Unilever sales set to grow as turnaround plan shows results

Unilever is poised for sales growth in its third quarter as the consumer goods group progresses with a turnaround plan under its new boss.
The maker of Marmite and Dove soap is forecast to deliver underlying sales growth of 4.2 per cent in the latest three months, up from 3.9 per cent growth in the prior quarter, according to consensus estimates.
The London-listed consumer group also is expected to show a slight improvement in volume growth when it updates the market this week: up 3.2 per cent, compared with a 2.9 per cent rise in the second quarter.
Investors and industry observers will be closely monitoring Unilever’s market share movements, which have suffered over the past year as shoppers traded down to cheaper supermarket own-labels as the cost of living soared.
“Competitiveness remains our major concern: it has not improved over the last six months” despite volume growth in the second quarter, analysts at RBC said.
They said Unilever’s “statement that ‘we expect a sequential improvement of the share trend over time’ is relatively cautious, in our view, although with the marketing increase we acknowledge that Unilever is making the right moves”.
Unilever, which has a stock market value of £120 billion, is one of the world’s biggest consumer goods groups. Its products include Dove deodorant, Lipton tea, Hellmann’s mayonnaise and Knorr stock cubes. Despite its impressive brand line-up, the company has struggled to boost sales and its share price has trailed behind sector peers such as Nestlé and Procter & Gamble in recent years.
The company brought on board Hein Schumacher, a restructuring expert, last year as its new chief executive, replacing Alan Jope, to oversee a turnaround of the business. He had been scouted by Nelson Peltz, the billionaire activist investor whose firm has a stake in Unilever.
Schumacher, the former boss of FrieslandCampina, drew up a “growth action plan” that aims to maximise shareholder returns and to improve the company’s below-par performance. The plan, announced in October last year, focuses on its “power” brands: 30 of Unilever’s 400-plus labels that represent 70 per cent of its turnover. They comprise 14 brands with €1 billion or more in revenue, including Dove, Sure and Persil.
As part of his strategy, the company also plans to spin off its ice cream unit, which includes Ben & Jerry’s, Wall’s and Cornetto and which makes about €8 billion in annual sales, into a separate business.
Schumacher said that a demerger of the ice cream division was the “most likely route” and could include a separate listing, prompting speculation about whether it would float the division in London or in the Netherlands.
Another major change for the business under Schumacher’s leadership has been the sale of its Russian subsidiary to a local manufacturing group for a reported €520 million, almost three years after calls began for it to ditch its operations in the country after the invasion of Ukraine.
The consumer goods group, which has been branded a “sponsor of war” for not exiting Russia sooner, said last week that it had reached an agreement to sell Unilever Rus to Arnest, a Russian manufacturer of cosmetics, perfumes, and household products.
In July, Schumacher hailed the “first signs of success” of his turnaround plan after it increased its profitability in the first half of the year. He said the business had made “great progress” towards boosting its sales and growth margins.
As Unilever continues to navigate this period of significant change, the forthcoming trading update will be pivotal in elucidating how it plans to thrive in its newly streamlined form.
Investors and industry observers will be keenly watching for strategic insights and future projections as Unilever seeks to reaffirm its market position and chart a course for sustainable growth in an increasingly competitive landscape.
Unilever declined to comment.