Unilever returns to volume growth; Unveils £1.75bn buyback
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(Sharecast News) - Consumer goods giant Unilever (ULVR) announced a €1.5bn share buyback as it reported a return to volume growth in the final quarter of 2023 and said it expected a "modest improvement" in operating margin this year.
Fourth-quarter underlying sales rose by around 5%, in line with forecasts, while underlying price growth was 2.8%, and underlying volumes increased by a better-than-expected 1.8%, the first improvement since early since the second quarter of 2021.
Annual pre-tax profit at the maker of Dove soap and Cornetto ice-cream fell to €9.3bn last year from €10.3bn. Turnover came in at €9.7bn from €10.75bn as consumers tightened their belts amid surging inflation and stagnant wage growth.
"We expect underlying sales growth for 2024 to be within our multi-year range of 3% to 5%, with more balance between volume and price," the company said on Thursday.
Chief executive Hein Schumacher said despite margins rebuilding "our competitiveness remains disappointing and overall performance needs to improve".
Schumacher in October started a turnround plan for the company by initially focusing on its 30 biggest product lines - dubbed power brands - which represent around 70% of group turnover.
"We anticipate a modest improvement in underlying operating margin for the full year. We will deliver this through gross margin expansion, driven by a step-up in productivity and net material inflation back to more normal levels."
Underlying price growth decelerated from 10.7% in the first quarter to 2.8% by the final three months 0f 2023, reflecting lower net material inflation in the second half. Nutrition and Ice Cream faced the highest input cost inflation in 2023 which translated into higher pricing.
Reporting by Frank Prenesti for Sharecast.com
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