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Unilever Boosted by Power Brands as Consumers Trade Back Up — 2nd Update

By Michael Susin and Ian Walker


Dove soap owner Unilever backed its full-year guidance after reporting better than-expected turnover for the first quarter on higher volumes that were boosted by its power brands.

The Anglo-Dutch multisector retailer--which also owns consumer brands such as Cif and Domestos cleaning products--continues to expect sales to grow 3% to 5% this year and a modest improvement in operating margin, both on an underlying basis.

Unilever on Thursday said quarterly turnover rose to 15.0 billion euros ($16.05 billion) from the EUR14.75 billion reported for the same period a year ago. This compares with a market consensus of EUR14.66 billion compiled by the company.

Underlying sales growth was 4.4% on year, beating the 3.0% forecast by analysts. Growth was driven by volumes that rose 2.2%, beating a consensus for a 1.2% rise.

Unilever said that power brand volumes rose 6.1%, with strong performances from Dove, Knorr, Rexona and Sunsilk, as consumers trade back up to premium brands.

Unilever's volumes returned to growth in the fourth quarter of 2023 for the first time in two years, when consumer-goods companies started to lift their prices to pass on the inflationary pressures to consumers, often sacrificing their sales volumes.

Unilever said in March that it plans to separate its ice-cream division--which also makes Magnum, Wall's, Breyers, Talenti, Popsicle and Klondike--into a stand-alone business, ending more than 100 years in the business. It said listing the business as a separate entity is the most likely outcome. A sale is also a possibility.

It also said that 7,500 jobs would be affected as part of a restructuring program aimed at saving EUR800 million over the next three years.

The plan is the latest in a string of moves by Chief Executive Hein Schumacher to simplify Unilever and boost growth at the company, which analysts say has underperformed in recent years.

Schumacher said on Thursday that while the company's reorganization is at an early stage, the board is confident to deliver sustained volume growth and positive mix as the company accelerates gross margin expansion.

"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," he said.

Shares at 0715 GMT were up 155.0 pence, or 4%, at 4,018.0 pence. They are currently up 5.7% over the year to date.


Write to Michael Susin at and Ian Walker at


(END) Dow Jones Newswires

April 25, 2024 03:49 ET (07:49 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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