Equal · Financial Report

Unilever Indonesia

UNVR/FY2021–FY2025/Educational Analysis/IDR/Data source · 2026-06-19

ROE = tax × interest × margin × turnover × leverage

	FY2021	FY2022	FY2023	FY2024	FY2025
Tax burdendriver	0.77x	0.77x	0.78x	0.90x	1.71x
Interest burden	0.98x	0.99x	0.98x	0.98x	0.97x
Operating margin	19.4%	17.2%	16.3%	12.5%	14.4%
Asset turnover	2.07x	2.25x	2.32x	1.91x	1.60x
Leverage (equity mult.)	4.41x	4.58x	4.93x	7.47x	4.47x
= Return on Equity (consolidated)	133.3%	134.2%	142.0%	156.7%	170.7%
Return on Invested Capital (ROIC)	87.6%	113.6%	144.4%	99.3%	102.6%

Consolidated (pre-minority-interest) basis; the headline ROE in the ratio grid is owners’ basis.

Liquidity

	FY2021	FY2022	FY2023	FY2024	FY2025
Current Ratio(Current Assets / Current Liabilities)	0.61x	0.61x	0.55x	0.45x	0.74x
Quick Ratio((Current Assets − Inventory) / Current Liabilities)	0.42x	0.40x	0.34x	0.23x	0.57x
Cash Ratio(Cash / Current Liabilities)	0.03x	0.04x	0.09x	0.06x	0.40x
Working Capital(Current Assets − Current Liabilities)	-Rp 4.8 T	-Rp 4.9 T	-Rp 5.0 T	-Rp 6.5 T	-Rp 3.7 T

Leverage & Solvency

	FY2021	FY2022	FY2023	FY2024	FY2025
Debt to Equity (DER)(Total Debt / Total Equity)	0.63x	0.32x	0.22x	0.92x	0.14x
Liabilities to Equity(Total Liabilities / Total Equity)	3.41x	3.58x	3.93x	6.47x	3.47x
Debt to Assets(Total Debt / Total Assets)	0.14x	0.07x	0.05x	0.12x	0.03x
Net Debt(Total Debt − Cash)	Rp 2.4 T	Rp 781 M	-Rp 270 M	Rp 1.3 T	-Rp 5.1 T
Interest Coverage(EBIT / Interest Expense)	41.55x	83.09x	59.26x	52.77x	38.85x
Equity Multiplier (Assets ÷ Equity)	4.41x	4.58x	4.93x	7.47x	4.47x

Profitability

	FY2021	FY2022	FY2023	FY2024	FY2025
Gross Margin(Gross Profit / Revenue)	49.6%	46.3%	49.7%	47.5%	46.9%
Operating Margin(EBIT / Revenue)	19.4%	17.2%	16.3%	12.5%	14.4%
Net Margin(Net Income / Revenue)	14.6%	13.0%	12.4%	11.0%	23.9%
EBITDA(EBIT + D&A)	Rp 8.5 T	Rp 7.9 T	Rp 7.0 T	Rp 4.5 T	Rp 5.1 T
EBITDA Margin(EBITDA / Revenue)	21.5%	19.1%	18.2%	14.8%	15.8%
Return on Assets (ROA)(Net Income / Total Assets)	30.2%	29.3%	28.8%	21.0%	38.2%
Return on Equity (ROE)(Net Income (Owners) / Equity (Owners))	133.3%	134.2%	142.0%	156.7%	170.7%
Tax Burden (Net ÷ Pretax)	0.77x	0.77x	0.78x	0.90x	1.71x
Interest Burden (Pretax ÷ EBIT)	0.98x	0.99x	0.98x	0.98x	0.97x
Return on Invested Capital (ROIC)	87.6%	113.6%	144.4%	99.3%	102.6%

Operations & Efficiency

Turnover	FY2021	FY2022	FY2023	FY2024	FY2025
Asset Turnover(Revenue / Total Assets)	2.07x	2.25x	2.32x	1.91x	1.60x
Inventory Turnover(COGS / Inventory)	8.12x	8.44x	8.02x	6.41x	6.91x
Receivables Turnover(Revenue / Receivables)	8.76x	10.50x	16.48x	16.28x	19.04x
Payables Turnover(COGS / Payables)	4.36x	4.71x	4.78x	4.03x	3.61x

Conversion Period	FY2021	FY2022	FY2023	FY2024	FY2025
Days Inventory Outstanding (DIO)(365 × Inventory / COGS)	45.0 days	43.3 days	45.5 days	56.9 days	52.8 days
Days Sales Outstanding (DSO)(365 × Receivables / Revenue)	41.7 days	34.8 days	22.1 days	22.4 days	19.2 days
Days Payable Outstanding (DPO)(365 × Payables / COGS)	83.8 days	77.4 days	76.4 days	90.5 days	101.1 days
Cash Conversion Cycle (CCC)(DIO + DSO − DPO)	2.9 days	0.6 days	-8.7 days	-11.2 days	-29.1 days

Cash Flow

	FY2021	FY2022	FY2023	FY2024	FY2025
Free Cash Flow(Operating Cash Flow − Capex)	Rp 7.3 T	Rp 7.4 T	Rp 6.3 T	Rp 2.9 T	Rp 4.9 T

Valuation

price as-of 2026-07-31fundamentals: FY2025

Price Rp 1,755 · market cap Rp 67 T

Multiple	UNVR	Peer median	vs median
P/E	8.72x	8.72x	0%
P/B	14.90x	14.90x	0%
P/S	2.09x	2.09x	0%
EV/EBITDA	12.18x	12.18x	0%
EV/EBIT	13.41x	13.41x	0%
EV/Sales	1.93x	1.93x	0%
FCF Yield	7.40%	7.40%	0%
Dividend Yield	11.45%	11.45%	0%

Only 1 peers are covered here, so the median is itself one of the members. A 0% gap can simply mean UNVR sits at the median.

EV = mkt cap Rp 67 T + debt Rp 645 M − cash Rp 5.7 T = Rp 62 T

What the price implies

At today’s price, the market is paying for 7.7%/yr FCF growth (4.6% at 12.0% to 10.6% at 16.0% discount rates). Delivered over the last 4 years: -9.4% FCF · -5.2% revenue.

Reverse DCF: single-stage FCF, terminal growth 2.5%, discount band 12.0–16.0% (β=1; build cited in Methodology). Not a forecast.

Forward DCF (glass-box)

This model projects the operating cash the whole business generates, discounts it back at the blended cost of capital, and subtracts net debt. What remains is the equity value, stated per share. Every input below comes from the company's own audited record or from cited market data, and you can adjust each one yourself.

Base year contains named one-off item(s): FY2025: Ice-cream business divestment gain (Wall’s/Magnum separation) inflated net income. The EBIT basis screens out most non-operating items, but read the Earnings Quality section before trusting the base margin.

Assumption	Value	Basis
Rf (risk-free)	7.26%	Indonesia 10Y government bond, 8 Jul 2026
ERP (Rm − Rf)	6.69%	Damodaran Indonesia, Jul 2026 (Baa2, CRP 2.46%)
β	0.72 → 0.73	Household Products (unlevered) relevered at own D/E 0.01
Cost of equity	12.11%	Rf + β × ERP
Cost of debt	18.33%	FY2025 interest expense ÷ total debt
Tax rate	22.7%	median effective rate, FY2021–FY2025 (pretax ≈ EBIT − interest)
WACC	12.13%	99% E × CoE + 1% D × Kd × (1 − t)
Revenue growth (yr 1, fading)	-5.2%	delivered 4-yr revenue CAGR -5.2%, fading linearly to terminal
EBIT margin	14.4%	mean EBIT margin, last 3 FYs
D&A / revenue	1.9%	mean D&A/revenue, last 3 FYs
Capex / revenue	2.8%	mean capex/revenue, last 3 FYs, for the explicit years; in the terminal year capex falls to replacement level (equal to depreciation, 1.9% of revenue) because holding a build-phase or pause-phase ratio in perpetuity misprices the company in whichever direction that phase points
ΔNWC / Δrevenue	-14.6%	median ΔNWC/Δrevenue across the seeded years (NWC = AR + inventory − AP)
Terminal growth	2.5%	BI inflation-target midpoint (2.5% ± 1%)

Growth path

year 1 → fading to terminal over 5 yrs-5.2%

EBIT margin14.4%

WACC12.1%

Terminal growth2.5%

Explicit years5

Year	+1	+2	+3	+4	+5	T∞
Growth	-5.2%	-3.3%	-1.3%	0.6%	2.5%	2.5%
Revenue	Rp 30 T	Rp 29 T	Rp 29 T	Rp 29 T	Rp 30 T	Rp 31 T
EBIT	Rp 4.4 T	Rp 4.2 T	Rp 4.2 T	Rp 4.2 T	Rp 4.3 T	Rp 4.4 T
NOPAT	Rp 3.4 T	Rp 3.3 T	Rp 3.2 T	Rp 3.2 T	Rp 3.3 T	Rp 3.4 T
+ D&A	Rp 572 M	Rp 554 M	Rp 546 M	Rp 549 M	Rp 563 M	Rp 577 M
− Capex	Rp 844 M	Rp 817 M	Rp 806 M	Rp 810 M	Rp 831 M	Rp 577 M
− ΔNWC	Rp 242 M	Rp 144 M	Rp 58 M	-Rp 24 M	-Rp 106 M	-Rp 108 M
FCFF	Rp 2.8 T	Rp 2.8 T	Rp 2.9 T	Rp 3.0 T	Rp 3.1 T	Rp 3.5 T
PV	Rp 2.5 T	Rp 2.3 T	Rp 2.1 T	Rp 1.9 T	Rp 1.8 T	Rp 20 T

Check it yourself: revenue × margin = EBIT · NOPAT = EBIT × (1 − tax) · FCFF = NOPAT + D&A − Capex − ΔNWC · PV = FCFF ÷ (1+WACC)^yr · TV = FCFF(T∞) ÷ (WACC − g), discounted from year 5

EV = PV(explicit) Rp 11 T + PV(TV) Rp 20 T = Rp 31 T · TV 66% of EV · − net debt -Rp 5.1 T − minority Rp 0

Model output: Rp 950/share (-46% vs price Rp 1,755)· exit-multiple check (12.2x): Rp 1,286

Under these assumptions the model lands 46% below today's price. The market, in other words, is paying for faster growth, a fatter margin, or a lower discount rate than the inputs here assume.

Sensitivity (per share, Rp)

g \ WACC	11.1%	12.1%	13.1%
2.0%	996	909	837
2.5%	1,047	950	871
3.0%	1,103	995	907

Model output under the stated assumptions. Every input above comes from the company's own audited record or from cited market data, and every one can be adjusted. This is not a price target and not advice.

Educational analysis. Multiples pair today’s price with the latest audited fiscal year (trailing-FY convention); peer figures are the covered peer sample, not the whole market. Never a price target.

Macro backdropfull backdrop + sensitivity map →

BI Rate 5.75%IDR/USD 18,05810Y government bond yield 7.26%Inflation 3.34%(as-of 2026-07-31)

GDP/consumption ↑(H)Rupiah weaker(M)CPO ↑(M)

Income Statement

	FY2021	FY2022	FY2023	FY2024	FY2025
Revenue	Rp 40 T	Rp 41 T	Rp 39 T	Rp 31 T	Rp 32 T
Cost of Goods Sold	Rp 20 T	Rp 22 T	Rp 19 T	Rp 16 T	Rp 17 T
Gross Profit	Rp 20 T	Rp 19 T	Rp 19 T	Rp 15 T	Rp 15 T
Operating Income (EBIT)	Rp 7.7 T	Rp 7.1 T	Rp 6.3 T	Rp 3.8 T	Rp 4.6 T
Interest Expense	Rp 185 M	Rp 85 M	Rp 106 M	Rp 72 M	Rp 118 M
Net Income	Rp 5.8 T	Rp 5.4 T	Rp 4.8 T	Rp 3.4 T	Rp 7.6 T
Net Income Attributable to Owners	Rp 5.8 T	Rp 5.4 T	Rp 4.8 T	Rp 3.4 T	Rp 7.6 T
Depreciation & Amortization	Rp 835 M	Rp 811 M	Rp 736 M	Rp 708 M	Rp 464 M

Balance Sheet

	FY2021	FY2022	FY2023	FY2024	FY2025
Cash & Equivalents	Rp 325 M	Rp 503 M	Rp 1.0 T	Rp 671 M	Rp 5.7 T
Accounts Receivable	Rp 4.5 T	Rp 3.9 T	Rp 2.3 T	Rp 1.9 T	Rp 1.7 T
Inventory	Rp 2.5 T	Rp 2.6 T	Rp 2.4 T	Rp 2.5 T	Rp 2.5 T
Current Assets	Rp 7.6 T	Rp 7.6 T	Rp 6.2 T	Rp 5.3 T	Rp 11 T
Total Assets	Rp 19 T	Rp 18 T	Rp 17 T	Rp 16 T	Rp 20 T
Accounts Payable	Rp 4.6 T	Rp 4.7 T	Rp 4.1 T	Rp 4.0 T	Rp 4.7 T
Current Liabilities	Rp 12 T	Rp 12 T	Rp 11 T	Rp 12 T	Rp 14 T
Total Liabilities	Rp 15 T	Rp 14 T	Rp 13 T	Rp 14 T	Rp 16 T
Total Interest-Bearing Debt	Rp 2.7 T	Rp 1.3 T	Rp 751 M	Rp 2.0 T	Rp 645 M
Total Equity	Rp 4.3 T	Rp 4.0 T	Rp 3.4 T	Rp 2.1 T	Rp 4.5 T
Equity Attributable to Owners	Rp 4.3 T	Rp 4.0 T	Rp 3.4 T	Rp 2.1 T	Rp 4.5 T

Cash Flow Statement

	FY2021	FY2022	FY2023	FY2024	FY2025
Operating Cash Flow	Rp 7.9 T	Rp 8.1 T	Rp 7.1 T	Rp 4.0 T	Rp 5.8 T
Capital Expenditure	Rp 585 M	Rp 638 M	Rp 835 M	Rp 1.1 T	Rp 862 M

Company Deep Analysis

Reviewed: 2026-07-31

Analyst Verdict

UNVR gross margin held ~47–50 % (FY2021–2025: 49.6 % → 46.3 % → 49.7 % → 47.5 % → 46.9 %); structurally stable despite input cost inflation. Operating margin compressed from 19.4 % (2021) to 12.5 % (2024) on revenue decline (negative operating leverage off a fixed SG&A base) then partially recovered to 14.4 % (2025). Net margin FY2025 of 23.9 % significantly exceeds EBITDA margin of 15.8 %: implying material below-EBITDA gains (brand/asset disposals). ROE 133–171 % across FY2021–2025 and ROIC 88–144 % are structural, not cyclical: driven by negative net working capital (supplier payables fund UNVR's asset base). Current ratio 0.44–0.74 is NORMAL for this model; it does not indicate liquidity stress. FCF compressed from IDR 7.4 T (2022 peak) to IDR 2.9 T (2024) then partially recovered to IDR 4.9 T (2025).

Business Model

Brand-led FMCG; UNVR manufactures, markets, and distributes ~40 brands across Home & Personal Care (HPC: Sunsilk, Clear, Dove, Rexona, Vaseline, Lifebuoy, Rinso) and Foods & Refreshments (F&R: Bango soy sauce, Royco seasoning, Wall's ice cream, Lipton tea). 85 % owned by Unilever PLC. Revenue is fully domestic IDR-denominated; raw materials (palm oil derivatives, petrochemicals, packaging) are partially USD-linked. Distribution via GT (general trade, ~80 %) and MT (modern trade: Indomaret, Alfamart, Hypermart). Payables-funded working capital is the structural engine: UNVR collects from modern trade in <30 days while paying suppliers in 90–120 days; creating a negative WC position that funds the asset base and amplifies ROE/ROIC far above reported net margin.

Operating Model (Business Process)

01Rent the brands, import the playbook
Royalty-bearing use of Unilever global brands (Rinso, Lifebuoy, Sunsilk, Bango…) across home care, personal care and foods.
EconomicsGM held 46–50% all five years: brand pricing power is intact even as volume left.
02Distribute everywhere, produce asset-light
Nine factories + the deepest FMCG distribution reach in Indonesia; capex needs are tiny (Rp0.6–1.1tn/yr).
EconomicsThe asset-light model is why ROIC prints look absurd (88–144%): almost no invested capital remains under the franchise.
03Lose the volume war (the FY-record’s core fact)
Revenue FELL five consecutive prints: Rp39.5tn→Rp31.9tn (−19%); local challengers, downtrading and boycott waves took share the brands did not reclaim.
EconomicsOperating margin followed: 19.4%→12.5% (FY2024) before the FY2025 reset-and-divest year.
04Pay out everything, always
Equity ran Rp4.3tn→Rp2.1tn by FY2024: payout at or above 100% of earnings for years; the FY2025 disposal gain temporarily rebuilt it to Rp4.5tn.
EconomicsThe equity base is a residual, not a buffer: by design.

Cost structureCOGS ~50–53% (commodity inputs, palm-oil-linked), then heavy brand/media spend; the FY2024 margin trough (OM 12.5%) was volume deleverage on a fixed brand-support base, not input costs alone.

Cash cycleNegative working capital; distributors pay fast, suppliers wait: OCF (Rp4.0–8.1tn) historically covered the entire dividend. The FY2024–25 OCF fade (Rp4.0→5.8tn vs Rp7–8tn prior) tracks the volume loss one-for-one.

Segments

Two segments: (1) Home & Personal Care (HPC, ~55–60 % revenue); key brands: Sunsilk/Clear (shampoo), Dove (skin), Lifebuoy (soap/sanitiser), Rexona (deodorant), Vaseline (body lotion); Rinso/Molto (laundry) sold late 2024; highest competitive pressure from Wings (So Klin, Zinc, Emeron/Rejoice) which gained share via aggressive pricing + sachets; HPC 3Q25 revenue IDR 6.1 T (+14.6 % YoY); first meaningful recovery after multi-year share loss. (2) Foods & Refreshments (F&R, ~40–45 % revenue): Bango (kecap, #1 Indonesia brand with >50 % market share; sweet/thick profile difficult to replicate), Royco (seasoning), Wall's (ice cream), Lipton (RTD tea); F&R more defensible than HPC due to Bango's taste-preference brand lock-in; F&R margin slightly below HPC due to commodity (CPO, sugar, cocoa) input exposure.

Value Chain & Positioning

Raw material procurement (CPO from Kalimantan/Sumatra plantations, petrochemicals, packaging) → manufacturing (Cikarang plant, Surabaya plant, Bekasi) → central distribution → GT sub-distributors (>800 nationwide) + MT direct billing → end consumer. A&M spend (~18–22 % of revenue) is UNVR's primary reinvestment. SKU rationalisation (reducing from ~700 to ~500 SKUs post-2022) cuts tail cost but reduces GT range depth.

Competitive Forces (Porter’s 5)

Supplier powerLow

How much leverage input/funding providers have over pricing.

UNVR's parent (Unilever PLC) has global procurement scale for raw materials (palm oil, petrochemicals, packaging). CPO sourcing links to Indonesia's domestic supply (CPO price is a cost variable). Packaging (PET, aluminium, paperboard): commodity inputs with multiple suppliers. UNVR's scale in Indonesia makes it a volume buyer with negotiating leverage over local raw material suppliers.

Implication → Low supplier power = stable input cost structure. CPO price cycles (linked to global vegetable oil market) create some COGS variability: visible in GM range of 46–50 % across 2021–2025.

Buyer powerMedium

How much leverage customers have to push prices down.

Modern trade (Indomaret, Alfamart, Hypermart) exercises meaningful shelf-space and listing-fee leverage. Platform e-commerce (Shopee, Tokopedia) has increased price transparency: consumers can directly compare Sunsilk vs. Emeron vs. Rejoice (Wings) at sachets level. GT is more favourable: thousands of small warung/toko kelontong cannot negotiate individually. The shift toward MT and e-commerce structurally increases buyer power at the trade level.

Implication → MT/e-commerce shift squeezes UNVR's channel margin. Defensive lever: invest in premiumisation (higher-ASP SKUs) + Bango brand lock-in (kecap is a taste preference, harder to switch).

Threat of new entryHigh

How easily new competitors can enter the market.

The biggest structural change in Indonesia FMCG 2015–2025: Wings Group (So Klin, Zinc, Mie Sedaap), ABC Group (Dettol-adjacent), Kapal Api (coffee), Wardah/Paragon (halal beauty), and Maybelline/L'Oréal (mass beauty) captured share from UNVR in specific sub-categories. These are not new entrants, they were always present, but their investment in A&M and MT penetration intensified as UNVR's parent Unilever PLC globally cut A&M budgets. UNVR's peak Indonesia market share ~38.5 % (estimated) vs. trough ~27 % (Dec 2023) vs. partial recovery ~33 % (3Q25 est.) reflects this structural share loss.

Implication → UNVR's highest strategic risk is continued category-by-category share erosion to localised challengers. The portfolio disposals (Rinso/Molto) signal prioritising fewer, stronger brands over breadth.

Threat of substitutesMedium

Risk that alternative products/services replace demand.

Within FMCG categories, substitution is brand-to-brand within the same category (Wings' So Klin vs. Rinso; Wardah vs. Sunsilk). True category substitution (e.g., consumers stop using shampoo) is near-zero. Kecap (Bango) has low substitution: preference for sweet Javanese-style kecap is deeply cultural. Ice cream (Wall's) has higher substitution from artisanal/local brands. Personal care (Vaseline, Rexona) faces premium substitution from imported brands (Neutrogena, Nivea, AXE) in modern trade.

Implication → UNVR's defence lies in brand equity investment (A&M) and anchor-brand protection (Bango, Lifebuoy soap). Categories with high substitution (laundry, ice cream) are correctly de-prioritised or divested.

Competitive rivalryHigh

Intensity of competition among existing players.

P&G Indonesia competes directly in HPC (Pantene vs. Sunsilk, Ariel vs. Rinso, Gillette vs. Rexona). Wings Group is UNVR's most aggressive domestic rival: Rejoice/Emeron, So Klin, Nuvo, Boom sachet priced below UNVR. L'Oréal (Garnier, L'Oréal Paris) competes in skin care and hair. Unilever PLC peers (P&G, Colgate-Palmolive, Reckitt) all have Indonesia operations. Competitive intensity peaked 2020–2024 as local brands invested heavily in sachet pricing and GT distribution depth, directly targeting UNVR's rural/semi-urban mass market.

Implication → High rivalry = sustained A&M investment is non-optional. A&M reduction (as Unilever PLC pursued globally) directly translates to share loss in Indonesia: the 38 % → 27 % trajectory is the empirical proof.

Moat / Competitive Edge

Bango kecap is the strongest moat: deep consumer habit lock-in for Javanese sweet soy sauce, >50 % market share, and no credible challenger after decades. Lifebuoy soap has strong rural health-association equity. Distribution network (800+ sub-distributors, direct Indomaret/Alfamart relationship) creates last-mile access moats. Unilever PLC global R&D + formulation library is a product innovation moat. These are real but ERODING moats: Wings and P&G have built comparable distribution depth over 20 years, and digital direct-to-consumer channels further weaken UNVR's distributional advantage.

Key Drivers & Sensitivities

Indonesia Per-Capita Income & Consumption Upgrading
Indonesia private consumption ~57 % of GDP; FMCG growth tracks real income trajectory. Per-capita GDP USD 4,500–5,000 (2024) → USD 6,000+ target by 2030 = meaningful FMCG premiumisation potential. Each 1 % real income growth historically produces ~0.8–1.0 % FMCG volume growth. UNVR benefits from premiumisation (higher-ASP shampoo, skincare): offsetting volume share losses to Wings in mass-market sachets.
A&M Investment Level vs. Local Challengers
UNVR A&M spend as % revenue is the key competitive lever. When Unilever PLC cut global A&M budgets (2019–2023), UNVR Indonesia market share compressed from ~38 % to ~27 %. 3Q25 HPC revenue +14.6 % YoY suggests A&M reinvestment is recovering share. Each 1 pp change in A&M / revenue (historically ~18–22 %) has estimated ~0.3–0.5 pp market share impact over 3–6 quarter lag. Competitor Wings' A&M spend is private: directional inference from UNVR share data.
CPO & Raw Material Input Cost
UNVR's COGS is ~50–54 % of revenue (gross margin 46–50 %). Primary inputs: palm oil derivatives (CPO + RBD palm) ~25–30 % of COGS, petrochemical surfactants (~15 %), packaging (PET, aluminium, paperboard ~20 %). CPO spot price in Indonesia (CIF) is linked to global vegetable oil markets: a 10 % CPO price increase ≈ estimated IDR 300–400 B UNVR COGS increase pa. IDR/USD rate adds sensitivity on imported petrochemical inputs. UNVR partially hedges via forward contracts; Unilever PLC global procurement reduces unit cost vs. standalone. FY2025 GM recovery to ~48 % partly reflects CPO normalisation from 2022 commodity spike.

Earnings Quality

FY2025’s headline is NOT the run-rate: net margin doubled to 23.9% (NI Rp7.6tn on Rp31.9tn revenue) on the ice-cream business disposal; the cash line (OCF Rp5.8tn) shows the recurring engine. Strip the gain and the underlying story is a franchise stabilizing margins (OM back to 14.4%) on a smaller base.

Period	One-off item	Impact
FY2025	Ice-cream business divestment gain (Wall’s/Magnum separation) inflated net income	NM 11.0%→23.9% in one year while revenue rose just 4% and OCF rose Rp1.8tn: the gap between NI Rp7.6tn and OCF Rp5.8tn carries the gain. Use pre-FY2025 margins for the run-rate.

Cash conversionHistorically pristine (negative-WC model); FY2025 conversion drops below 1x purely from the non-cash disposal gain in NI.

Capital Allocation

Harvester: returns cash, limited reinvestment

The purest harvester in the dataset, and the cautionary version: a decade of ~100% payout left no retained cushion, so five years of franchise erosion flowed straight to the equity line (Rp4.3tn→Rp2.1tn). The ice-cream sale monetized a crown asset; what the FY2026 record must now show is whether the remaining portfolio can grow again, because the harvest model has nothing left to harvest if volume keeps leaving.

DeploymentFY2021→25: capex minimal (Rp0.6–1.1tn/yr), no acquisitions, dividends ≈ earnings every year, one divestment (ice cream, FY2025); capital OUT is the entire policy.

Returns trendROE 133%→171% is arithmetic on a vanishing denominator, not improvement: read the trend in OM (19.4%→12.5%→14.4%) and revenue (−19% over the window) instead. Returns on the FRANCHISE fell; returns on the residual equity rose. The distinction is the whole story.

Linkages

CPO price (via AALI, LSIP) affects COGS (palm oil derivatives). IDR/USD rate affects imported petrochemical packaging inputs. Private consumption index (BPS) is UNVR's demand barometer. Wings Group (private) is the primary competitive shadow: UNVR share trends are the best proxy for Wings' competitive momentum. Retail distribution health (Indomaret, Alfamart) affects UNVR's MT sell-through. BPJPH halal certification compliance (mandatory Oct 2024) is an administrative requirement UNVR is well-positioned to meet (products already halal-certified).

Recent Developments

FY2025 net margin of 23.92% sits far above operating margin of 14.38%, which means most of the improvement arrived below the operating line rather than from trading better. Read the operating line by itself and the picture changes: 19.42%, 17.18%, 16.26%, 12.45%, 14.38%, a fall of about five percentage points across four years with a partial recovery only in the last. ROE of 170.75% and ROIC of 102.61% are arithmetic on a deliberately thin equity base, not evidence of extraordinary returns, and the current ratio has been below 1.0 in every one of the five years, 0.614 down to 0.446 before recovering to 0.741. Free cash flow gives the plainer measure: Rp7,316.9bn in FY2021 against Rp4,935.2bn in FY2025, having bottomed at Rp2,887.3bn.

Regulation

BPJPH halal mandatory (Oct 2024): all consumer packaged goods must be halal-certified; UNVR products are pre-compliant. BPOM: food and cosmetic product safety registration (every SKU). SNI product standards for certain HPC categories. Kemenperin: domestic content encouragement (TKDN) does not directly apply to FMCG. KPPU (competition authority): monitors dominance in specific categories; Bango's >50 % kecap share is watched but not actioned. OJK: UNVR is publicly listed; standard IDX disclosure and capital market rules apply.

ESG & Sustainability

Palm oil: UNVR committed to 100 % deforestation-free supply chain (NDPE policy); third-party audited. Plastic packaging: UNVR is one of Indonesia's largest single-use plastic users (sachets are environmental liability); committed to 50 % recycled plastic content by 2025 (progress incomplete). Water usage at manufacturing plants (Cikarang, Surabaya). Women empowerment: UNVR gender equity in senior management. Unilever PLC Compass (Sustainable Living Plan) sets targets; Indonesia operations are a major contributor. GHG scope 1+2: reducing at manufacturing plants via energy efficiency.

Red-Flag Protocol

Five-year revenue declineelevated
Rp39.5tn→Rp31.9tn with share loss to local brands and boycott-wave demand shifts: the core franchise question, unresolved in the record.
FY2025 one-off dependenceelevated
The year’s headline profit is disposal-driven (named above): any screen or model reading FY2025 NI as run-rate overstates the franchise.
Ratio distortion from the residual equity basewatch
ROE/ROIC in triple digits are denominator artifacts of the full-payout model: flagged so they are never quoted as quality evidence.
Royalty/related-party structurenone found
Brand royalties flow to the parent by design; checked: disclosed, stable, and priced into the filed margins, not an accounting risk.

Risks

Continued market share erosion in HPC to Wings/P&G/local halal brands if A&M investment does not sustain 3Q25 recovery momentum
CPO price spike (linked to global vegetable oil cycle) compressing gross margin below 45 % and eroding FCF
Portfolio concentration post-divestiture: UNVR's remaining brand roster is narrower; Bango failure or Lifebuoy retreat would have outsized impact
Parent Unilever PLC strategic decisions (India/Indonesia priority allocation, further brand disposals or management fee increases) are outside UNVR's control
Regulatory risk: KPPU investigation into dominant market position in specific categories (Bango kecap >50 % share) could impose conduct remedies

Outlook & What to Watch

3Q25 top-line acceleration (+12.4 %) and HPC volume recovery (+14.6 %) are the most positive datapoints in 3 years. Post-divestiture UNVR is a leaner, higher-quality brand portfolio: if A&M investment is maintained, the path to 15–17 % OPM (vs. 2021's 19 % peak) is credible over 2–3 years. Key watch: whether 3Q25 recovery is sustainable or was aided by trade re-stocking. ROIC and ROE remain extraordinarily high structurally: FCF recovery toward IDR 6–7 T pa is the earnings normalisation thesis.

Key KPIs

Gross Margin (%): Target 47–50 %; compression below 45 % signals CPO/input cost shock
Operating Margin (%): 12.5 % (2024 trough) → target 15–17 % (normalised); tracks A&M + distribution efficiency
Revenue Growth YoY (%): Inflection from −6 % (H1 2024) to +12 % (3Q25): sustainability is the key question
FCF (IDR T): Peak IDR 7.4 T (2022); trough IDR 2.9 T (2024); recovery path to IDR 5–7 T
HPC Market Share (%, estimated): Proxy for competitive momentum; 38.5 % peak → 27 % trough → 33 % (3Q25 est.)

Sources

Curated narrative (educational interpretation), backed by the linked sources. The figures above are deterministic. Not investment advice.