Unilever Indonesia’s Financial Recovery Relies on Divestment Cash, Study Finds
A new study by Indah Lestari Anwar of Universitas Negeri Makassar, published in 2026 in the International Journal of Global Sustainable Research (IJGSR), reveals that the recent improvement in the financial performance of PT Unilever Indonesia Tbk (UNVR) was driven primarily by proceeds from a major business divestment rather than sustained operational growth. The findings provide important insight into how one of Indonesia’s largest consumer goods companies navigated multiple economic pressures between 2021 and 2025 and why its long-term financial stability remains a key concern for investors and corporate decision-makers.
The research comes at a critical time for Indonesia’s fast-moving consumer goods (FMCG) sector, which has faced significant challenges in recent years. Companies have had to adapt to post-pandemic consumer behavior, rising raw material costs, increasing competition from local brands, and geopolitical developments that have affected purchasing patterns. For PT Unilever Indonesia Tbk, these challenges were compounded by declining sales and a major strategic decision to divest its ice cream business in late 2024.
Why Unilever Indonesia’s Financial Health Matters
PT Unilever Indonesia Tbk has operated in Indonesia for more than nine decades and manages dozens of household brands across personal care, home care, beauty, and food categories. As one of the country's largest publicly listed consumer goods companies, its financial performance is often viewed as an indicator of broader trends in the FMCG industry.
Between 2021 and 2025, the company experienced a period marked by economic disruption and strategic transformation. According to the study, lingering effects of the COVID-19 pandemic, inflation in global commodity markets, consumer migration toward lower-priced alternatives, and geopolitical boycott campaigns all contributed to mounting pressure on the company's revenue and profitability.
Adding to these challenges was the sale of Unilever Indonesia’s ice cream business in November 2024. The transaction generated approximately IDR 7 trillion in cash and significantly altered the company’s financial structure heading into 2025.
How the Research Was Conducted
The study examined PT Unilever Indonesia Tbk’s audited annual financial statements and annual reports from 2021 through 2025.
Using a financial ratio analysis approach, the research evaluated four key dimensions of corporate performance:
- Liquidity
- Solvency
- Profitability
- Asset utilization efficiency
Rather than focusing on complex financial models, the analysis compared trends in the company’s financial ratios over a five-year period. Special attention was given to 2025 because the company’s financial statements reflected the impact of the ice cream business divestment and related accounting adjustments.
Four Years of Decline Followed by a Partial Recovery
One of the study’s most important findings is that Unilever Indonesia experienced two distinct phases during the period under review.
Phase One: Financial Deterioration (2021–2024)
The research found a consistent decline across most financial indicators between 2021 and 2024.
Key developments included:
- Total assets fell from IDR 19.1 trillion in 2021 to IDR 16.0 trillion in 2024.
- Equity declined sharply from IDR 4.3 trillion to IDR 2.1 trillion.
- Current Ratio dropped from 61.4% to 44.6%.
- Quick Ratio decreased from 41.9% to 23.3%.
- Debt-to-Equity Ratio surged from 341.3% to 646.6%.
- Net Profit Margin fell from 14.6% to 9.6%.
The study attributes this deterioration to a combination of external pressures and internal financial policies, including dividend distributions that substantially reduced the company’s equity base.
Phase Two: Partial Recovery (2025)
Financial conditions improved noticeably in 2025 after the divestment transaction.
The study reported:
- Total assets increased to IDR 20.0 trillion.
- Current assets nearly doubled to IDR 10.5 trillion.
- Equity recovered to IDR 4.5 trillion.
- Current Ratio improved to 74.1%.
- Debt-to-Equity Ratio fell to 347.3%.
- Net Profit Margin recovered to 11.1%.
However, the research emphasizes that these improvements largely resulted from the one-time cash inflow generated by the sale of the ice cream business rather than stronger operational performance.
Profitability Remained Relatively Resilient
Despite significant business pressures, Unilever Indonesia maintained relatively strong gross profitability throughout the five-year period.
Gross Profit Margin remained between 46% and 50%, consistently exceeding common FMCG industry benchmarks.
The study also found that operating efficiency initiatives introduced in 2024 began producing measurable results in 2025. Marketing expenses and administrative costs declined, helping improve net profitability.
Nevertheless, long-term profitability indicators showed signs of weakening. Return on Assets declined from 30.2% in 2021 to 17.7% in 2025, reflecting slower profit growth relative to the company's expanding asset base.
Asset Efficiency Became a New Challenge
A notable finding involved the company’s Total Asset Turnover ratio, which measures how effectively assets generate revenue.
For the first time during the study period, the ratio fell below industry expectations, dropping from 1.91 times in 2024 to 1.60 times in 2025.
According to the research, this decline does not necessarily indicate poor operational management. Instead, it reflects the transitional effects of restructuring. The large amount of cash received from the divestment increased total assets substantially, while those funds had not yet been fully invested in revenue-generating activities.
What the Findings Mean for Investors and Business Leaders
The study suggests that investors should be cautious when interpreting Unilever Indonesia’s 2025 financial recovery.
While key ratios improved, the underlying drivers were primarily non-recurring. Sustainable improvement will depend on how effectively management deploys divestment proceeds, strengthens working capital, and balances shareholder returns with long-term financial resilience.
The findings also offer broader lessons for companies undergoing major restructuring. Large asset sales can temporarily strengthen financial ratios, but enduring recovery requires operational improvements capable of generating consistent earnings growth.
As Indah Lestari Anwar of Universitas Negeri Makassar explains, the improvement in liquidity and solvency indicators observed in 2025 should be viewed in the context of the divestment transaction. The study concludes that future financial stability will depend largely on management’s ability to utilize divestment funds productively and avoid profit distributions that exceed the company’s operational earning capacity.
Author Profile
Indah Lestari Anwar, S.E., M.M. is a researcher and academic affiliated with Universitas Negeri Makassar, Indonesia. Her research focuses on corporate finance, financial performance analysis, financial statement interpretation, and business sustainability in publicly listed companies, particularly within Indonesia’s consumer goods sector.
Source
Article Title: Dynamics of Financial Performance of PT Unilever Indonesia Tbk
Author: Indah Lestari Anwar
University Affiliation: Universitas Negeri Makassar, Indonesia
Journal: International Journal of Global Sustainable Research (IJGSR)
Year: 2026
Volume/Issue: Vol. 4, No. 5, pp. 501–512
0 Komentar