Unilever has warned that prices for consumer products will continue to rise further this year after publishing its full year results for 2022.
The maker of Ben & Jerry’s ice cream and Marmite revealed an underlying sales growth of 9%, with prices increasing by 11.3% and volumes declining 2.1%.
Additionally, operating profit for the UK manufacturer broadly fell flat at £8.6 billion with profit margins declining as a result of cost pressures.
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Unilever expects 2023 underlying sales growth to be at least in the upper half of the multi-year range of 3 – 5%, but with only a modest improvement in operating margins due to continued costs amid inflation and a cost-of-living crisis.
Facing further pressure on margins and costs, the consumer goods company raised prices by 13.3% in the final three months of 2022.
New CEO, Hein Schumacher due to take the reins on 1 July 2023.
“A solid end to a tumultuous three years for departing CEO Alan Jope. All eyes now turn to successor, Hein Schumacher’s plans for the under-performing consumer juggernaut,” head of equities at Wealth Club, Charlie Huggins said.
“Shareholders will be hoping for revolution not evolution. The fact Unilever’s Board has opted for an external hire suggests they are likely to get their wish.
“The situation facing Schumacher is a bit like an experienced manager who takes over an under-performing football team flirting with the relegation zone, when it should be contending for European places.
“There is little wrong with Unilever on the surface. It has good brands and a great footprint in emerging markets. The problem has been execution and getting the best out of the assets it owns.
“Several problems could probably be solved by stopping doing things, rather than seeking to do more. Stop acquiring, stop shackling employees with bureaucracy, stop making empty promises and stop the corporate gobbledygook. Instead, focus on the basics, simplify, and inject some much-needed dynamism.
“Easier said than done of course, especially for a business Unilever’s size. But there is a potential solution to that problem – disposals. The new CEO is bound to take a long hard look at Unilever’s portfolio. He may decide that over 400 brands is too many, especially since 13 account for about half of total sales.”
The news comes as a recycling scheme by FMCG giants including Nestlé, Unilever, Mars, Mondelez and PepsiCo has been hindered due to financial cost pressures on local authorities.
