Unilever (ULVR) Q3 2024 TU earnings summary

Executive summary

• Achieved underlying sales growth of 4.5% in Q3 2024, with volume up 3.6%, marking the fourth consecutive quarter of positive and improving volume growth, led by Power Brands and operational improvements in challenging markets.

• All business groups delivered positive volume growth, with particularly strong performances from Beauty & Wellbeing, Ice Cream, and Power Brands, which grew 5.4% with 4.3% volume growth.

• Progressing with the separation of the Ice Cream business and a company-wide productivity program, with leadership appointments and legal entity setup underway in multiple countries.

• Completed exits from the water purification business in China and from Russia, and initiated significant interventions in Indonesia and China to address underperformance.

• Share buyback programme of up to €1.5bn in 2024 is underway, with the first tranche completed and the second to finish by December.

Financial highlights

• Q3 2024 turnover was €15.2 billion, flat year-over-year, as underlying sales growth was offset by adverse currency (-2.8%) and disposal (-1.5%) impacts.

• Majority of growth was volume-driven, with underlying volume growth at 3.6% and price growth at 0.9%.

• Developed markets grew 6.9% in Q3 (volume 6.8%, price 0.1%), while emerging markets grew 2.9% (volume 1.4%, price 1.5%).

• Interim dividend for Q3 maintained at €0.4396 per share.

• Net acquisition and disposal impact was -1.5%, with acquisitions adding 0.3% and disposals subtracting 1.8%.

Outlook and guidance

• Full-year 2024 outlook unchanged, expecting underlying sales growth within the 3–5% multi-year range, with most growth from volume.

• Underlying operating margin for 2024 expected to be at least 18%, with increased brand investment and margin progression in H2 smaller than H1.

• Capex projected at around 3% of turnover, restructuring at 1.2%, and net finance costs at 3% of average net debt.

• Net debt expected to be around 2x net debt/underlying EBITDA; underlying effective tax rate around 26%.

• Subdued pricing expected for the next couple of quarters, with a likely return to moderate price increases as commodity inflation returns.