Unilever, the maker of Marmite, Magnums and Ben & Jerry’s ice cream, has reported a boost in sales growth amid “challenging macroeconomic conditions”.
The consumer goods company, which has UK sites in London, Surrey and Gloucestershire, and a research hub in its historic Wirral home at Port Sunlight, said on Thursday (October 27) underlying sales had accelerated 10.6% in the third quarter. Turnover also rose 17.8% to €15.8bn (£13.7bn), including a currency impact of 8.8% and 2.1% from disposals of acquisitions.
The business said its billion+ Euro brands, accounting for more than 50% of group turnover, grew 14%, led by strong performances from OMO, Hellmann’s, Rexona, Magnum and Lux.
Over the period, Unilever said it had continued portfolio “reshaping”, completing the sale of its global tea business and acquiring Nutrafol, a provider of hair wellness products. It also confirmed its second €750m share buyback tranche, announced in September, would complete in December.
“Our organisation is now better structured to deliver consistent growth through a simpler, more category-focused operating model," said Unilever chief executive Alan Jope, who is stepping down next year after four years in the role.
“The full benefits will be realised over time, and we are seeing encouraging early signs of improved accountability and faster decision-making. The global macroeconomic outlook remains mixed, and we expect the challenges of high inflation to persist in 2023. The delivery of consistent growth remains our first priority.”
Unilever said it expected underlying sales growth for the full year to be above 8%, with more negative underlying volume growth than in the first nine months. Cost pressures are likely to be carried forward into 2023, the company said, driven by currency devaluation, higher raw material costs and higher supplier processing costs from energy and labour inflation.
Underlying operating margin for the full year is expected to remain at 16%, with improvement in 2023 and 2024, through pricing, mix and savings, Unilever added. The company’s quarterly interim dividend is maintained at €0.4268.
Charlie Huggins, head of equities at Bristol-based Wealth Club, said the "solid" third quarter was "too little, too late" for Mr Jope.
"The recent news that he is being relieved of his duties comes on the back of several years of disappointing performance," he said. "The next leader of Unilever faces a monumental task."
He added: "Underneath it all, Unilever remains a good business. It owns some strong brands which tend to hold up well in tough times, generating healthy margins. And it has excellent positions in emerging markets.
"But Unilever needs cultural change, and probably more disposals, for that value to be unlocked. Shareholders will be hoping the new CEO can be the catalyst to make that happen.”
READ NEXT
- Plymouth luxury yacht firm sails past ‘pingdemic’ to narrow losses
- ProCook reports trading momentum after 'challenging' summer
- Cheltenham solar energy company secures £4m to boost growth
- Former Gloucestershire Co-op site bought for retirement scheme
- Gloucester Rugby appoints new director to continue club's growth
Like this story? Why not sign up to get the latest South West business news straight to your inbox.
