Unilever PLC (LSE: ULVR) has delivered a 3.9 percent underlying sales growth for the third quarter of 2025, powered by balanced contributions from volume and price. With volume growth at 1.5 percent and price at 2.4 percent, the British consumer goods major showed renewed momentum across its core categories, while reiterating plans to complete the demerger of its Ice Cream business by the end of 2025. The market responded with cautious optimism as shares of Unilever PLC closed at GBX 4,685.00 on October 23, 2025, up 0.69 percent for the day.
This update comes at a pivotal time for the FTSE 100-listed multinational, as it looks to structurally transform its business into a higher-margin, brand-led consumer portfolio with less complexity. With the Ice Cream unit being spun off as The Magnum Ice Cream Company, investors are watching closely to assess whether Unilever PLC can execute a cleaner brand architecture and capital allocation strategy to drive sustainable margin expansion.
What are the key growth drivers behind Unilever PLC’s Q3 2025 results across business segments?
Unilever PLC reported total turnover of €14.7 billion in the third quarter, representing a decline of 3.5 percent year-on-year on a reported basis. However, this figure was significantly affected by currency headwinds, which shaved 6.1 percent off the top line, and net disposals of 1.0 percent. On an underlying basis, the company delivered robust 3.9 percent growth, building on the sequential momentum seen in the second quarter, which came in at 3.1 percent. Excluding Ice Cream, underlying sales growth improved to 4.0 percent, supported by 1.7 percent volume and 2.2 percent price growth.
The Beauty & Wellbeing division led performance with 5.1 percent underlying sales growth. Brands such as Dove Hair, Vaseline, Nutrafol, Liquid I.V., Hourglass, and K18 delivered double-digit increases, particularly within premium and prestige product lines. Vaseline’s Cloud Soft Light Moisturiser and Dove’s fiber-repair haircare technology range helped position the group favorably in high-growth beauty segments. Liquid I.V.’s sugar-free hydration products now account for nearly 30 percent of its sales and continue to penetrate new households in North America.
Personal Care delivered 4.1 percent underlying sales growth, with 1.0 percent volume and 3.1 percent price increase. Dove led the segment again, with mid-single-digit growth driven by premium innovations in deodorants and body wash formats. The division saw solid traction in North America and the Asia Pacific Africa region, while Latin America lagged, impacted by volatile volumes despite Unilever PLC maintaining market share. Lifebuoy and Pepsodent also contributed to overall category resilience.
Home Care posted 3.1 percent underlying sales growth, with a strong 2.5 percent volume contribution. Growth was supported by key brands like Cif and Domestos, both of which posted double-digit performance. Cif Infinite Clean, a probiotic-powered multi-surface cleaner, continued its successful European rollout, while Comfort fabric enhancers delivered high-single-digit volume-led growth. Fabric cleaning remained flat as pricing resets in Brazil offset gains in Europe, where Wonder Wash continues to scale up.
In Foods, the company reported 3.4 percent underlying sales growth, with Hellmann’s showing strong mid-single-digit expansion. Its flavored mayonnaise range, particularly in Brazil, delivered double-digit growth. Cooking aids and Knorr contributed positively, especially in North America and Indonesia, aided by campaigns such as Knorr’s Unlimited Time Menu. Unilever Food Solutions grew modestly, aided by low-single-digit growth in China and the United States.
Ice Cream, which is in the final stages of structural separation, posted 3.7 percent growth entirely driven by price. In-home consumption rose modestly while out-of-home products, particularly Cornetto, led with high-single-digit gains. Ben & Jerry’s continued to perform well, boosted by innovation in dairy and non-dairy formats and the Scoopapalooza mega pint format in the United States. Magnum and Wall’s posted stable performance against a strong prior year.
What is the rationale and market implication behind the Ice Cream demerger and share consolidation?
The demerger of the Ice Cream business, to be known as The Magnum Ice Cream Company (TMICC), is a key strategic milestone for Unilever PLC in 2025. The spin-off is designed to simplify Unilever PLC’s operating model, eliminate operational overlap, and focus management resources on higher-margin, scalable categories like Beauty & Wellbeing and Personal Care.
Qualifying shareholders will receive one TMICC share for every five shares held in Unilever PLC, with the same ratio applying to American Depositary Receipt holders. Unilever PLC will retain a 19.9 percent stake in TMICC for up to five years, which it intends to monetize gradually to offset separation costs and improve net leverage.
The company will also implement a share consolidation post-demerger to ensure that key metrics like earnings per share and dividend per share remain comparable pre- and post-transaction. This technical adjustment has been approved by shareholders and is expected to take effect as soon as TMICC shares begin trading.
Unilever PLC management reiterated that the demerger is progressing well, despite timeline adjustments caused by the ongoing U.S. federal government shutdown. All preparatory work remains on track, and the Ice Cream unit is already operating as a standalone company within the group.
How did Unilever PLC perform across global geographies in the third quarter?
Regionally, Unilever PLC delivered its strongest growth in the Asia Pacific Africa segment, where underlying sales increased by 6.8 percent. Volume growth contributed 3.5 percent, with price up 3.1 percent. Indonesia posted an impressive 12.7 percent growth following an extensive business reset, while India saw slower growth of 2 percent due to transitional Goods and Services Tax reforms impacting approximately 40 percent of Unilever’s Indian operations. These reforms are expected to normalize from November 2025 and support long-term demand expansion.
In North America, the company posted a solid 5.5 percent growth, almost entirely driven by volume at 5.4 percent. This performance was anchored by Personal Care and Wellbeing brands, with continued strong adoption of new deodorant formats and hydration wellness products. Foods posted low-single-digit gains.
Europe saw muted 1.1 percent growth, as volume declined by 0.6 percent despite a 1.7 percent pricing contribution. The region faced tough comparators, with the United Kingdom and France managing to expand, while Germany contracted due to high base effects from 2024.
Latin America remained a weak spot, declining 2.5 percent as macroeconomic volatility affected volumes, especially in Brazil, Mexico, and Argentina. In Brazil, pricing interventions are ongoing to restore competitiveness, while Mexico experienced high-single-digit declines amid weak consumption.
What is the institutional outlook for Unilever PLC and its dividend strategy?
Unilever PLC’s performance in the third quarter has been met with cautious optimism by institutional investors. The reaffirmation of the 2025 full-year outlook—targeting underlying sales growth between 3 percent and 5 percent, and operating margins of at least 18.5 percent (or 19.5 percent excluding Ice Cream)—has offered a degree of visibility going into the final quarter.
The company declared a Q3 interim dividend of €0.4528 per share, up 3 percent from the same quarter last year. In British pounds, this equates to £0.3928, while American Depositary Receipt holders will receive USD 0.5258. These payouts are expected to continue uninterrupted for Q4 2025, even after the demerger, offering income stability for long-term investors.
Productivity initiatives are ahead of plan, with €650 million in cost savings expected to be delivered in 2025 and a further €150 million scheduled for 2026. Restructuring costs have been revised downward and are now forecast at just 1.2 percent of turnover, underscoring the management’s capital discipline.
What are the key risks, watchpoints, and catalysts for Unilever PLC heading into FY26?
The fourth quarter will be pivotal in assessing whether Unilever PLC can sustain volume-led growth in emerging markets and complete the Ice Cream demerger within the revised timeline. India’s tax normalization and further traction in China and Indonesia are critical markers. Currency depreciation, particularly in developing economies, remains a substantial external risk and was already responsible for a 6.1 percent decline in reported turnover for the quarter.
A significant forward catalyst will be the February 12, 2026 announcement of full-year results, which will include the company’s first report with the Ice Cream business treated as a discontinued operation. At that point, investors and analysts will be in a better position to reassess Unilever PLC’s margin profile, free cash flow dynamics, and capital return strategy in a post-demerger environment.
While structural and operational tailwinds are building, the true test lies in Unilever PLC’s ability to translate its simplified brand architecture and category focus into superior shareholder returns over the medium term.
Key takeaways from Unilever PLC’s Q3 2025 results and Ice Cream demerger update
- Unilever PLC reported 3.9% underlying sales growth in Q3 2025, with 1.5% volume and 2.4% price contribution
- Beauty & Wellbeing led with 5.1% growth, driven by Vaseline, Dove Hair, Nutrafol, and Liquid I.V.
- Personal Care grew 4.1% on the back of premium deodorants and skin cleansing innovations
- Ice Cream unit posted 3.7% growth via price; volumes remained flat
- Total reported turnover fell 3.5% due to 6.1% FX headwinds and 1.6% disposals
- Ice Cream demerger on track for Q4 2025; TMICC share distribution ratio confirmed at 1:5
- Unilever PLC to retain 19.9% stake in TMICC post-demerger for up to five years
- Asia Pacific Africa delivered 6.8% growth, with Indonesia up 12.7% and India impacted by GST transition
- North America grew 5.5% volume-led; Latin America declined 2.5%
- Dividend raised 3% YoY to €0.4528 per share, with Q4 dividend payment confirmed
- Full-year outlook reaffirmed with 3–5% growth target and margin guidance of ≥18.5% (≥19.5% ex-Ice Cream)
- €650M in productivity savings expected by year-end; restructuring costs lowered to 1.2% of turnover
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