Unilever Trading Statement – First Quarter 2023
| Strong start to the year and continued progress against strategic priorities |
| First Quarter 2023 | |||
| (unaudited) | USG | Turnover | vs 2022 |
| Unilever | 10.5% | €14.8bn | 7.0% |
| Beauty & Wellbeing | 9.3% | €3.1bn | 13.3% |
| Personal Care | 12.7% | €3.4bn | 12.6% |
| Home Care | 10.2% | €3.2bn | 8.6% |
| Nutrition | 11.9% | €3.4bn | (4.4)% |
| Ice Cream | 6.0% | €1.7bn | 8.0% |
First Quarter highlights
• Underlying sales growth (USG) accelerated to 10.5% , driven by progress against strategic priorities
• Growth was broad-based across Business Groups and geographies
• Price growth remained elevated at 10.7%, with an improved quarter-on-quarter volume performance at (0.2)%
• Turnover increased 7.0% to €14.8 billion , including a currency impact of (0.4)% and (2.8)% from disposals net of acquisitions
• Our billion+ Euro brands , accounting for 54% of Group turnover, delivered underlying sales growth of 12.1%, led by strong performances from OMO, Hellmann’s, Rexona and Lux
• Continued portfolio reshaping with the announced sale of the Suave brand in North America
• Third €750 million share buyback tranche , announced in March, will complete in July 2023
• Quarterly interim dividend for Q1 2023 is maintained at €0.4268
Chief Executive Officer statement
“Unilever has had a good start to the year, delivering another quarter of strong topline growth. Underlying sales growth accelerated to 10.5%, driven by price growth in response to continued high input cost inflation and an improved volume performance.
We are continuing to execute well on our strategic priorities. Growth was broad-based across the five Business Groups, underpinned by strong performances from our billion+ Euro brands. We have stepped up both the effectiveness of our innovation and the investment behind our brands. We continue to shift our portfolio into higher growth spaces, with the delivery of another quarter of double-digit sales growth in Prestige Beauty and Health & Wellbeing, and the announced sale of Suave in North America. Our new operating model is driving focused resource allocation, and is unlocking a culture of bolder, faster decision-making and disciplined execution.
We remain focused on navigating through continued macroeconomic uncertainty and are confident in our ability to deliver another year of strong growth, which remains our first priority.”
Alan Jope
27 April 2023
| Outlook |
In a volatile and high-cost environment, we continue to carefully balance price growth, volume and competitiveness. We will deliver another year of strong underlying sales growth in 2023, with an improved volume performance compared to 2022. We will continue to price and drive our cost savings programmes in order to allow us to invest behind our brands.
Our expectation for net material inflation (NMI) for 2023 is unchanged. We anticipate around €1.5 billion in the first half and significantly lower NMI in the second half, with a wide range of possible outcomes, though we do not expect cost deflation.
We now expect underlying sales growth for the full year 2023 to be at least at the upper end of our multi-year range of
3 – 5%. Underlying price growth will remain high in the first half and soften through the year.
Underlying operating margin in the first half will be at least 16%. We continue to expect a modest improvement in underlying operating margin in the full year, with another year of increased investment.
| First Quarter Review: Unilever Group |
| (unaudited) | Turnover | USG | UVG | UPG | Acquisitions | Disposals | Currency | Turnover change |
| First Quarter | €14.8bn | 10.5% | (0.2)% | 10.7% | 0.7% | (3.5)% | (0.4)% | 7.0% |
Performance
Underlying sales growth accelerated to 10.5% in the first quarter. As underlying price growth moderated to 10.7% from 13.3% in the fourth quarter of 2022, volumes were virtually flat at (0.2)%, driven by a step-up in volume performance across all Business Groups.
Beauty & Wellbeing grew underlying sales by 9.3% driven by price. Volume growth of 2.6% was helped by another quarter of double-digit growth in Prestige Beauty and Health & Wellbeing, which now account for 5% of Group turnover. Personal Care underlying sales were up 12.7%, driven by price and 3.0% volume growth of which the majority came from strong pipeline refill in Deodorants. Home Care delivered 10.2% USG with a volume decline of 2.8% which was largely caused by lower volumes in Home & Hygiene and Air Wellness. Nutrition grew 11.9% with slightly negative volume at (1.3)% driven by Scratch Cooking Aids. Ice Cream improved underlying sales by 6.0% despite negative UVG of 4.1%. Volumes grew in out-of-home channels but this was more than offset by lower in-home volumes.
Emerging markets grew underlying sales by 11.7% with price of 11.8% and volume at (0.1)%. Latin America stepped up growth to 18.7%, led by continued strong price growth and volumes at 0.2%. South Asia grew again double-digit through price and volume. China returned to positive USG of 1.8% following the lifting of pandemic-related restrictions. South East Asia grew mid-single digit, while Turkey delivered strong volume growth in a continued hyper-inflationary environment. Developed markets increased by 8.7%, with 8.9% from price and (0.2)% from volume. Volumes held up better in North America than in Europe.
Turnover increased 7.0% to €14.8 billion, which included a currency impact of (0.4)% and (2.8)% from disposals net of acquisitions. This reflected the sale of the Tea business, which completed on 1 July 2022, and the acquisition of Nutrafol, which completed on 7 July 2022.
Operating model and capital allocation
Since 1 July 2022, our simpler, more category-focused operating model for Unilever has been in place, organised around five Business Groups and a technology-driven backbone, Unilever Business Operations. We continue to expect around €600 million of cost savings over the first two years, with the majority delivered in 2023.
After completing two €750 million tranches in 2022 of our ongoing share buyback programme of up to €3 billion, we announced a third €750 million tranche on 17 March 2023, which will complete on or before 23 July 2023. The quarterly interim dividend for the first quarter is maintained at €0.4268.