinoff makes sense. It will unlock value and free up management to focus on reviving the ailing white goods business.

Unilever grasps half the nettle

10 Feb 2005

The good news is that the consumer goods giant has abandoned its dual chairmanship structure and announced a E500m share buyback. The bad news is it will continue with its dual HQ, dual listing and the same bosses. What's more, trading in 2005 is likely to be tough.

Reckitt well placed to lead consolidation

9 Feb 2005

The household goods group insists that it doesn't need to do deals to maintain its remarkable sales and earnings growth. But with a cash pile, considerable debt capacity and a premium rating, it is unlikely to be a bystander in any further sector consolidation.

P&G acquires Gillette for $57bn

28 Jan 2005

The behemoth may be able to stand up to the likes of WalMart. It will also tower over rivals, forcing them to consider their own deals. Although the price is expensive, the announced synergies more than cover the premium paid to Gillette shareholders.

Unilever should be broken up

12 Dec 2004

There is no longer any compelling reason to keep the food and household products divisions as part of a single group. A demerger of the £33bn giant could generate an increase in value of up to 20% for shareholders in addition to any gains from greater focus.

J&J considers $24bn buyout of Guidant – report

7 Dec 2004

While this would be just the latest in a string of deals involving medical devices manufacturers, it would be the most important by far. Not only would it be the biggest, but it could trigger further consolidation.

Geox IPO will sound out appetite for growth

4 Nov 2004

The Italian shoemaker has an attractive story to pitch. It has been growing sales of its "breathing" shoes rapidly. But the equity story is as yet untested. This could limit the premium that the shares will obtain.

Unilever’s sales decline accelerates

27 Oct 2004

The consumer goods giant s leading brands supposedly the powerhouse of the business are going backwards. Unilever plans to up its ad spending to counter price deflation. So it isn t surprising that the new boss is reviewing its targets.

Electrolux cuts 2004 outlook

20 Oct 2004

But there are doubts about how radical these will be. And Electrolux s strong balance sheet may ensure survival but delay reform. The homeappliance maker plans some changes to deal with fierce competition and soaring raw materials costs.

Henkel moves to reduce conglomerate discount

7 Oct 2004

The German household products group is swapping its stake in US bleach giant Clorox for $2.8bn of cash and assets. While it has had to accept a 15% discount to Clorox s market value to pull off the deal, at least Henkel s getting a big tax break.

Electrolux adds to the profits gloom

23 Sep 2004

Yet another consumer staples company is struggling with high input costs and a lack of pricing power. Electrolux has been propping up its share price with a fat dividend. But doubts are surfacing over its ability to keep paying out.

Henkel slashes sales growth target

6 Jul 2004

The German retailer's problems at home stagnant markets and tougher price competition have spread further across Europe. Henkel saw trouble ahead hence its purchase of America's Dial. But bedding down this deal well is now more important than ever.

Reckitt Benckiser rockets in Q1

13 May 2004

But despite its strong performance at an operating level, the stock has raced ahead so far that there isn't much upside left. There's still some discount compared to rivals like P&G. But unless it can use its balance sheet better, the gap won't narrow rapidly.