Unilever announces 2023 results: Navigating market dynamics with growth action plan

Unilever PLC, a global leader in consumer goods, has disclosed its financial outcomes for the full year of 2023, spotlighting a strategic focus on its Growth Action Plan and operational efficiencies amidst challenging market conditions. The company reported an underlying sales growth (USG) of 7.0%, with a turnover of €59.6 billion, reflecting a slight decrease of 0.8% compared to the previous year. Despite the turnover dip, Unilever demonstrated resilience with an underlying operating profit of €9.9 billion, marking a 2.6% increase, and a strong free cash flow of €7.1 billion, up €1.9 billion from the prior year.

Unilever’s financial performance varied across its diverse portfolio, with the Beauty & Wellbeing and Personal Care segments showing notable increases of 8.3% and 8.9% in USG, respectively. Conversely, the Home Care and Nutrition segments encountered challenges, with Home Care experiencing a 1.8% decrease in turnover and Nutrition a 5.0% drop. Ice Cream, however, managed a modest growth of 2.3%.

The underlying operating margin improved by 60 basis points to 16.7%, with the company attributing the growth to a gross margin increase of 200 basis points over the year. Furthermore, Unilever plans to initiate a new €1.5 billion share buyback in the second quarter as part of its ongoing commitment to shareholder returns.

Unilever’s CEO, Hein Schumacher, emphasized the company’s dedication to executing its Growth Action Plan, which aims to enhance quality growth, productivity, and operational simplicity. The plan focuses on investing in 30 Power Brands, which account for approximately 75% of turnover and saw an underlying sales increase of 8.6% in 2023. Schumacher acknowledged the need for improved competitiveness and execution to unlock Unilever’s full potential, stating, “We are at the early stages of this work and there is much to do, but we are moving with speed and urgency to transform Unilever into a consistently higher-performing business.”

Looking ahead to 2024, Unilever anticipates underlying sales growth to be within its multi-year range of 3% to 5%, with a more balanced contribution from volume and price. The company also expects a modest improvement in its underlying operating margin, driven by gross margin expansion and a return to more normal levels of net material inflation.