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, which WholeFoods previously 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.”