Quarterly sales meet expectations at Unilever

26th Oct 2023 07:01

(Sharecast News) - Unilever laid out plans to boost growth on Thursday, as it posted a dip in third-quarter revenues.

The consumer goods giant, the owner of Dove, Marmite, Persil and Hellmann's, among many others, said sales fell 3.8% in the third quarter to €15.2bn, dragged lower by foreign exchange headwinds and a weaker performance in nutrition and ice cream.

Underlying volumes eased 0.6%.

Underlying sales improved 5.2%, however, in line with estimates, while price growth was 5.8%. Unilever noted that prices were continuing to moderate as inflation eased.

The results were the first under new chief executive Hein Schumacher, who joined from Dutch dairy co-operative FrieslandCampina in the summer.

Schumacher said that Unilever had "strong" fundamentals and a portfolio of "great" brands.

But he acknowledged that despite this, "our performance in recent years has not matched out potential. The quality of our growth, productivity and returns have all under-delivered".

Unilever will therefore now prioritise faster growth, by initially focusing on its 30 biggest brands - dubbed power brands - which represent around 70% of group turnover. It will also look to improve gross margin, "shifting from gross savings to net productivity", and introduce a new reward framework.

Schumacher said: "We will drive faster growth by stepping up innovation and investment behind our power brands; we will drive simplicity and productivity, leveraging the full strength of our operating model; and we will sharpen our performance culture through strong leadership and stretching goals."

Unilever reiterated its full-year target for underlying sales growth of more than 5% and a "modest" improvement in underlying operating margin.

Longer-term, it is targeting underlying sales growth of between 3% and 5%, "modest" margin expansion, earnings per share growth and an "attractive" dividend.

The London-listed firm also on Thursday named Fernando Fernandez chief financial officer. Currently president of the company's beauty and wellbeing business group, he will replace Graeme Pitkethly, who is retiring, on 1 January.