Unilever Returns To Volume Growth Under Turnaround Plan

(Bloomberg) -- Magnum ice-cream maker Unilever Plc sold more products like deodorant and mayonnaise for the first time in more than two years, as easing price inflation encouraged shoppers to buy more.

Revenue grew 4.7% in the final quarter of 2023, just ahead of analysts’ estimates. Volume returned to growth for the first time since 2021. 

New Chief Executive Officer Hein Schumacher in October set out his plan to revitalize growth at the conglomerate, committing to his predecessor’s top-line sales growth of between 3% and 5% with a modest margin expansion. The company reiterated that outlook for 2024.

Unilever is the first of Europe’s big food companies to report earnings this month, and its results may signal that consumers are ready to purchase more products again with the worst of inflation over.

To arrest declines in market share, Schumacher pledged to focus investment on its top 30 brands, which represent around three-quarters of revenue. Still, ice cream was the slowest growing division with underlying sales rising a “disappointing” 2.3% last year. 

Schumacher has so far rejected calls for a breakup of the company, saying he will try to revive performance without more drastic measures. But the results again showed ice cream and other food products lagging behind personal care, beauty and home care — more ammunition for investors and analysts favoring a split. 

Unilever increased its gross margin by 2 percentage points last year, following an acceleration in the second half, as raw material costs eased.

Unilever said it will start a €1.5 billion ($1.6 billion) share buyback in the second quarter.

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