Unilever Sales Growth Fueled by Strong Volume and Margin Expansion
Unilever reports an increase in underlying sales by 4.2 percent, powered by volume growth of 2.9 percent. Turnover hit €60.8 billion, an increase of 1.9 percent. Along with other Power Brands, the company’s leading brands continued to perform well, growing by 5.3 percent in Power Brands and volume growing by 3.8 percent.
Unilever sales growth continued to remain strong across categories. Beauty & Wellbeing grew by 6.5 percent in sales, with volume growing at 5.1 percent. Personal Care grew by 5.2 percent in sales with volume growing by 3.1 percent. Home Care sales grew by 2.9 percent with volume growth of 4.0 percent. The Foods division grew in sales by 2.6 percent but saw volume growth of only 0.2 percent. Ice Cream sales grew 3.7 percent with volume growth of 1.6 percent. The outstanding performance was supported by powerful strategic investments in product innovation, pricing, and operational efficiencies.
The expansion of Unilevers’ marketing efforts that reached 15.5% of turnover led to an increase in brand and marketing investment spending, consequently gross margin expanded by 280 basis points. The improvement of underlying operating margin by 170 basis points to 18.4% was attributed to cost control, better supply chain management, and a strong demand for premium goods. Increased consumer trust and loyalty due to sustainable packaging and ethical sourcing also contributed towards the company’s branding.
An improvement of operating margins in the second half of the year is expected, supporting the forecasted underlying sales growth from 3-5% by 2025. The demerger set to be completed by the end of 2025 will enable Unilever sharpen its focus on core businesss and unlock shareholder value. Experts believe that the plans to list its ice cream brands, including Magnum and Ben & Jerry’s, in Amsterdam will help streamline the company’s approach.
Reiterating the company’s long term goals, CEO Hein Schumacher detailed strategic spending for innovation and investment as priorities. The intention to enhance customer engagement and data driven decision marking deepens the current digital transformation efforts. Unilever stands undeterred due to prevailing macroeconomic headwinds and continuously evolving consumer behaviour.
