Higher prices help boost sales at Unilever
By Abigail Townsend
Date: Thursday 09 Feb 2023
(Sharecast News) - Unilever reported better-than-expected sales growth on Thursday, boosted by higher prices.
The blue chip maker of Dove soap, Persil detergent, Ben & Jerry's ice cream and Hellmann's mayonnaise said underlying fourth-quarter sales growth was 9.2%, ahead of company guidance for 8.2%.
Annual sales growth was also head of expectations at 9.0% after prices rose by 11.3%, contributing to volumes easing 2.1%. The company had previously guided for annual underlying sales of above 8%.
Full-year group turnover rose 14.5% to €60.1bn, boosted in part by favourable currency effects. Underlying operating profit nudged 0.5% higher to €9.7bn, after input cost inflation depressed the margin by 230 basis points.
Pre-tax profits rose 17.9% on a constant currency basis to €10.3bn.
Outgoing chief executive Alan Jope said: "Unilever delivered a year of strong top line growth in challenging macroeconomic conditions. Underlying sales growth was...driven by disciplined pricing action in response to high input cost inflation.
"We have made further progress in the transformation of Unilever and continued to deliver against our strategic priorities."
Looking to the current year, Unilever said it expected to "again deliver strong underlying sales growth, with improving volume performance and competitiveness as the year progress".
Cost inflation was expected to continue throughout the year, however, with Unilever forecasting net material inflation in the first half of around €1.5bn.
It continued: "In the first half, underlying price growth will remain high and volume growth will be negative. Volume will improve as price growth softens, but it is too early to say whether volume will turn positive in the second half."
Jope will step down in the summer after four and a half years at the helm. He is being replaced by Hein Schumacher, who joins from FrieslandCampina, a Dutch dairy co-operative.
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