Another strong quarter of growth with sales guidance raised

Another strong quarter of growth with sales guidance raised

Today, we announced our results for the third quarter of 2022

  • Underlying sales growth accelerated to 10.6% in the quarter, and sales guidance raised for the full year
  • Price development stepped as much as 12.5% within the quarter, with volumes declining 1.6%
  • Turnover elevated 17.8% including a currency impact of 8.8% and (2.1)% from disposals net of acquisitions
  • The billion+ Euro manufacturers, accounting for more than 50% of Group turnover, grew 14%, led by strong performances from OMO, Hellmann’s, Rexona, Magnum and Lux
  • Simpler, extra category-focused organisation working since 1 July
  • Continued portfolio reshaping with the sale of the global tea business completed and the acquisition of Nutrafol, a leading provider of hair wellness products
  • Second €750 million share buyback tranche, announced in September, will complete in December 2022
  • Quarterly interim dividend for Q3 2022 is maintained at €0.4268

Statement from Alan Jope

“Unilever has delivered one other quarter of development in difficult macroeconomic situations. Underlying gross sales development improved to 10.6%, led by additional will increase in pricing with solely a restricted affect on quantity, and we now anticipate underlying gross sales development for the total 12 months 2022 to be above 8%.

“We have delivered development in every of our 5 Business Groups, led by a powerful efficiency from our billion+ Euro manufacturers, rising 14% within the quarter. Strong pricing permits us to proceed to drive elevated funding behind our manufacturers.

“Our organisation is now higher structured to ship constant development by an easier, extra category-focused working mannequin. The full advantages shall be realised over time, and we’re seeing encouraging early indicators of improved accountability and sooner decision-making.

“The world macroeconomic outlook stays combined, and we anticipate the challenges of excessive inflation to persist in 2023. The supply of constant development stays our first precedence.”


We now anticipate underlying gross sales development for the total 12 months 2022 to be above 8%, with extra unfavorable underlying quantity development than within the first 9 months.

Our expectation for web materials inflation (NMI) for 2022 is nearly unchanged at round €4.5 billion, with €2.5 billion within the second half. Although some commodities have softened from their peaks, we anticipate value stress to hold ahead into 2023, pushed by foreign money devaluation, greater uncooked materials prices versus helpful covers within the first half of 2022, and better provider processing prices from power and labour inflation. Our present estimate for NMI in H1 2023 versus H1 2022 is within the area of €2 billion, with a variety of potential outcomes.

Investment in development is our precedence, and we’ll proceed to guard funding ranges. In the second half of 2022, we anticipate to extend spend in model and advertising and marketing, R&D and capital expenditure, as we did within the first half. Our full 12 months underlying working margin expectation for 2022 stays at 16%, and we proceed to anticipate to enhance margin in 2023 and 2024, by pricing, combine and financial savings.

Unilever general efficiency

Underlying gross sales development stepped as much as 10.6% and was broad-based throughout all Business Groups. Price development has sequentially improved in every of the previous seven quarters, reaching 12.5% within the third quarter. While pricing had, as anticipated, some unfavorable affect on quantity, underlying quantity development improved in 4 Business Groups in comparison with the second quarter.

Beauty & Wellbeing grew 6.7%, pushed by worth with barely unfavorable quantity primarily as a result of core Skin Care and Hair Care. Personal Care underlying gross sales have been up 8.9%, led by elevated pricing and a decrease quantity decline as Deodorants returned to quantity development.

Home Care delivered 13.6% USG with a quantity decline of three.6%, having taken the best pricing motion given its publicity to enter value will increase. Nutrition grew 11.8% with nearly flat quantity as a result of sturdy performances in Dressings and Food Solutions. Ice Cream improved underlying gross sales by 13.2%, pushed by double-digit worth development in each in-home and out-of-home. Volume was up 1.0%, helped by a powerful summer season season in Europe in comparison with the prior 12 months.

Emerging markets grew 13.3% with a 14.9% contribution from worth and quantity at (1.4)%. South Asia continued to develop strongly by each worth and quantity. Price development in Latin America elevated to 23.2% with volumes contracting by 4.6%. China returned to barely constructive development, and gross sales development in South-East Asia benefitted from lapping the prior 12 months lockdown impact in some markets. Developed markets elevated by 7.1%, with 9.3% from worth and (2.0)% from quantity. North America grew 8.3%, boosted by sturdy performances of Nutrition and Ice Cream. Europe delivered 5.4% development, helped by double-digit development in Ice Cream.

Turnover elevated 17.8% to €15.8 billion, which included a foreign money affect of 8.8% and (2.1)% from disposals web of acquisitions. This displays the sale of the worldwide tea enterprise, ekaterra, which accomplished on 1 July 2022.

Capital allocation and working mannequin

On 22 July, we accomplished the primary tranche of €750 million of the share buyback programme of as much as €3 billion. On 6 September 2022, we introduced a second tranche of €750 million which can full in December 2022. The quarterly interim dividend for the third quarter is maintained at €0.4268.

Our pension funds confronted no liquidity or operational points by latest market volatility and stay nicely funded.

Since 1 July 2022, our easier, extra category-focused working mannequin for Unilever has been in place, organised round 5 Business Groups and a technology-driven spine, Unilever Business Operations. We anticipate to ship the brand new construction inside current restructuring plans, and to generate round €600 million of value financial savings over the primary two years after 1 July, with the bulk in 2023.

Beauty & Wellbeing (21% of Q3 turnover)

Beauty & Wellbeing underlying gross sales grew 6.7%, with 7.3% from worth and (0.6)% from quantity.

Hair Care grew excessive single-digit, pushed by Latin America and South Asia, partially offset by modest development in developed markets and China. Sunsilk and Clear carried out nicely with sturdy contributions from worth. Skin Care grew low single-digit, as sturdy development in South-East Asia was offset by declines in Europe and North Asia. Vaseline and Pond’s delivered good development, supported by improvements with extra shopper advantages. Prestige Beauty carried out nicely with sturdy contributions from Paula’s Choice and Living Proof which entered into the bond-building premium hair care class.

Hourglass continued its enlargement into China by on-line and premium retail shops. Health & Wellbeing turnover now consists of gross sales of latest acquisition Nutrafol, whereas Liquid I.V. contributed strongly to underlying gross sales development.

Personal Care (23% of Q3 turnover)

Personal Care underlying gross sales grew 8.9%, with 13.5% from worth and (4.1)% from quantity. While the quantity decline was decrease than within the second quarter, it was affected by sturdy worth will increase taken in Skin Cleansing to mitigate enter value inflation.

Deodorants continued to carry out strongly, delivering double-digit pricing and constructive quantity development. This was supported by continued premiumisation and robust improvements, such because the 72-hour safety expertise from Rexona. Skin Cleansing delivered sturdy double-digit worth development with excessive single-digit quantity decline. Lux grew strongly, nonetheless benefitting from the relaunch of its bars in South Asia and the Middle East which give an additional improved skincare expertise.

The reformulated Dove deep moisture physique wash, with microbiome nutrient serum, continued to carry out nicely throughout its launch markets. Oral Care achieved excessive single-digit development, helped by the relaunch of Pepsodent with elevated naturals and efficacy credentials in South-East Asia, Africa and the Middle East.

Home Care (20% of Q3 turnover)

Home Care underlying gross sales grew 13.6%, with 17.8% from worth and (3.6)% from quantity.

Fabric Cleaning held volumes whereas attaining greater than 20% worth development, pushed by superb performances in India, Brazil, Turkey and Vietnam with modest gross sales development in Europe and China. Helped by their model power, OMO and Radiant contributed strongly for an additional quarter. Fabric Enhancers grew double-digit with modest quantity decline, because the class benefitted from some post-Covid return of customers in South-East Asia and Turkey.

Comfort grew double-digit with constructive quantity because it continued to profit from the relaunch with a brand new perfume and ‘Clothes Care’ expertise to raised defend garments from injury. Home & Hygiene delivered single-digit development with decrease quantity in a declining market that displays a slowdown in disinfecting habits.

Nutrition (21% of Q3 turnover)

Nutrition underlying gross sales grew 11.8%, with 11.7% from worth and 0.1% from quantity.

The largest class, Scratch Cooking Aids, grew excessive single-digit with a modest quantity decline which was pushed by Europe. South-East Asia, Africa and North America carried out strongly led by Knorr. Unilever Food Solutions recovered to pre-Covid quantity ranges and is now nicely forward on gross sales. Dressings had a really sturdy quarter with broad-based, double-digit worth development and constructive volumes, supported by continued development momentum of Hellmann’s, significantly within the United States. Our remaining Beverages enterprise delivered slight quantity and worth development in aggressive markets.

Ice cream (15% of Q3 turnover)

Ice Cream underlying gross sales grew 13.2%, with 12.0% from worth and 1.0% from quantity.

Both in-home and out-of-home Ice Cream grew strongly, pushed by double-digit worth development. Volume development was pushed by out-of-home which continued to recuperate gross sales misplaced throughout the pandemic however is but to return to 2019 volumes. In-home confirmed a slight quantity decline, reflecting excessive worth development within the Americas and a few provide points within the United States.

Europe benefitted from a powerful summer season season, and Turkey delivered superb development regardless of the high-inflation stress on customers. The Heart model, Magnum and Cornetto delivered constructive quantity development supported by continued power of latest variant improvements, equivalent to Magnum Remix which has been launched throughout 65 international locations.

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