24th Apr 2025 09:15
(Alliance News) - Unilever PLC on Thursday backed full-year guidance as it reported modest organic sales growth in the first quarter of 2025 and prepared for the spin-off of its Ice Cream business.
The London-based consumer products firm which owns brands such as Persil detergent, Dove soap and Hellmann’s mayonnaise said organic sales grew 3.0% in the first quarter of 2025, beating company compiled consensus of 2.8%.
Organic sales growth was driven by both volume and price, but market conditions were more challenging than in the prior year, Unilever said.
Total sales fell 0.9% to EUR14.8 billion in the quarter compared to EUR15.0 billion a year prior, below consensus of EUR15.1 billion.
Unilever shares were up 0.4% at 4,834.00 pence each in London on Thursday. The wider FTSE 100 index was down 0.3%.
Unilever said 'Power Brands' grew at 3.0% in the quarter, with strong performances in its largest brand Dove, which rose over 8%, as well as Vaseline, Liquid IV, and Magnum.
This was partially offset by Home Care Power Brands, which were hurt by market conditions, particularly in Brazil, and Knorr, which faced a strong comparative in the Unilever Food Solutions business.
Beauty & Wellbeing grew underlying sales by 4.1%, with volume growth of 2.5% and price of 1.5%.
Personal Care underlying sales grew 5.1%, with volume up 2.7%, driven by the performance of skin cleansing and deodorants in North America.
Home Care underlying sales increased 0.9%, as continued strong growth in Europe was largely offset by challenging market conditions in Latin America.
Underlying sales growth of 1.6% in Foods was price-led amidst slow markets, with Ice Cream underlying sales up 4.0%.
New Chief Executive Fernando Fernandez said it was a "resilient" performance for Unilever in the first quarter.
For 2025 a whole, Unilever continues to expect underlying sales growth within a range of 3% to 5%.
"This is underpinned by our strong innovation pipeline, good momentum in developed markets, and expected improvements in Indonesia and China in the second half of the year resulting from the decisive actions we have taken in both markets," the company said.
Unilever still anticipates a modest improvement in underlying operating margin for the full year, versus 18.4% in 2024.
"The direct impact of tariffs on our profitability is expected to be limited and manageable," the firm said.
"All this being said, we are conscious that the macroeconomic environment, currency stability and consumer sentiment remain uncertain and we will be agile in adjusting our plans as necessary," Unilever added.
Unilever said it is on track to complete the separation of Ice Cream in the fourth quarter of 2025.
The new business will be called Magnum Ice Cream Co and is expected to operate on a standalone basis from July 1. In addition to Magnum, the Ice Cream division includes the Wall's and Ben & Jerry's.
The business will be incorporated in the Netherlands and will continue to be headquartered in Amsterdam. Like Unilever itself, Magnum will be listed in Amsterdam, London and New York.
Ahead of its demerger, Magnum Ice Cream will hold a capital markets day on September 9.
Unilever reported progress on its cost savings programme and expects to realise around EUR550 million of the programme's likely EUR800 million savings by the end of 2025.
It said around 6,000 jobs had been cut by the end of the first quarter out of the total 7,500 reductions expected.
By Jeremy Cutler, Alliance News reporter
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