Unilever widened its gross margin by 280 basis points as underlying sales rose 4.2% for the year, driven by stronger volumes and demand in emerging markets. Volumes were up about 2.9%, the group said, with Power Brands and home and beauty categories leading the improvement. First-quarter underlying sales also grew, helped by personal-care lines. The company expects full-year 2025 underlying sales to be 3% to 5% and sees margin gains returning in the second half.

Unilever posted a clear sales recovery driven by higher volumes and wider margins. The group said underlying sales rose 4.2% for the year, with volumes up 2.9% and price contributing about 1.3 percentage points. Gross margin expanded by 280 basis points, a swing that helped fund extra brand investment and lift profitability.

Results in detail

The full-year figures show two linked trends. Volumes rose across Unilever's business groups. That followed a focused set of innovations and heavier investment behind core brands. The company singled out Dove, Comfort, Vaseline and Liquid I.V. Among the Power Brands that drove volume gains.

Unilever's statement noted the group delivered volume growth above 2% in each quarter. That consistency matters. It suggests the recovery was not a single-quarter spike. The volume strength underpinned the 4.2% underlying sales gain the firm reported.

On margins, Unilever said gross margin widened by 280 basis points. That margin expansion created headroom for more brand spending while boosting operating profit. The firm flagged an underlying operating margin of 18.4% for 2024 and said it expects a modest improvement in 2025, with most of the benefit coming in the second half. The company pointed to a very strong first-half 2024 comparator of 19.6% that will weigh on early-year comparisons.

Where growth came from

The company linked its better performance to demand in emerging markets and to pick-up in home-care and beauty categories. Unilever said consumers bought more of its household and personal-care products. That lifted volumes in markets where everyday goods are a regular part of spending.

The result was higher sales without relying solely on price increases.

Mastheads

Unilever also credited a smaller, sharper product slate. The Growth Action Plan moved the group to do fewer things but do them better. Management said it focused resources on scalable brands and premium segments, and that approach helped drive consistent volume growth.

Acquisitions and divestments were part of the shift. Unilever said it bought scalable brands such as K18 and Minimalist to strengthen its premium personal-care portfolio. It also announced moves to exit some local food brands, naming examples such as Unox and Conimex, as it refocuses foods on cooking aids and condiments.

Restructuring and business changes

The company is pushing a productivity programme it announced in March. Management said the programme is being implemented rapidly and is ahead of plan. The aim is a leaner, more accountable organisation. Unilever highlighted decisive actions in Indonesia where it said long-running problems required a reset, and in China where it's changing its go-to-market approach during a market slowdown.

Separately, the firm said the separation of its Ice Cream business is on track. It named a Chair Designate for the demerged Ice Cream business and provided details of the planned listing structure. The earlier spin-off of ice cream was described as part of a broader reshaping of the group. The company also announced plans to hive off its food division in a merger with a US spice maker, a move that follows the ice cream separation and further narrows Unilever's focus toward beauty and personal care.

Quarterly performance and market reaction

For the three months to March, Unilever reported underlying sales growth of 3.8%, beating an analyst consensus that had been lower. Underlying volume growth for that quarter was about 2.9%, again ahead of expectations. The group said early-year market growth is subdued, but that price increases expected in 2025 should help sales later in the year.

Executives highlighted the role of Power Brands and focused innovation in delivering steady volume gains. In a company statement, Fernando Fernandez, chief executive, said: "We have started the year well with volume-led growth driven by our Power Brands and a positive performance across all Business Groups." Fernandez framed the early momentum as a sign the company's strategic changes are working.

In a separate press release, Hein Schumacher, chief executive, described the year as one of "significant activity" under the Growth Action Plan and said the firm had executed the plan at pace. Schumacher said the steps taken in 2024, including refreshed strategy and reinvestment in brands, left Unilever better positioned for its ambitions.

Unilever set an expectation for full-year 2025 underlying sales growth to fall within a multi-year range of 3% to 5%. The company warned that market growth slowed through 2024 and that the first half of 2025 is likely to be quiet. Management said it expects improvement as the year progresses, driven in part by price moves that reflect higher commodity costs.

The group said it anticipates a more balanced split between volume and price in 2025, and it expects a modest improvement in underlying operating margin for the full year. But it also said margin gains will be weighted to the second half because of the strong first-half 2024 comparator and the carry-over effects of earlier pricing and input-cost deflation.

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Unilever expects full-year 2025 underlying sales growth of 3% to 5% and said margin gains will be weighted to the second half of the year.

This article was created with AI assistance.