Unilever Reports Strong FY23 Results with 7% Underlying Sales Growth
Unilever PLC, the multinational consumer goods company, has reported its financial results for the fiscal year 2023, showcasing a strong performance. The company’s underlying sales grew by 7.0% during the year, driven by a 6.8% increase in prices and a 0.2% rise in volume.
Despite a 0.8% year-on-year decrease in turnover to €59.6 billion on a reported basis, Unilever managed to achieve growth in its key segments. Beauty & Wellbeing saw underlying sales growth of 8.3%, while Personal Care and Home Care recorded increases of 8.9% and 5.9% respectively. Nutrition also climbed by 7.7%. However, Ice Cream sales experienced a slight decline of 2.3%.
Unilever’s gross margin increased by 200 basis points to 42.2% due to cost optimizations and improved net productivity. The company also reported an underlying operating profit of €9.9 billion, representing a 2.6% increase year-on-year, with a margin improvement of 60 basis points to 16.7%. Underlying earnings per share stood at €2.60, reflecting a 1.4% increase for the year.
However, Unilever faced challenges in maintaining its market share. The company reported a decrease in the percentage of businesses winning market share on a rolling 12-month basis, which dropped to 37%. This decline was attributed to share losses to private labels in Europe, consumer shifts to super-premium segments in North America, and a significant reduction of unprofitable SKU (Stock Keeping Unit) globally.
In terms of shareholder returns, Unilever returned €5.9 billion to shareholders through dividends and share buybacks in 2023. The company completed the final two tranches of its €3 billion share buyback program and approved a new buyback program of up to €1.5 billion for the fiscal year 2024, set to commence in the second quarter.
Looking ahead, Unilever expects its underlying sales growth for FY24 to remain within its multi-year range of 3% to 5%, with a balanced focus on volume and price. The company also anticipates a modest improvement in underlying operating margin, driven by gross margin expansion through higher productivity and a return to more normal levels of net material inflation.
Unilever’s strong performance in FY23 reflects its ability to navigate market challenges and deliver sustainable growth. With a focus on innovation, cost optimization, and portfolio management, the company is well-positioned to continue its success in the consumer goods industry.
As of the last check on Thursday, Unilever’s shares (UL) were up by 3.39% in premarket trading, reaching $50.56.
(Photo via Wikimedia Commons)
