The consumer goods firm reported a 2.9% rise in underlying sales and an 11% increase in core earnings per share.
Although exchange rate fluctuations meant that sales in Unilevers reporting currency, the euro, fell by 2.7%, and earnings only rose by 2%, I tend to ignore such currency issues, as they normally even out over time.
Two big numbers
One of Unilevers key attractions for investors is the firms consistent profitability. Last year was no exception Unilevers operating profit margin increasedby 0.4% to 16.5%, continuing a multi-year run of growth that has seen the firms operating margin rise from 12.6% in 2009.
The other number that makes investing in Unilever such a stress-free experience is the firms free cash flow. This totalled 3.1bn last year, almost completely covering the 3.2bn Unilever paid in ordinary dividends.
Emerging market woes?
One concern ahead of todays results was that slowing growth in emerging market economies might have hurt Unilevers sales.
Todays results confirmed that there has been an impact. Although sales rose by 4.3% in emerging markets, profit margins were flat, due to currency issues and softer conditions in China and Africa.
Im not too concerned by this, given the strong sales growth, but it is worth monitoring over the next year.
Has the dividend been cut?
Todays final results confirmed the amount that will be paid for the fourth-quarter dividend in euros, pounds and US dollars. The amount UK shareholders will receive is 21.77p per share.
Sharp-eyed readers will notice that this is 7% less than the 23.38p paid in the first quarter of last year.
However, this is not a cut the fall is due to Unilevers dividend being declared in euros. As the pound has strengthened against the euro over the last year, the value of the dividend to UK shareholders has fallen.
This effect will probably reverse at some point, but its worth understanding that the drop is only due to adverse exchange rates.
Is Unilever still a buy?
Unilevers shares have fallen by more than 2% this morning, following the publication of the firms results.
Theres no doubt that Unilever shares are not cheap trading on 20 times 2015 forecast earnings, big gains are unlikely in the next couple of years.
Butthe real attraction is the long-term income and growth potential this company offers. All over the world, consumers buy Unilever products, often with unswerving brand loyalty.
In my view, the shares remain a buy for long-term investors — and I’m not the only Fool who holds this view.
The Motley Fool’s market-beating experts recently selected Unilever as one of only “Five Shares To Retire On“.
The five companies in this report operate in a range of different sectors, but all share certain qualities — healthy cash flow, long-term dividend growth and a strong, defensive position in their chosen markets.
I rate this report as a must read for long-term investors: to receive your free, no-obligation copy today, simply click here now.
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