Unilever's productivity programme will drive focus, faster growth and reduce costs: Hein Schumacher, CEO of Unilever
In March, Unilever announced the separation of Ice Cream and the launch of a comprehensive productivity programme. These actions will drive focus, faster growth and reduce costs, said global CEO Hein Schumacher, adding that dedicated project teams are progressing the work at pace.
FMCG behemoth Unilever recently announced its results for the first quarter of 2024. Hein Schumacher, CEO of Unilever said the company delivered improved volume growth in the first quarter, driven by Power Brands which saw underlying sales growth of 6.1%, with strong performances from Dove, Knorr, Rexona and Sunsilk.
Unilever recorded an underlying sales growth of 4.4%, with volume growth increasing to 2.2%. The company stated that all five Business Groups reported underlying sales growth, led by Beauty & Wellbeing. Turnover increased 1.4% to €15.0 billion, with Power Brands (75% of turnover) leading growth with 6.1% USG, driven by a 3.8% increase in volume.
The company expects underlying sales growth (USG) for 2024 to be within its multi-year range of 3% to 5%, with an increasing contribution from volume growth. Unilever is confident of delivering a modest improvement in underlying operating margin for the full year, reflecting higher gross margin and increased investment behind its brands.
Schumacher added, "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, Unilever announced the separation of Ice Cream and the launch of a comprehensive productivity programme. These actions will drive focus, faster growth and reduce costs, Schumacher, adding that 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,” said the FMCG major's global chief.
Category growth
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 Unilever's 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," the company stated.
Emerging market view
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.
