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Unilever Reports Better-Than-Feared Net Profit Drop for 2023

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4.5

Andrew R. Michaud

• February 08, 2024

Unilever, the Anglo-Dutch retailer known for consumer brands like Ben & Jerry's ice cream and Dove soap, has announced a net profit drop for 2023 that surpasses market expectations. Despite a decline in turnover during the fourth quarter, the company has also introduced a share buyback program.

Net Profit and Turnover Figures

For the year, Unilever reported a net profit of €6.49 billion ($6.99 billion), compared to €7.64 billion in 2022. This figure, based on estimates from 11 analysts and FactSet data, exceeds the consensus of €6.23 billion. Turnover for the year decreased to €59.6 billion from €60.07 billion in the previous year, primarily due to currency headwinds and net disposals. The company's own consensus projected a turnover of €60.04 billion. In line with expectations, the fourth-quarter turnover dropped by 3% to €14.2 billion, slightly below the consensus of €14.28 billion.

Strong Underlying Sales Growth

Despite the challenges faced in the year 2023, Unilever experienced accelerated underlying sales growth of 7.0%. This growth was driven by a 6.8% increase in prices and a 0.2% increase in volumes. Analysts had anticipated a sales growth rate of 7.1% solely attributed to pricing, while volumes were expected to remain flat.

Unilever's resilient performance amid a challenging market landscape demonstrates its ability to navigate headwinds and maintain steady growth. With the introduction of a share buyback program, the company aims to enhance shareholder value and further solidify its position as a global leader in consumer goods.

Retailer: Unilever

Net Profit (2023): €6.49 billion

Turnover (2023): €59.6 billion

Underlying Sales Growth: 7.0%

Unilever Reports Strong Financial Performance for 2024

Unilever, one of the leading global consumer goods companies, has announced its financial results for the full year of 2024. The company's preferred metric, underlying operating profit, showed a significant increase, reaching EUR9.9 billion compared to EUR9.68 billion in the previous year. This surpassed the consensus estimate of EUR9.88 billion.

To demonstrate its commitment to shareholders, Unilever has also announced a share buyback program worth EUR1.5 billion, scheduled to commence in the second quarter of this year.

In terms of dividends, the board has declared a fourth-quarter dividend of EUR0.4268, maintaining the same level as the previous year.

Unilever's CEO, Hein Schumacher, expressed his satisfaction with the company's financial performance but acknowledged the need to improve its competitiveness and overall performance. Schumacher emphasized the importance of enhancing execution to unlock Unilever's full potential.

Looking ahead, Unilever expects a solid underlying sales growth for 2024, forecasting a range of 3% to 5%. The company aims to achieve a better balance between volume and price, which is expected to contribute to a modest improvement in underlying operating margin for the full year. Unilever plans to achieve this through an expansion of gross margin, driven by increased productivity and normalization of net material inflation levels.

Unilever's strong financial results reflect its ongoing efforts to deliver value to its shareholders and position itself as a leader in the consumer goods industry.