TOP NEWS: Unilever sees cost pressures mount but backs margin outlook

(Alliance News) - Consumer goods maker Unilever PLC on Thursday reported a slowdown in underlying ...

Alliance News 21 October, 2021 | 9:09AM
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(Alliance News) - Consumer goods maker Unilever PLC on Thursday reported a slowdown in underlying sales growth but retained its full-year guidance.

Unilever shares were trading 1.7% higher in London on Thursday at 3,882.50 pence each, the top performer in the FTSE 100 early Thursday.

Underlying sales growth in the three months to September 30 was 2.5% on a year ago, slowing from the 5.0% achieved in the second quarter. The year-to-date figure was 4.4%, moderating after first-half growth of 5.4%.

Unilever warned that the operating environment across its markets remained volatile, and restrictions on daily life continued around the world, hurting channel dynamics, sales mix and consumer behaviour.

More positively, the London-based company said turnover increased 4.0% to EUR13.45 billion. There was a positive impact of 1.6% from acquisitions net of disposals and a negative impact of 0.1% from currency-related items.

The FTSE 100-listed company declared a quarterly shareholder dividend of 35.98p per share, and said that it is on track to complete ongoing share buyback programme of EUR3 billion by the end of the year.

Unilever backed its full-year underlying growth guidance range of 3% to 5%. It also held margin guidance despite warning that cost inflation remains "at strongly elevated levels", and this is expected to continue into next year.

"We have and will continue to respond across our categories and markets, taking appropriate pricing action and implementing a range of productivity measures to offset increased costs," said Chief Executive Alan Jope.

Uniliver highlighted that it has completed the operational separation of its tea business on October 1 and said it is focused on the next stage for this business which is expected to be either an IPO, sale or partnership.

In January 2020, Unilever initiated a strategic review of the tea business, with a potential to sell this business. The auction did not include Unilever's tea operations in India or Indonesia, or assets in the ready-to-drink tea segment.

At the end of September, Sky News reported that CVC Capital Partners had advanced to the second round of the Unilever's tea business sale process, and will compete against a bid from Carlyle, and a combined offer from Cinven and the Abu Dhabi Investment Authority. Other rivals, including Bain Capital and Clayton, Dubilier & Rice, have apparently dropped out of the process.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Security Name Price Change (%) Morningstar
Rating
Unilever PLC 3,859.00

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