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Unilever enjoys strong 2022 on higher prices

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Unilever, which produces household food, cleaning and beauty products, has raised prices due to soaring inflation./AFP
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Feb 10, 2023 - 05:18 AM

LONDON, UNITED KINGDOM — British consumer goods group Unilever said Thursday that 2022 profits soared as sales leapt after product prices shot higher in line with rampant inflation.

Profit after tax jumped 26 percent to 7.6 billion euros ($8.2 billion) last year from 2021, as turnover spiked 14.5 percent to 60.1 billion euros, offsetting its own higher costs, Unilever said in a results statement.

Unilever produces household food, cleaning and beauty products, including Magnum ice cream, Cif surface cleaner and Dove soap.

“Unilever delivered a year of strong topline growth in challenging macroeconomic conditions,” said departing chief executive Alan Jope.

Sales growth was “driven by disciplined pricing action in response to high input cost inflation”, he added.

The group said it faced “significant input cost inflation across our markets” on sky-high inflation and global supply-chain strains.

Average prices charged to Unilever customers for its products increased 11.3 percent last year — broadly in line with annual inflation in the UK.

Unilever, however, warned that it would continue to face higher costs itself, hitting profit.

“A business as broad-based as” Unilever “is always facing inflationary pressures somewhere in the world, so they know the drill,” noted Hargreaves Lansdown analyst Steve Clayton.

“Rarely though, has inflation surged in so many parts of the globe at once.”

New boss 

Thursday’s results come after Unilever last week named Hein Schumacher, the current head of Dutch dairy and nutrition firm Royal FrieslandCampina, as new CEO.

The Dutchman, who had joined Unilever in October as a non-executive director, will succeed Jope in July.

Scotland-born Jope will depart Unilever after coming under fierce pressure from activist investors.

Jope oversaw Unilever’s failed $50-billion bid at the start of 2022 for the former health care unit of drugmaker GlaxoSmithKline.

In response, Jope slashed around 1,500 management jobs in a global restructure widely seen as a bid to appease unhappy investors.

He also offloaded its global tea business, including brands Lipton and PG Tips.

And the group bought a majority stake in hair wellness company Nutrafol.

“We continue to improve our growth profile,” noted Jope.

“There is more to do, but the changes we have made mean that we start 2023 with momentum, setting us up well for delivering another year of higher growth, which remains our first priority.”

Schumacher, 51, has been head of Royal FrieslandCampina since 2018, and was formerly held various roles at US food giant Heinz.

Investors welcomed the bumper results, sending Unilever’s share price up 0.6 percent to £41.24 in late morning deals on London’s rising stock market.

Jope spent 37 years in total at Unilever and has held the top job since 2019.

Under his tenure, Unilever became a wholly British company at the end of 2020 after it completed a merger of its Dutch and British corporate entities.

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