Unilever Sales Remain Resilient Despite Price Increases Weighing on Demand

  • Unilever reported sales growth of 9%.
  • Volumes decline 2.1% as inflation weighed on consumer demand
  • Reported underlying operating profit up 0.5% to €9.7 billion

Unilever reported its full year results on Thursday, which saw strong growth in sales but a fall in margins driven by input cost inflation.

The consumer goods giant reported underlying sales growth of 9%, which the company stated was driven by all business groups and price growth of 11.3%. Consequently volumes declines 2.1% as the cost-of-living continues to weigh on consumer demand.

The group’s underlying operating profit improved by 0.5% to €9.7 billion, although its underly operating margin fell 230bps due to cost inflation. Additionally, earnings per share decreased 2.1% for the firm.

Unilever anticipates cost inflation to continue in 2023 and expects net material inflation in the first half to be around €1.5bn. The firm still expects to deliver strong sales growth and anticipates improved volume performance after a year of weaker volume results due to soaring inflation, causing consumers to switch to cheaper goods.

Unilever expects price growth to remain high and volume growth to be negative. The group states it is too early to suggest volume will turn positive in the second half and will be reliant on price growth softening.

As a result, sales growth is expected t be at least in the upper range of its multi year range of 3% to 5%.

“Unilever delivered a year of strong topline growth in challenging macroeconomic conditions,” stated CEO Alan Jope.

Jope continued, “growth was broad-based across each of our five Business Groups, led by strong performances from our billion+ Euro brands. Despite sharp rises in material costs, we have prioritised stepping up our brand and marketing investment.”

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