UK – Multinational consumer goods giant Unilever has delivered yet another impressive growth with annual turnover jumping 14.5% to €60.1 billion (US$64.78 Billion) in what would become the last financial results to be delivered by Alan Jope as CEO.

Material inflation, and increased production and logistics costs however heavily impacted profits and price action and savings delivery could only do very little to shore up profits.

As a result, the company only managed to record profits of €9.7 billion (US$10.45 billion), a paltry 0.5% rise when compared to the same period last year.

“Unilever delivered a year of strong topline growth in challenging macroeconomic conditions. Growth was broad-based across each of our five Business Groups, led by strong performances from our billion+ Euro brands.”

These billion+ Euro brands, accounting for 53% of Group turnover, delivered underlying sales growth of 10.9%, led by strong performances from OMO, Hellmann’s, Rexona, Sunsilk and Magnum, according to the financial release.;

Homecare delivers highest growth

Category wise, Homecare delivered the highest price growth and some volume decline, leading to underlying sales growth of 11.8%.

Ice Cream, which includes brands such as Magnum, Cornetto and Carte d’Or, improved underlying sales by 9.0%, with strong volume growth in out-of-home channels, benefiting from a good summer season, but not quite compensating for lower in-home volumes.

The nutrition segment which accounts for 23% of Unilever’s turnover reported sales growth of 8.6%, with 10.9% from price and (2.1)% from volume.

Beauty & Wellbeing and Personal Care which combined account for 43% of the group’s total turnover reported sales growth of 7.9 and 7.8% respectively.

Emerging markets grew underlying sales by 11.2% mostly driven by price action which grew by 13.5% while volumes were down 2.0%.

Developed markets remained resilient despite Unilever’s price increases resulting in volume growth of 2.3% and an overall revenue growth of 5.9% largely boosted by price.

Price action impacts volumes

With inflation impacting cost of production Unilever has enacted price action in each of the past eight quarters, reaching 13.3% in the fourth quarter of 2022 and taking the full year underlying price growth to 11.3%.

This had, as expected, some negative impact on volumes, which declined 2.1% in the 2022 financial year. Unilever expects the volume declines to continue into first half of 2023 as underlying price growth remain high.

A cautious 2023 forecast

For the full year, the company anticipates delivering strong underlying sales growth in 2023, with improving volume performance and competitiveness as the year progresses.

“We expect 2023 underlying sales growth to be at least in the upper half of our multi-year range of 3 – 5%,” Unilever said.

Jope in his statement noted that the company had made further progress in its  transformation journey adding that the new operating model is already unlocking a culture of bolder and more rapid decision-making with improved accountability.

“There is more to do, but the changes we have made mean that we start 2023 with momentum, setting us up well for delivering another year of higher growth, which remains our first priority,” he concluded.

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