Unilever full year sales hit 9-year record as company redirects focus to high growth spaces

UK – UK-based multinational consumer goods company Unilever has recorded its fastest underlying sales growth in nine years for 2021 driven by double-digit sales growth in its priority markets of China, India, and US.  

The owner of Ben & Jerry’s ice-cream brand reported a turnover of €13.1 billion (US$17.73 bn) in Q4, a substantial increase of 8.4% on the previous year.  

Full-year turnover for the British multinational stood at €52.4 billion (US$70.90bn), up 3.4% compared to 2020, while underlying sales grew 4.5%. 

The company’s priority markets of China, India, and the US delivered double-digit growths of 14.3%, 13.4%, and 3.7%, respectively. 

Focus on high-growth spaces 

Unilever says that it has continued to re-shape its portfolio into “high-growth spaces, acquiring in prestige beauty and functional nutrition” and agreeing on the sale of its tea business. 

Ekaterra, the company’s tea business was sold to CVC Capital partners for €4.5 billion (US$5.1 billion) on a cash-free, debt-free basis. 

Last month, the company announced major changes to its organization in order to make it simpler and more category-focused.  

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The five business groups it announced will each be responsible and accountable for their strategy, growth, and profit delivery, and for running their businesses in all geographies. 

Unilever CEO Alan Jope calls this a pivot toward a “simpler, more category-focused organization designed to further improve performance.” 

The new organization is expected to generate around €600 million (US$686.5 million) of cost savings over two years. It is anticipated to be fully operational from the middle of the year. 

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Appetite for major acquisition fades 

After a failed attempt to acquire pharmaceutical and healthcare company GlaxoSmithKline, Unilever has been trying to strategize and figure out its next steps.  

The reorganization which followed the failed GSK acquisition is feared to be paving way for a potential of Unilever’s global food brands, as the company narrows its focus on its ice cream segment and personal care business. 

“We have engaged extensively with our shareholders in recent weeks and received a strong message that the evolution of our portfolio needs to be measured,” Jope said. 

“We, therefore, do not intend to pursue major acquisitions in the foreseeable future and will conduct a share buyback program of up to €3 billion (US$3.4 billion) over the next two years.” 

On the impressive 2021, CEO Jope said: “The major challenge of 2021 has been the dramatic rise of input costs.   

We responded with pricing actions, delivering underlying price growth of 2.9% for the year, accelerating to 4.9% in the fourth quarter, with full year underlying operating margin down 10bps and underlying earnings per share up 5.5%.” 

Jope notes that in 2022, Unilever plans to manage a significant input cost inflation cycle and will continue to invest competitively in marketing, R&D, and capital expenditure. 

Looking to the future, Jope said: “We expect underlying sales growth in 2022 to be in the range of 4.5% to 6.5%. Pricing will continue to be strong, with some impact on volume as a result”.  

The company expects further high input cost inflation in the first half of 2022 of over €2 billion. 

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