Just five years ago, Unilever Nigeria Plc was posting losses and struggling under the weight of rising costs and tough economic conditions.
In 2020, it closed the year nearly N4 billion in the red.
Since then, it has staged a steady comeback, accumulating over N27 billion in profit.
By 2025, profit reached N30.7 billion, more than the total profit for the previous 5 years.
Importantly, it has done this while building up a cash reserve of over N110 billion, keeping debt minimal, and paying dividends along the way.
That cash isn’t just sitting in a vault; it’s working. In a year when many Nigerian companies are under pressure from high input costs and high interest expense, Unilever has been earning from its balance sheet.
It made over N10 billion in interest income from bank deposits in 2025 alone. In contrast, finance costs dropped to just N1.2 billion, as the company relied less on borrowing.
The effect of this is easy to see. Operating profit came in at N42.7 billion, and a margin of 19.87%.
This performance is backed by strong operational performance. Gross profit margins have improved, operating expenses are better managed, and the business continues to generate healthy cash flow
But it was finance income that pushed pre-tax profit to N51.8 billion, lifting the company’s pre-tax margin to 24%.
In other words, for every N4 in sales, N1 dropped straight to the bottom line, and a good part of that came not only from selling its food products, personal care, beauty and wellbeing products, but from simply managing its cash well.
Backed by real cash flow
In 2025 alone, Unilever recorded N47 billion in operating cash flow and was still left with over N42 billion in free cash flow after spending modestly on capital investments.
Investors are paying attention, as reflected in its market performance. In 2025, the share price gained 119%.
This year, it has gained over 6% year-to-date and currently trades at a valuation that looks expensive on the surface.
Too expensive? Maybe not
So, is the stock expensive? On paper, maybe. At face value, Unilever trades at around 14 times its earnings, higher than many of its peers. It could mean overvaluation or reflect expectations.
- Investors are likely betting that Unilever’s performance will continue, especially given its low debt, strong cash cushion, and ability to keep delivering returns without financial strain.
- Also, once you strip out the over N110 billion in cash, the picture starts to change.
- The company’s enterprise value, the true cost to own the business, is much lower than its market cap, sitting closer to N334 billion.
Based on that, its EV/EBITDA is under 8 times, a fairer reflection of what investors are really paying for.
Growth justifies the price tag
More importantly, Unilever has doubled its profits year-on-year, and over a five-year stretch has grown from a loss to over N30 billion in annual profit.
This gives the company a PEG ratio at just 0.11, suggesting the stock is undervalued when you account for how fast it’s growing.
If the kind of growth Unilever delivered in 2025, both in earnings and share price, continues, the company could earn over N12 per share in 2026, and the stock price could climb towards N160 or more.
Even then, the valuation would still look reasonable by most standards.
Bottomline
Unilever may look rich; it is earning more from its cash than it’s paying interest, growing profits without debt, and rewarding investors along the way.
- Sometimes, what looks expensive is just priced for performance, and Unilever Nigeria, at least for now, seems to be delivering exactly that.
- In simple terms: the stock may look pricey at first glance, but when you factor in growth, cash, and earnings quality, it might be a bargain in disguise.
