UNILEVER PAKISTAN

Meeting Everyday Needs of People Everywhere

Key Drivers of Industry .

• GDP Growth

The continuing trend of GDP growth in Pakistan restores confidence in the future prospects of increasing revenues.

• Low Inflationary Trends

Low inflationary trend has helped in keeping the cost of inputs in check.

• Favorable Exchange Rate

The strengthening of the rupee has resulted in lower the cost of inputs that are imported

• Response to Advertising

The company recorded its highest sales revenue in 2002 which it attributed to a 43% increase in advertising expenditure. The company gives credit to schemes such as the “Supreme Inami Khazana” and advertisement of songs such as “Supreme Ishq”

• Lower Tariffs

Lower raw material costs due to lower tariffs

• Lower Interest Rates

Lower interest rates have resulted in creation of a conducive environment for investment.

Industry Sales Trend .

Sales - Industry vs UniLever

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Sales(Industry) Sales(UniLever)

Market Share |

Operating, EBT & Net Margins . .

Income Statement .

DuPont Analysis . .

DUPONT Analysis

0%20%40%60%80%

100%120%140%160%180%200%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Net Margins ROE Leverage Asset Turnover

Cash Flow (I) |

Cash Flows (II) .

Valuation of Firm .

Risk Free Rate = 4%

Market Risk Premium = 5%

Required Return of Equity Holders = 9.25%

WACC = 6.6%

Assuming growth rate to be 2%,

Value of firm = Σ [FCFF/(1+WACC)] + [FCFF/(WACC-g)] / (1+WACC )

= Rs. 54,989.53 million

Value of Equity = Value of Firm – Value of Debt = 43,578.4

Fair Value of Stock = Value of Equity / No. of Outstanding shares = Rs. 2,178.88

Current Stock Price = Rs. 1,495

10

Rating |

• Valuation of Management (High)

• Earnings Momentum ( 2003 - 2004)