PARIS – Unilever’s underlying sales growth picked up pace in the third quarter of 2022, spurred by further pricing increases with a limited impact to volume, causing the group to raise its guidance for the full year.
The maker of brands ranging from Dove and Tatcha to Ben & Jerry’s and Magnum generated sales of 15.8 billion euros in the three months ended Sept. 30, up 10.6 percent on an organic basis and 17.8 percent in reported terms versus the same prior-year period.
The organic sales growth was spread across all business groups in the period, Unilever said.
“Price growth has sequentially improved in each of the past seven quarters, reaching 12.5 percent in the third quarter,” the group said in a statement released Thursday morning.
Gains in each of Unilever’s five business units were led by the performance of the company’s billion-euro brands, which together grew sales by 14 percent.
Unilever’s Beauty and Wellbeing division’s sales gained 6.7 percent, bolstered by price, but with a slightly negative volume effect driven by skin care and hair care. The Personal Care division’s sales rose 8.9 percent organically.
The group’s Home Care, Nutrition and Ice Cream divisions all notched up double-digit gains.
“Unilever has delivered another quarter of growth in challenging microeconomic conditions,” Alan Jope, chief executive officer of Unilever, said in the statement.
He explained the underlying sales growth was “led by further increases in pricing with only a limited impact on volume, and we now expect underlying sales growth for the full-year 2022 to be above 8 percent.”
Also for later this year, Unilever expects there to be a higher level of negative organic volume growth than in the first nine months of 2022.
Group sales in that period reached 45.6 billion euros, an 8.9 percent increase in organic terms and a 10.7 percent gain on a reported basis.
The company further anticipates net material inflation, or NMI, this year to remain unchanged at approximately 4.5 billion euros in the second half.
“Although some commodities have softened from their peaks, we expect cost pressure to carry forward into 2023, driven by currency devaluation, higher raw material costs versus beneficial covers in the first half of 2022, and higher supplier processing costs from energy and labor inflation,” said Unilever.
Therefore, the company’s estimate for NMI in the first half of 2023 versus first-half 2022 is approximately 2 billion euros, “with a range of possible outcomes.”
“The global macroeconomic outlook remains mixed, and we expect the challenges of high inflation to persist in 2023,” said Jope.
Source: WWD