Unilever price hikes support turnover

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Currency-adjusted first-quarter revenue increased 7.3% to 13.8 billion euros, above expectations. This change is explained by an 8.3% rise in prices, particularly in home care. Higher prices drove volumes down 1%, although food solutions and out-of-home ice cream continued to improve as pandemic-related restrictions eased.

Inflation is expected to increase costs by €2.1 billion in the first half and €2.7 billion in the second half. Unilever plans to raise prices to combat this, which appears to be hurting volumes.

First-half revenue growth is now expected to be at the high end of forecasts of 4.5% to 6.5% and operating margins between 16 and 17%. In the second half, margins are expected to be at the lower end of this range due to the impact of inflation.

The group spent €750 million of the €3 billion earmarked for share buybacks and announced a quarterly dividend of €0.4268.

Shares were broadly flat following the announcement.

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First quarter results (underlying)

Sales in Beauty & Personal care increased by 7.1% to 5.7 billion euros. This was driven by a 7.4% increase in prices, which resulted in a 0.3% decline in volumes. Price increases helped skin cleansing generate high single-digit growth, although the market continued to contract. Prestige Beauty grew in double digits and Hourglass and Living Proof delivered strong performances as high-end hair and makeup gained momentum.

Strong fabric cleaning performance helped Home Care sales increased by 9.2% to 3.0 billion euros. This was led by a price increase of 12.5%, which offset a volume decline of 2.9%. Home & Hygiene saw modest growth as price increases were offset by volume declines and the group missed last year’s strong performance.

Hellmanns double-digit growth has helped Food and refreshments sales increased by 6.5% to 5.1 billion euros. This increase is explained by a price increase of 7.1% which more than compensated for a decrease in volumes of 0.6%. The growth of plant-based food in Latin America and the benefits of Veganuary in Europe have allowed the Knorr brand to continue to evolve and Magnum’s latest “Remix” innovation has supported strong growth momentum.

Prices increased in all geographies. The Americas led the way with prices up 10%. Volumes were down in all areas except Asia, Africa, Middle East, Turkey, Russia, Ukraine and Belarus, where volumes were up 0.5%.

eCommerce sales now account for 14% of sales.

Unilever’s previously announced reorganization into five business categories is expected to be launched from mid-year. It is expected to generate cost savings of €600 million over the next two years.

The sale of Unilever’s global tea business is expected to be completed in the second half of the year.

Unilever key figures


  • Price/earnings ratio: 17.0
  • Ten-year average price/earnings: 19.2
  • Prospective dividend yield (next 12 months): 4.0%


All ratios are from Refinitiv. Remember that returns are variable and are not a reliable indicator of future income. Keep in mind that key numbers shouldn’t be considered alone – it’s important to understand the big picture.

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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. Unless otherwise stated, estimates, including forward-looking returns, are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Returns are variable and not guaranteed. Investments go up and down in value, so investors could suffer a loss.

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