---
endpoint: analytics
pattern: Consumer
status: done
latency_ms: 381136
conversation_id: 05c1f324-ed19-47b8-a2c1-5432bdb16cd2
citations: 15
created: 2026-05-31 22:14:38Z
---

# Provide a one‑year narrative of Unilever Indo, outlining how business performance, market conditions, and company actions shaped investor sentiment and valuation.

# Unilever Indonesia (UNVR IJ): One-Year Narrative

A year ago, Unilever Indonesia was a falling knife — a former defensive blue chip whose self-inflicted "transformation" had collided with a religious-boycott overhang, accelerating market-share losses, and a deteriorating Indonesian consumer. Over the subsequent twelve months the story re-rated twice: first downward, as the cuts to earnings and target price chased the share price to multi-year lows; then sideways at the bottom, as management completed its pricing and distribution reset, sold the ice cream business, and produced the first sequential margin recovery — even while the top line stayed negative and CLSA continued to flag UNVR as a structural laggard in a downtrading consumer cycle. The result is a stock that has stopped falling but has not yet earned a re-rating, and an investor base now positioning around a 2H25 "show me" event and a special-dividend windfall from the Magnum carve-out.

---

## 1. The starting point — late 3Q24: a brand transformation that backfired

Coming into late October 2024, UNVR had already lost two-thirds of its value from the 2022 peak (1H24 chart shows the relative-to-index line falling from 110 in Oct-22 to 45 by Aug-24). The trigger for the next leg down was 3Q24 results. CLSA captured the moment in a note titled "Hitting the skids":

- **Volume collapsed by ~16% YoY in 3Q24** (vs. only −1.8% in 2Q24), as management's "transformation strategy" — forcing inventory out of the trade to reset distribution velocity, while harmonising channel pricing — combined with a residual Israel/Gaza-related boycott impact and ongoing market-share erosion [2].
- **Gross margin fell to 45.5%** (vs. 49.5% in 2Q24), with transformation costs alone taking 190bps off; management responded by signalling a less aggressive pricing approach and a continued push on factory automation and FTE reduction [3].
- CLSA cut **24/25/26CL earnings by 28% / 24% / 23%**, lowered the target PE to capture the time required for the strategy to bear fruit, cut the **target price from Rp2,500 to Rp1,980**, and **downgraded the rating from Hold to Underperform** [1].

Investor sentiment at this point was one of capitulation: the stock had already printed −39% over 12 months as of late October 2024 and management's own guidance pushed "real" improvement out to 2H25 — i.e., almost a year away.

## 2. The strategic pivot — November 2024: divesting ice cream

A month later, the narrative gained its first structurally positive — and ambiguous — input. Following Unilever PLC's global decision to spin out ice cream, UNVR signed a **business transfer agreement to sell its Indonesian ice cream business to PT Magnum Ice Cream Indonesia for Rp7.0 trillion (pre-tax)** [4]. Three things mattered for the equity story:

1. **Earnings dilution but value accretion.** Ice cream contributed ~10% of group sales (~Rp3.5tn at 25CL run rate) and an estimated 8–10% net margin, implying ~Rp250–410bn of annual profit — i.e., a **6–9% hit to 25CL net income**. But the implied **20–28x transaction PE was above UNVR's own 19.8x/17.9x 24/25CL multiple**, making the carve-out value-accretive on a per-share basis [5].
2. **Structural cleanup.** UNVR's Indonesian ice cream share had **fallen from 59% in 2015 to 48% in 2023**, while Chinese-origin Aice climbed from 1% to 23%, with Campina and Glico filling the rest [6]. Walking away from a category losing economic moat was widely read as rational.
3. **Capital return optionality.** The disclosure said the proceeds would be returned to shareholders "in the short-term"; CLSA flagged a likely **special dividend**, analogous to the 2018 Blue Band divestment [6].

Sentiment took this as net-neutral on the running business, but as a positive on the balance sheet and on management's willingness to make hard portfolio choices. The share price, however, kept drifting (−45.8% on 12M basis by 25 November 2024).

## 3. The capitulation low — February 2025: FY24 prints

By the time the FY24 actuals landed in February 2025, the equity had already de-rated to a 12-month absolute return of **−49.5%**. CLSA's FY24 review ("Challenging moments") delivered the worst-case print and forced the next set of revisions:

- **FY24 revenue −9% YoY, net profit −29.8% YoY** to Rp3,369bn (EPS Rp88.30 vs Rp125.84 in FY23) [9].
- 2024 volumes declined ~5% with the rest of the sales drop driven by the pricing reset; FY24 gross margin compressed by 210bps, although CLSA noted GM was actually **flat YoY ex-transformation costs**.
- CLSA **cut 25/26CL earnings by 13% / 12%, lowered the target PE multiple from 18.5x to 15.5x (below −2 std. dev. of the 5-yr historical average), and cut the target price from Rp1,980 to Rp1,400**. The same note **upgraded the rating from Underperform to Hold** purely on the magnitude of the share-price pullback — i.e., risk/reward, not thesis [7].
- One genuinely improving operational data point: distribution-channel inventory was now at the **lowest level in 10 years, down ~50% since the program began in 2021**, with working capital normalising and direct distributor coverage being widened [8].

This was the trough phase of sentiment: rating cut to Hold, multiple cut to recession levels, dividend yield at **8.3% on FY24 actuals** [9] — a yield level that historically signalled either a value trap or an inflection. The market priced it as the former until the next print.

## 4. The first green shoot — April 2025: 1Q25 beats on margins

The April 2025 update ("Holding steady") was the first note in the cycle without an earnings downgrade. UNVR's 1Q25 earnings beat CLSA's number on **margin expansion and efficiencies**, not on a top-line recovery:

- **1Q25 sales Rp9,465bn: +23% QoQ but still −6% YoY**; gross margin recovered to **48.2% (vs 44.5% in 4Q24, but vs. 49.9% in 1Q24)**; operating margin rebounded to **17.1% (from 6.7% in 4Q24)**; **net profit Rp1,237bn, +245% QoQ but still −15% YoY** [11].
- Volume growth remained negative in the core: **Home & Personal Care was −13.4% YoY in 1Q25**, the worst print of the cycle, while **Food & Refreshment swung to a marginal +0.6% YoY** after seven straight quarters of declines [12].
- The strategic message: **price harmonisation and stock reduction are now done**; the next phase is brand equity rebuilding, distribution expansion, and cost efficiency. Management reiterated its 2H25 inflection guidance [10].

CLSA kept Hold and TP Rp1,400 — refusing to underwrite the recovery until volumes confirmed it. Sentiment shifted from "broken" to "stabilising but unproven."

## 5. The relative-positioning verdict — June 2025: still least preferred

By mid-June 2025, with the consumer-sector debate dominated by Indonesian downtrading and the acceleration of populist social-aid programs under the new administration, CLSA's sector framework ("Needs over wants") put UNVR explicitly on the wrong side of the cycle. In its top-picks vs. least-preferred grid, **Unilever Indonesia was named one of two "least preferred" staples names, with the rationale that "downtrading trend also means brand switching" and "home care is one of the most downtraded categories (less staples)"** [13].

CLSA's 2Q25 preview encoded that view in the model: **UNVR 2Q25E sales of Rp8,516bn, −10% QoQ and −5% YoY, with the explicit comment "Transformation strategy is still ongoing, affecting sell-in"** [14]. In other words, even as the rest of staples (ICBP +6%, MYOR +12%, CMRY +10%) was guided to grow into 2Q25, UNVR was modelled to extend its consecutive YoY-decline streak.

The valuation snapshot at June 2025 placed UNVR on **17.5x 25F PE and 16.2x 26F PE**, with **ROE still very high at 109% but on a depressed earnings base, sales growth of only ~1% in 25F, and EPS growth of ~5%** — the lowest growth profile in the domestic-staples weighted-average comp set.

## 6. The closing chapter — FY25 actuals (filed February 2026): divestment crystallised, base business steadier

The FY25 audited statements (filed 12 February 2026) closed out the year on broadly the lines management had guided, and crystallised the ice cream sale:

| Rp bn (Continuing operations only) | FY25 | FY24 (restated) | Δ |
|---|---|---|---|
| Net sales | 31,943 | 30,623 | +4.3% |
| Gross profit | 14,997 | 14,560 | +3.0% |
| Operating profit | 4,592 | 3,807 | +20.6% |
| Profit from continuing operations | 3,537 | 2,905 | +21.8% |
| Profit from discontinued operation (ice cream) | 309 | 464 | (33%) |
| **Gain on sale of discontinued operation** | **3,794** | — | — |

The Rp31.9tn continuing-ops revenue print confirmed a low-single-digit recovery in the running business once ice cream is stripped out, and a **+21% jump in continuing operating profit** showed the efficiency and margin reset were genuine [15]. The **Rp3.79tn realised gain on the Magnum sale** dropped to retained earnings, and **cash & equivalents jumped from Rp671bn (end-2024) to Rp5.7tn (end-2025)** — clearing the way for the long-flagged special distribution that the November 2024 announcement had pre-committed to.

## 7. What shaped the valuation through the year

Pulling the threads together, four forces drove the rerating path:

- **Self-inflicted top-line damage (negative, dominant 4Q23–1Q25)**: management's own transformation — channel inventory reduction, price harmonisation, brand-equity reset — was the primary cause of both the volume collapse and the margin compression, not just exogenous demand. Investors had to underwrite the strategy without confirming evidence; the market refused to do so until 1Q25 [2][3][9].
- **Macro/category headwind (negative, intensifying 2025)**: Indonesia's middle-class downtrading made UNVR's premium-skewed portfolio — particularly Home & Personal Care — disproportionately exposed. CLSA's June 2025 framework codified this as a structural rather than cyclical headwind [13][14].
- **Boycott overhang (negative, decaying through 2025)**: the Israel-related boycott impact, while no longer headline, was repeatedly cited as a residual drag on volumes and a reason to stay cautious on the recovery slope [2].
- **Portfolio and balance-sheet action (positive, asymmetric)**: the Magnum carve-out resolved a losing category, set up a value-accretive multiple arbitrage, and ultimately produced a Rp5+ trillion cash injection and special-dividend optionality — the only clearly positive thread in the year [4][5][6][15].

## 8. Where sentiment sits today

After a year, CLSA's headline call on UNVR has rotated from **Hold (Oct 2024 entry) → Underperform (Oct 2024) → Underperform (Feb 2025) → Hold (Feb 2025 on price) → Hold + "least preferred" (Jun 2025)** [1][7][13]. The target price has stepped down **Rp2,500 → Rp1,980 → Rp1,400** [1][7] and has not been raised even after the 1Q25 margin beat. FY25 actuals confirm operational stabilisation and a clean ice-cream exit [15], but the equity narrative remains gated on two unresolved questions:

1. **Can UNVR put up positive YoY volume growth in 2H25** — the original management guidepost — in a downtrading consumer with home-care losing share to local and Chinese competitors? CLSA's modelled 2Q25 (−5% YoY sales) still says "no, not yet" [14].
2. **What size and form will the special dividend take?** With Rp5+ trillion of cash on the balance sheet at end-2025 [15] and a stated intent to return value "in the short-term" [4][6], the next dividend declaration is the most-watched near-term catalyst.

Until those answers arrive, UNVR trades as a high-ROE, low-growth, high-payout name with structural top-line risk — a far cry from the defensive compounder it was perceived as eighteen months earlier.

---

**Sources**

[1] CLSA — Unilever Indo - U-PF (Hitting the skids), 24 Oct 2024 (607941817LinqAlpha.PDF)
[2] CLSA — Unilever Indo - U-PF (Hitting the skids), 24 Oct 2024 (607941817LinqAlpha.PDF)
[3] CLSA — Unilever Indo - U-PF (Hitting the skids), 24 Oct 2024 (607941817LinqAlpha.PDF)
[4] CLSA — Unilever Indo - U-PF (Ice cream divestment), 26 Nov 2024 (607945483LinqAlpha.PDF)
[5] CLSA — Unilever Indo - U-PF (Ice cream divestment), 26 Nov 2024 (607945483LinqAlpha.PDF)
[6] CLSA — Unilever Indo - U-PF (Ice cream divestment), 26 Nov 2024 (607945483LinqAlpha.PDF)
[7] CLSA — Unilever Indo - HLD (Challenging moments), 14 Feb 2025 (607950575LinqAlpha.PDF)
[8] CLSA — Unilever Indo - HLD (Challenging moments), 14 Feb 2025 (607950575LinqAlpha.PDF)
[9] CLSA — Unilever Indo - HLD (Challenging moments), 14 Feb 2025 (607950575LinqAlpha.PDF)
[10] CLSA — Unilever Indo - HLD (Holding steady), 24 Apr 2025 (607956782LinqAlpha.PDF)
[11] CLSA — Unilever Indo - HLD (Holding steady), 24 Apr 2025 (607956782LinqAlpha.PDF)
[12] CLSA — Unilever Indo - HLD (Holding steady), 24 Apr 2025 (607956782LinqAlpha.PDF)
[13] CLSA — Indonesia consumer (Needs over wants), 13 Jun 2025 (607961903LinqAlpha.PDF)
[14] CLSA — Indonesia consumer (Needs over wants), 13 Jun 2025 (607961903LinqAlpha.PDF)
[15] PT Unilever Indonesia Tbk — Annual Financial Statements 31 Dec 2025 / Q4 2025 filing (filed 12 Feb 2026)

## Citations

- [1] **607941817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/10/607941817LinqAlpha.PDF>
- [2] **607941817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/10/607941817LinqAlpha.PDF>
- [3] **607941817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/10/607941817LinqAlpha.PDF>
- [4] **607945483LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607945483LinqAlpha.PDF>
- [5] **607945483LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607945483LinqAlpha.PDF>
- [6] **607945483LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607945483LinqAlpha.PDF>
- [7] **607950575LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607950575LinqAlpha.PDF>
- [8] **607950575LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607950575LinqAlpha.PDF>
- [9] **607950575LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607950575LinqAlpha.PDF>
- [10] **607956782LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956782LinqAlpha.PDF>
- [11] **607956782LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956782LinqAlpha.PDF>
- [12] **607956782LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956782LinqAlpha.PDF>
- [13] **607961903LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961903LinqAlpha.PDF>
- [14] **607961903LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961903LinqAlpha.PDF>
- [15] **UNVR Q4 2025_FINAL (1).pdf** · external

