Unilever sales growth accelerates under CEO’s overhaul plan

Dasha Afanasieva

Bloomberg

<p>Unilever Plc’s sales growth is accelerating as Chief Executive Officer Hein Schumacher’s turnaround of the consumer goods company gathers pace.</p><div class="paywall-selector"></div><div class="paywall">



<p>Revenue increased 4.5% in the third quarter, beating the 4.3% expected by analysts, the maker of soap and stock cubes said Thursday. Consumers are buying more of its brands again with volumes up for the fourth consecutive quarter, it added.&nbsp;</p>



<p>Unilever’s shares rose as much as 2.2% in early trading. The stock is up about 25% since the start of the year.&nbsp;</p>



<p>The beat on performance was “uneventful” but that in itself is “testament to the extent to which Unilever has been rehabilitated,” RBC analyst James Edwardes Jones said in a note.&nbsp;</p>



<p>The Magnum maker is in the middle of a shakeup, which includes a spinoff or sale of its ice cream business and a cost-cutting initiative that will shed 7,500 jobs globally. It said the separation of its ice-cream unit, which was the fastest-growing division in the quarter partly thanks to a slowdown last year, is still on track with the split expected to complete by the end of next year.</p>



<p>The ice cream separation is part of Schumacher’s efforts to restore investor confidence after a period of underperformance. Like other consumer goods companies, he is weaning Unilever off price-led growth, after a stretch of high inflation, and moving back to focusing on expanding volumes.&nbsp;</p>



<p>His efforts have been challenged by weak consumer sentiment in countries including the US and China.&nbsp;</p>



<h2 class="wp-block-heading">Challenging Markets&nbsp;</h2>



<p>Emerging markets — which represent the majority of sales and have historically been Unilever’s growth engine — performed poorly compared to the group overall with underlying sales growth of 2.9%. There was weakness in China, falling prices in India and operational challenges in Indonesia where shoppers have been boycotting western brands over the war in Gaza.&nbsp;</p>



<p>North America, where Unilever’s portfolio is dominated by beauty, supplements and personal care, was the fastest-growing geography, pointing to the structurally stronger growth path of those sectors.</p>



<p>Still, Unilever reiterated its annual target of underlying sales growth of between 3% to 5%, with the majority coming from volume. Underlying operating margin for the full year is expected to be at least 18%.</p>



<p>Yogurt maker Danone also beat expectations in the third quarter Thursday, bolstered by its health-focused portfolio.&nbsp;</p>



<p>Danone and Unilever are transitioning to volume-led growth more successfully than Nestle SA: The world’s biggest food group cut its full year outlook for the second quarter last week. That marks a reversal of fortunes for Nestle and its Anglo-Dutch peer Unilever, which was until recently the laggard.</p></div>

Revenue increased 4.5% in the third quarter, beating the 4.3% expected by analysts, the maker of soap and stock cubes said Thursday.

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