Unilever sees sales rise to €60.8bn in 2024 despite restructuring costs

Unilever PLC delivered a solid financial performance in 2024, with underlying sales growth reaching 4.2%, driven primarily by volume increases of 2.9% and a 1.3% price uplift. Despite a challenging global economic landscape, the company’s turnover grew by 1.9% to €60.8 billion, reflecting its ability to navigate currency headwinds and strategic divestments while maintaining market competitiveness.

The company’s Power Brands, which contribute over 75% of total sales, led the expansion with a 5.3% increase in underlying sales. Notable performances came from Dove, Comfort, Vaseline, and Liquid I.V., which benefited from targeted product innovation and brand investment reaching 15.5% of turnover, its highest level in more than a decade.

In terms of business segments, Beauty & Wellbeing posted the highest growth at 6.5%, followed by Personal Care at 5.2% and Home Care at 2.9%. The company’s Foods division expanded by 2.6%, while Ice Cream sales rose by 3.7% as the segment prepared for its planned separation.

What drove Unilever’s improved operating profit margin?

Unilever’s operating profit margin increased to 18.4%, up 170 basis points from the previous year, reflecting efficiency gains, cost control measures, and gross margin expansion. The gross margin rose by 280 basis points, the highest in a decade, supported by productivity initiatives, premiumisation, and strong brand investments.

Despite strong operational improvements, net profit declined by 10.8% to €6.4 billion, primarily due to higher restructuring costs and losses on disposals. Unilever’s diluted earnings per share (EPS) fell by 10.6% to €2.29, while underlying EPS climbed 14.7% to €2.98, reflecting the company’s core business strength.

Free cash flow remained robust at €6.9 billion, with a cash conversion rate of 106%, demonstrating Unilever’s strong liquidity position. The company also announced a new €1.5 billion share buyback, following the completion of an earlier repurchase programme.

How is Unilever reshaping its brand portfolio for long-term growth?

Unilever has taken decisive steps to refine its brand portfolio, focusing on higher-margin, premium segments while divesting non-core businesses. The company completed the acquisition of K18, a premium biotech hair care brand, and signed an agreement to acquire Minimalist, an actives-led beauty brand in India. These moves align with Unilever’s broader strategy of targeting high-growth and premium categories.

At the same time, Unilever exited certain lower-growth segments, including the sale of its Russian subsidiary, Elida Beauty, and water purification businesses in China, Asia, and Mexico. Additionally, the company announced plans to divest Foods brands Unox and Conimex, shifting its focus towards cooking aids and condiments.

What is the latest on Unilever’s Ice Cream separation?

Unilever confirmed that the Ice Cream separation remains on track, with plans for a demerger by the end of 2025. The business will be listed in Amsterdam, London, and New York, mirroring Unilever’s existing trading structure. The company has appointed Jean-Francois van Boxmeer as Chair Designate, bringing experience from his leadership roles at Vodafone and Heineken.

The separation is expected to unlock value and provide Ice Cream with the flexibility to grow independently. The division, which includes brands such as Magnum and Ben & Jerry’s, has been optimizing its supply chain and go-to-market strategies, achieving a 4.3% sales increase in Q4 2024.

What challenges and opportunities lie ahead for Unilever in 2025?

Unilever CEO Hein Schumacher noted that market growth slowed throughout 2024 and is expected to remain subdued in the first half of 2025. However, the company remains confident in achieving underlying sales growth within its 3%-5% multi-year range, with a balanced mix of volume and price increases.

Unilever is implementing transformational changes in key markets such as Indonesia and China, where go-to-market strategies are being revamped to drive future growth. The GAP2030 strategy, launched in 2024, is expected to strengthen brand positioning and enhance innovation pipelines.

Despite near-term challenges, Unilever’s investment in premium segments, productivity improvements, and strategic brand focus positions it for sustained long-term growth. With its reshaped portfolio and focus on operational efficiency, the company is well-prepared to capitalize on emerging opportunities in 2025 and beyond.