Marmite maker hails a solid start to the year 

Unilever, the maker of Ben & Jerry’s ice cream and Marmite, has announced its first quarter results with nderlying sales growth of 4.4%% with prices and volumes both increasing by 2.2%.

Unilever’s Power Brands grew by 6.1% and the full-year outlook was unchanged.

Unilever is guiding for underlying sales growth of 3 to 5% in FY24, with modest operating margin improvement.

Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club, said, “Unilever has got off to a solid start in 2024 with volume growth improving to 2.2%. As a result, it has reiterated its full year guidance.

However, Unilever should be performing better. Hein Schumacher’s ‘Action Plan’ is designed to reinvigorate performance through more impactful innovation, productivity savings and an improved culture, with an enhanced focus on the top 30 Power Brands.

While it is early days, there are already promising signs. The Power Brands are out-performing the rest of the portfolio, growing volumes by 3.8% in the first quarter. A greater focus on these seems eminently sensible. Meanwhile, the recently announced separation of the ice cream business shows Unilever’s CEO is willing to take bold steps to turn the company around, which is what Unilever desperately needs.

Ice cream is a lower margin business and has struggled recently, losing share to competitors. Separating out the ice cream business will simplify the group and free up resources to invest behind the biggest brands. It is all part of the new CEO’s master plan of doing “fewer things, better and with greater impact”.

Unilever will need more than portfolio change to deliver on its potential – cost of living challenges mean private label brands have never been more appealing. Nevertheless, the ‘Action Plan’ has got off to a good start and it finally feels like Unilever is moving in a positive direction.”