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Marmite and Dove-maker Unilever to raise prices as inflationary pressures build – business live | Business

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Under-pressure Unilever has ruled out making major takeovers any time soon, and announced a new share buyback up to €3bn, to placate shareholders alarmed by its botched attempt to buy GlaxoSmithKline’s consumer healthcare arm.

The firm behind Marmite, Dove soap, Hellmann’s mayonnaise and Ben & Jerry’s ice-cream told shareholders that it has got the message that it must take a ‘measured’ approach.

Reporting its final results for last year, Alan JopeUnilever’s chief executive officer, says:


We have engaged extensively with our shareholders in recent weeks and received a strong message that the evolution of our portfolio needs to be measured.

We therefore do not intend to pursue major acquisitions in the foreseeable future and will conduct a share buyback program of up to €3 billion over the next two years.”

Unilever, which has faced pressure to improve its performance, has also reported its fastest underlying sales growth for nine years – up 4.5% for the full year.

Of that, 1.6% came from volume growth, with prices hiked by 2.9% as Unilever passed on rising costs to customers.

Jope says that inflationary pressures were the main challenge of last year, leading to an acceleration of price rises at the end of last year.


The major challenge of 2021 has been the dramatic rise of input costs.

We responded with pricing actions, delivering underlying price growth of 2.9% for the year, accelerating to 4.9% in the fourth quarter, with full year underlying operating margin down 10bps and underlying earnings per share up 5.5%.

Unilever expects underlying sales growth to rise this year, to a range of 4.5% to 6.5%.

Julianna Tatelbaum
(@CNBCJulianna)

#Unilever results: Underlying sales growth of +4.9% in Q4, beating expectations of +3.8%.

Outlook: 4.5%-6.5% underlying sales growth in 2022 due to strong pricing with some negative impact on volume as a result.

Share buyback announced, M&A off the table.

Enough?

February 10, 2022

Ashley Armstrong
(@AArmstrong_says)

Jope may be boosted by better than expected Unilever numbers this morning. Fastest USG in nine years during Q4: 4.9% rise vs consensus of 3.8%, helped by 2.9% of price increases. Operating margin at 18.4% Announcing further €3bn share buyback which should relieve M&A concerns

February 10, 2022

Last month Unilever announced it would reorganize around five areas: beauty & wellbeing, personal care, home care, nutrition and ice-cream, with 1,500 jobs being cut.

Activist investor Nelson Peltz has recently built a stake in the troubled FTSE 100 company, and will be pushing for change.

Jope has also received a much-needed show of support from one of Unilever’s largest shareholders, over the attempt to buy GSK’s healthcare brands for £50bn.

Top fund manager Nick Train of Lindsell Train suggested the widespread attacks on him were “unfair”, The Times reports this morning:


“We would have been a lot more disappointed if it [Unilever] had not considered making the acquisition,” he said at Finsbury’s annual meeting.

“That is a rational asset for Unilever to aspire to own. Whether it is practical at this juncture is another matter.”

Ashley Armstrong
(@AArmstrong_says)

As we wait for Unilever results this morning – Lindsell Train, 4th biggest shareholder, has come out saying boss Jope was right to look at Glaxo deal. But admits timing might have been off after year to forget https://t.co/VqWuNFczAR

February 10, 2022

The agenda

  • 8am GMT: China’s new yuan loans data for January
  • 9.30am GMT: ONS publishes latest data on the pandemic’s impact on the UK economy
  • 1.30pm GMT: US inflation report for January
  • 5pm GMT: Bank of England governor Andrew Bailey’s speech at TheCityUK Annual Dinner to be published

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