Unilever Reports Strong Q1 2024 Results with 4.4% Underlying Sales Growth

Unilever Reports Strong Q1 2024 Results with 4.4% Underlying Sales Growth

(IN BRIEF) Unilever has announced its first-quarter results for 2024, revealing a 4.4% increase in underlying sales growth, driven by a 2.2% rise in volume. All five business groups reported growth, led by Beauty & Wellbeing. Turnover reached €15.0 billion, with the Power Brands exhibiting a 6.1% increase in underlying sales growth. The company reaffirmed its 2024 outlook, expecting underlying sales growth of 3% to 5% and a modest improvement in underlying operating margin. Unilever’s CEO, Hein Schumacher, expressed confidence in the company’s growth trajectory, emphasizing the implementation of the Growth Action Plan to drive higher-quality growth and streamline operations. The report highlights strong performances in emerging markets and strategic priorities across key product categories, including Personal Care, Home Care, Nutrition, and Ice Cream, despite challenges in certain regions. Additionally, Unilever outlined its capital allocation strategy, including a share buyback program and maintaining dividends.

(PRESS RELEASE) LONDON, 26-Apr-2024 — /EuropaWire/ —

We announced our results for the first quarter of 2024

• Underlying sales growth of 4.4%, with volume growth increasing to 2.2%
• All five Business Groups reporting underlying sales growth, led by Beauty & Wellbeing
• Turnover increased 1.4% to €15.0 billion with -2.0% impact from currency and -0.9% from net disposals
• Power Brands (75% of turnover) leading growth with 6.1% USG, driven by a 3.8% increase in volume
• Announced separation of Ice Cream and launch of major productivity programme to accelerate the Growth Action Plan
• 2024 outlook unchanged with underlying sales growth of 3% to 5% and a modest improvement in underlying operating margin

Statement from Hein Schumacher, CEO

“Unilever delivered improved volume growth in the first quarter. This was driven by our Power Brands which saw underlying sales growth of 6.1%, with strong performances from Dove, Knorr, Rexona and Sunsilk.

We are implementing the Growth Action Plan at speed, focused on three clear priorities: delivering higher-quality growth, creating a simpler and more productive business, and embedding a strong performance focus. This is underpinned by our commitment to do fewer things, better and with greater impact.

In March, we announced the separation of Ice Cream and the launch of a comprehensive productivity programme. These actions will drive focus, faster growth and reduce costs. Dedicated project teams are progressing the work at pace.

Unilever’s transformation is at an early stage, but we have increasing confidence in our ability to deliver sustained volume growth and positive mix as we accelerate gross margin expansion.”

Outlook

Our 2024 guidance is unchanged. We expect underlying sales growth (USG) for 2024 to be within our multi-year range of 3% to 5%, with an increasing contribution from volume growth.

We are confident of delivering a modest improvement in underlying operating margin for the full year, reflecting higher gross margin and increased investment behind our brands.

Overall performance

Underlying sales growth in the quarter was 4.4%, with balanced volume and price growth. Underlying volume growth increased to 2.2% from 1.8% in Q4 2023, while underlying price growth of 2.2% moderated slightly from 2.8% in the previous quarter. The Power Brands continued to perform strongly with 6.1% underlying sales growth, underpinned by volume growth of 3.8%.

Beauty & Wellbeing grew underlying sales by 7.4%, with volume growth of 5.6% driven by continued double-digit growth from Health & Wellbeing and Prestige Beauty. Personal Care grew 4.8% with 1.4% from volume despite a particularly strong prior year comparator.

Home Care underlying sales increased 3.1%, with 4.3% volume growth more than offsetting the negative price growth reflecting commodity cost driven deflation in some of our markets. Nutrition grew underlying sales by 3.7%, with volumes sequentially improving to -0.4% from -1.1% in Q4. Ice Cream grew 2.3%, led by price as volumes declined -0.9%. As we move into the main ice cream season, Ice Cream’s performance will be supported by the operational changes that have been made to drive improved productivity, product rationalisation and investment behind significant innovations.

Emerging markets grew underlying sales 5.4%, with 3.9% from volume. Latin America, Turkey and Africa continued their momentum from 2023 and delivered strong sales growth with positive volumes. Sales in China grew mid-single digit with good volumes, particularly in Unilever Food Solutions. South Asia growth was driven by volume, while input cost deflation led to further negative price growth in India. South East Asia was impacted by a sales decline in Indonesia, reflecting the continued, but less material, impact of some Indonesian consumers avoiding multinational brands in response to the geopolitical situation in the Middle East.

Underlying sales in developed markets grew 3.0%, with volumes almost flat at -0.3%. North America delivered sales growth of 3.6%, with positive volume growth at 1.4% driven by continued strong performances of Health & Wellbeing and Prestige Beauty. In Europe, underlying sales growth was 4.0%, driven by price. Volume declined 1.5%, but sequentially improved with a return to volume growth in the UK, France and Eastern Europe, as price growth continued to moderate from the peak in Q2 2023.

Turnover was €15.0 billion, up 1.4% versus the prior year, including -2.0% from currency and -0.9% from disposals net of acquisitions.

Capital allocation

With our full year results in February 2024, we announced that the Board had approved a share buyback programme of up to €1.5 billion to be conducted during 2024, which we expect to commence in the second quarter. The quarterly interim dividend for the first quarter is maintained at €0.4268.

Beauty & Wellbeing (21% of Q1 Group turnover)

In Beauty & Wellbeing, we are focused on three key priorities that will drive the unmissable superiority of our brands: elevating our core Hair Care and Skin Care brands to increase premiumisation; fuelling the growth of Prestige Beauty and Health & Wellbeing with selective international expansion; and continuing to strengthen our beauty and wellbeing capabilities.

Beauty & Wellbeing underlying sales grew 7.4% with 5.6% from volume and 1.7% from price.

Hair Care delivered mid-single digit growth with positive volume and price. Dove grew high-single digit supported by the launch of Scalp+ Hair Therapy, which is clinically proven to create optimal scalp health and hair density. Clear, the world’s best-selling shampoo for men, grew high-single digit helped by the continued rollout of our patented anti-dandruff shampoo. Sunsilk grew double-digit while TRESemmé grew high-single digit and continued to expand its ultra-gloss Lamellar Shine shampoos and conditioners to new markets.

Core Skin Care grew mid-single digit with good growth in India and the US. This growth was partially offset by a low-single digit decline in North Asia driven by price. Vaseline grew double-digit with the successful rollout of Gluta Hya body care to new markets and the launch of new variants, including our Smooth and Glow range which offers the first body lotion with chemical exfoliation. Following the relaunch last year, Pond’s face care continued its good momentum with high-single digit growth led by volume.

Health & Wellbeing delivered another quarter of double-digit growth with the expansion of Liquid IV in the UK and strong contributions from Olly and Nutrafol. In Q1, we extended Nutrafol into skin care with a physician-formulated daily supplement for women designed to address the root causes of acne. Prestige Beauty grew double-digit led by Tatcha, Hourglass and Living Proof.

Personal Care (23% of Q1 Group turnover)

In Personal Care, we are focused on winning with science-led brands that deliver unmissable superiority to our consumers across Deodorants, Skin Cleansing, and Oral Care. Our priorities include developing superior technology and multi-year innovation platforms, leveraging partnerships with our customers, and expanding into premium areas and digital channels.

Personal Care underlying sales grew 4.8% with 1.4% from volume and 3.4% from price.

Deodorants grew double-digit with high-single digit volume growth. Growth was led by strong performances in Europe and Latin America. Dove double-digit growth was helped by the US launch of Whole Body Deodorants with 72-hour odour control for full-body freshness. Rexona and Axe contributed strong growth with continued momentum of our multi-year platforms, 72-hour nonstop odour and sweat protection and our Fine Fragrance range.

Skin Cleansing was flat with low-single digit price offset by volume declines. Q1 growth was impacted by deflation in India and market challenges in Indonesia. Dove grew high-single digit with mid-single digit volume growth. In the US, we launched a premium range of Dove Body Wash infused with clinically proven skin care serums including hyaluronic acid, collagen and vitamin C.

Oral Care continued to grow mid-single digit with positive volume and price, led by double-digit growth in Closeup.

Home Care (21% of Q1 Group turnover)

In Home Care, we focus on delivering for consumers who want superior products that are sustainable and great value. We drive growth through unmissable superiority in our biggest brands, in our key markets and across channels. We have a resilient business that spans price points and grows the market by premiumising and trading consumers up to additional benefits.

Home Care underlying sales grew 3.1% with 4.3% from volume and -1.1% from price.

Fabric Cleaning grew low-single digit with mid-single digit volume and negative price. This was led by Europe which grew high-single digit, with a return to positive volume growth. India and Latin America grew volume, which was partially offset by price declines in our powders portfolio as a result of commodity deflation. OMO grew low-single digit with mid-single digit volume.

Home & Hygiene grew mid-single digit with mid-single digit volume and slightly positive price. Cif and Domestos grew double-digit with strong volume. Following the successful launch of Domestos Power Foam in the UK in 2023, we expanded the product to new markets and extended the range to include specialist solutions to remove limescale and provide long-lasting fragrance.

Nutrition (23% of Q1 Group turnover)

In Nutrition, our strategy is to deliver consistent, competitive growth by offering unmissably superior products through our biggest brands. We do this by reaching more consumers and focusing on top dishes and high consumption seasons to satisfy consumer’s preferences on taste, health and sustainability; while delivering productivity and resilience in our supply chain.

Nutrition underlying sales grew 3.7% with 4.1% from price and -0.4% from volume. Volume sequentially improved but was still negative in Europe, partially affected by the impact of SKU reductions.

Dressings delivered mid-single digit growth with positive price and volume. Hellmann’s led growth supported by the relaunch of Plant Based Mayo and the launch of four new variants of Flavoured Mayo: Chipotle, Italian Herbs, Tajin, and Truffle.

Scratch Cooking Aids grew high-single digit. Knorr led growth as it continued to expand its multi-year ‘Eat for Good’ campaign, including superior Bouillon & Seasonings variants for both retail and foodservice. North America grew mid-single digit supported by the launch of ready-to-eat rice cups. Europe saw mid-single digit price growth fully offset by a decline in volume, while Latin America, Africa and North Asia all grew double-digit.

Unilever Food Solutions grew double-digit with high-single digit volume, led by strong growth in China against a soft comparator.

Ice Cream (12% of Q1 Group turnover)

In Ice Cream, our immediate strategic priority is to expand operating profit and global market share. We will do this by building the unmissable superiority of our brands, accelerating market development in emerging markets, continuing to lead the industry on innovation and premiumisation, and by stepping up our performance and productivity. In March, we announced the planned separation of Ice Cream which we expect to be completed by the end of 2025. The separation will create a world-leading business, operating in a highly attractive category with five of the top ten selling global ice cream brands.

Ice Cream underlying sales grew 2.3% with 3.2% from price, partially offset by negative volume of -0.9%.

In-home Ice Cream was flat with price offset by a decline in volume. Out-of-home Ice Cream grew mid-single digit driven by price.

Wall’s grew mid-single digit with positive price and volume. Magnum declined low-single digit with price growth more than offset by a volume decline. We launched a new Magnum ‘Pleasure Express’ range with three variants: Euphoria, Wonder, and Chill. Ben & Jerry’s and Cornetto grew low-single digit with positive volumes.

As we move into the main summer season, Ice Cream has made operational changes to drive improved productivity and investment behind our brands and innovations.

Safe Harbour

This announcement contains forward-looking statements within the meaning of the securities laws of certain jurisdictions, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Words and terminology such as ‘will’, ‘aim’, ‘expects’, ‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vision’, ‘continue’, ‘should’, ‘would be’, ‘seeks’, or the negative of these terms and other similar expressions of future performance, results, actions or events, and their negatives, are intended to identify such forward-looking statements. Forward-looking statements include, but are not limited to, statements and information regarding Unilever’s acceleration of its Growth Action Plan, Unilever’s portfolio optimisation towards global or scalable brands, the capabilities and potential of such brands, the structure, timing, impacts and other aspects of the separation of Ice Cream, Ice Cream’s future operational model, strategy, growth potential, performance and returns, Unilever’s productivity programme, its impacts and cost savings over the next three years and operation dis-synergies from the separation of Ice Cream, the post-separation and post-disposal structure, operating model, strategy, portfolio, performance and returns of Unilever, including but not limited to Unilever’s post-separation topline growth and margin. Forward-looking statements can be made in writing but also may be made verbally by directors, officers and employees of the Group (including during management presentations) in connection with this announcement. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance or outcomes. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained in this section. Readers should not place undue reliance on forward-looking statements.

Because these forward-looking statements involve known and unknown risks and uncertainties, a number of which may be beyond the Group’s control, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Among other risks and uncertainties, the material or principal factors which could cause actual results to differ materially from the forward-looking statements expressed in this announcement are: Unilever’s ability to obtain any approvals necessary to consummate the separation of Ice Cream, Unilever’s ability to successfully separate Ice Cream and realise the anticipated benefits of the separation; Unilever’s ability to successfully execute and consummate its productivity programme in line with expected costs to achieve expected savings; Ice Cream’s ability to succeed as a standalone company; Unilever’s global brands not meeting consumer preferences; Unilever’s ability to innovate and remain competitive; Unilever’s investment choices in its portfolio management; the effect of climate change on Unilever’s business; Unilever’s ability to find sustainable solutions to its plastic packaging; significant changes or deterioration in customer relationships; the recruitment and retention of talented employees; disruptions in Unilever’s supply chain and distribution; increases or volatility in the cost of raw materials and commodities; the production of safe and high quality products; secure and reliable IT infrastructure; execution of acquisitions, divestitures and business transformation projects; economic, social and political risks and natural disasters; financial risks; failure to meet high and ethical standards; and managing regulatory, tax and legal matters.

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions, and expectations can change as a result of many possible events or factors, not all of which are known to us. If a chance occurs, events, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements.

The forward-looking statements speak only as of the date of this announcement. Except as required by any applicable law or regulation, the Group expressly disclaims any intention, obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual events, to differ materially from those contained in any forward-looking statements. Further details of potential risks and uncertainties affecting the Group are described in the Group’s filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including in the Annual Report on Form 20-F 2023 and the Unilever Annual Report and Accounts 2023.

Media Contacts:

Press-Office.London@Unilever.com

SOURCE: Unilever