Consumer products conglomerate Unilever on Thursday said fourth-quarter underlying sales grew 4.9% and announced a €3bn share buyback, as it warned of the continuing impact of cost inflation and the Covid-19 pandemic.
In the first results since its failed bid for GlaxoSmithKline’s consumer health business, the Magnum ice-cream maker said it expected underlying sales growth in 2022 to be 4.5% – 6.5%. Pricing would continue to be strong, with some impact on volume as a result.
The company also said it had shelved plans for any major acquisitions “in the foreseeable future” after receiving “a strong message that the evolution of our portfolio needs to be measured” from shareholders. Unilever made three offers for GSK’s consumer arm and has been under pressure to simplify its structure.
Underlying operating margin for 2022 was expected fall by 140 – 240 basis points to 16% – 17%, with the main impact on the first half.
“We expect margin to be restored after 2022, with the bulk coming back in 2023 and the rest in 2024,” Unilever said, adding that it expected high input cost inflation in the first half of more than €2bn.
“This may moderate in the second half to around €1.5bn, although there is currently a wide range for this that reflects market uncertainty on the outlook for commodity, freight and packaging costs.”
The London-listed company posted full-year turnover of €52.4bn, up 3.4%, and compared with estimates of €52.11bn, according to its own compiled consensus.
Underlying operating profit also beat expectations, rising 2.9% to €9.6bn, while net profit was up 9% to €6.6bn and higher than consensus of €5.79bn.
Unilever said its share buyback would start in the first quarter and run over two years.
