Flash Focus: Unilever Indonesia (UNVR IJ/Not rated) - 9M26 Results and Earnings Call KTA

UNVR’s 3Q26 continuing operations net profit rose 11.1% YoY to IDR1.2tr, ahead of consensus, on stronger-than-expected sales with volume up 6.4%. Revenue grew 7.4% YoY and 4.7% QoQ to IDR8.9tr, driven by broad-based growth across HPC and F&R. For 9M26, revenue and continuing operations net profit grew 7.2% and 10.6% YoY, respectively.

EBIT fell 4.4% YoY to IDR1.4tr as transformation costs and Middle East-related commodity inflation kept gross margin under pressure. Higher outer logistics costs added to the pressure, partly offset by A&P spending.

Domestic sales have grown since 3Q25. UNVR has regained traction in 48% of its core mass-market business, versus c.70% in premium. By channel, GT posted single-digit growth and MT grew at a mid-single-digit pace, while e-commerce and health & beauty remained the fastest-growing channels.

Management is prioritising volume-led growth and market share over near-term margin recovery, and will restore margins gradually through pricing and cost efficiencies. Following two c.5% price increases in Jun-26 and Aug-26, further selective pricing is expected in 4Q26F–FY27F.

UNVR is trading at 11.8x FY26F P/E, close to -1.5SD below its historical mean. We view the recovery as encouraging, but a sustained re-rating needs clearer evidence of gross margin recovery, which we think is more likely in FY27. The key catalyst is UNVR’s ability to keep raising prices without hurting mass-market volumes. Downside risks include weaker volume after price increases and prolonged commodity inflation.