Unilever FY 2021 Results Show Fastest Sales Growth in 9 Years

Unilever has announced its full year results for 2021, according to a press release. Highlights include:

Fastest underlying sales growth in nine years – 4.5%, with 2.9% price and 1.6% volume
Turnover increased 3.4%, with a positive impact from acquisitions and a negative impact from currency
Underlying operating profit increased 2.9% and underlying operating margin decreased by 10bps
Underlying earnings per share increased 5.5% and diluted earnings per share 9.2%
Announced the sale of Tea business for €4.5 billion, with completion expected in H2 2022
Completed €3 billion of share buybacks in 2021; announcing further €3 billion programme for 2022-2023
Dividend per share growth of 3% for 2021

Unilever also announced a new organizational structure, whichWholeFoodspreviously reported on here.

Looking ahead to 2022, Unilever is expecting:

Underlying sales growth in the range of 4.5% to 6.5%
High input cost inflation in the first half of over €2 billion
Around €600 million of cost savings over two years due to the new organizational structure
2022 underlying operating margin is expected to be down by between 140bps and 240bps, so maintained between 16% and 17%, with the first half impacted more than the second half

The Board has approved a share buyback program of up to €3 billion to be conducted over the next two years

Looking at individual segments:

In the US growth has returned to competitive levels, with strong contributions from Prestige Beauty, functional nutrition and food solutions.
India grew double-digit with balanced volume and price and strong actions on savings and mix.
China grew double-digit, led by volume, with growth broad-based across categories and channels, especially e-commerce.
Latin America grew high single-digit led by price with flat volume in a high inflation market.
SouthEast Asia declined following tough Covid-19 related restrictions throughout the year and weak competitive performance in Indonesia.
Europe grew slightly from both price and volume.
Foods and Refreshment grew fastest in 2021 with 5.6% underlying sales growth with food solutions and out-of-home ice cream partially recovering from channel restrictions in 2020.
Prestige Beauty delivered strong double-digit growth across all brands as channels reopened, with e-commerce a big contributor. Functional nutrition grew double-digit across the portfolio of brands.
E-commerce growth was 44% and now represents 13% of Unilever’s turnover.

CEO Alan Jope made the following statement:

“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%.

“We are focused on driving faster growth from our strong portfolio of brands and markets, and recently announced a major change to create a simpler, more category-focused organisation designed to further improve performance. In 2022, we will manage a significant input cost inflation cycle and will continue to invest competitively in marketing, R&D and capital expenditure.

“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.”