Unilever, the Anglo-Dutch retailer known for popular brands such as Ben & Jerry's ice cream and Dove soap, announced that its sales volumes have increased for the first time in two years. This positive trend is attributed to the company's new turnaround plans, which are propelling it to the top of the FSTE 100 blue-chip index.
In 2023, Unilever's underlying sales growth, excluding exceptional and one-off items, accelerated to 7.0%. This growth was supported by a modest increase in volumes, up 0.2% for the year and 1.8% in the fourth quarter. Price growth also played a significant role, reaching 6.8%.
Analysts had predicted a 7.1% growth for 2023 solely driven by pricing, with volumes expected to remain unchanged. However, Unilever surpassed these expectations, demonstrating its ability to generate growth in both areas.
Shares of Unilever rose by 3% to 4,018.5 pence at 0937 GMT. Although the stock experienced a decline of 2% over the past twelve months, the recent positive sales growth indicates a promising outlook for the company.
High inflation prompted Unilever to increase prices, resulting in a challenging period where consumers sought more affordable alternatives. However, these latest results mark the first time since 2022 that Unilever has observed volume growth.
Notably, Unilever's underlying price growth decelerated from 10.7% in the first quarter to 2.8% in the fourth quarter. This change reflects lower inflation levels and showcases the company's adaptability in adjusting to market conditions.
Thanks to its 'Power Brands' turnaround plans, implemented by new Chief Executive Hein Schumacher, Unilever has experienced a margin improvement of 60 basis points, reaching 16.7%. The company is focusing on its 30 main brands, which contribute to 75% of its turnover. Investing in these brands allows Unilever to drive scale and enhance its competitiveness, ultimately rebuilding its margins.
During the results presentation, Schumacher emphasized the group's commitment to premiumization strategies. These efforts aim to enhance the appeal of Unilever's brands, leading to higher price points. Notably, the company has achieved double-digit growth in deodorant sales and continues to generate increases in incremental turnover.
Unilever's recent sales growth and margin improvement testify to the effectiveness of its turnaround plans. As the company sustains these positive trends, it reinforces its position as a leader in the consumer goods industry.
Unilever Reports Financial Performance Recovery
Unilever, a leading multinational consumer goods company, has recently announced its financial results which indicate a significant improvement in performance. Despite some areas of concern, the company's overall outlook appears optimistic.
Promising Growth and Rebuilding Margins
Unilever CEO, Hein Schumacher, expressed satisfaction with the latest results, highlighting a return to volume growth and the ongoing rebuilding of margins. However, he also acknowledged that there is room for improvement in terms of competitiveness. The company is committed to addressing this issue by enhancing execution strategies to unlock its full potential.
Positive Outlook for 2024
Unilever forecasts underlying sales growth of 3% to 5% for the year 2024. This projection anticipates a more balanced contribution from both volume and price factors. Additionally, the company expects a modest improvement in underlying operating margin for the full year. This improvement will be driven by gross margin expansion, resulting from increased productivity and a normalization of net material inflation levels.
Financial Results Highlights
- Net profit for the year 2023 decreased to €6.49 billion ($6.99 billion) compared to €7.64 billion in 2022. However, this still exceeded the consensus estimate of €6.23 billion among 11 analysts surveyed by FactSet.
- Turnover decreased from €60.07 billion in the prior year to €59.6 billion, primarily due to currency headwinds and net disposals. This figure was slightly lower than the expected €60.04 billion, as compiled by the company.
- In the fourth quarter, turnover declined by 3% to €14.2 billion, falling just short of the consensus estimate of €14.28 billion.
Strong Underlying Operating Profit
Unilever's underlying operating profit, a key metric that excludes exceptional and one-off items, amounted to €9.9 billion for the full year. This exceeded both the previous year's figure of €9.68 billion and the consensus estimate of €9.88 billion.
With an aim to generate value for shareholders, Unilever has announced a share buyback program worth €1.5 billion for 2024. The program is expected to commence in the second quarter. Additionally, the company has declared a fourth-quarter dividend of €0.4268, maintaining it at the same level as the previous year.
For more details on Unilever's financial performance, please contact the company directly.
Our Latest News
Analysts predict Johnson & Johnson's Q3 earnings and revenue, while evaluating stock movement and potential challenges. Stay informed on the company's financial...
Senate Democrats announce plans to subpoena Republican megadonor Harlan Crow and conservative activist Leonard Leo for details on their involvement in organizin...
Lucid Group reveals Q3 delivery and production numbers, causing disappointment among investors. Stock takes a hit while upcoming results are awaited.