The FMCG giant will “significantly invest” in brand and marketing, as it pledges to increase absolute spend every year.
Unilever’s CEO has hailed a “good” set of results as showing progress towards the company’s ambition of becoming “a marketing and sales machine”.
The consumer goods business, which owns brands including Dove, Hellmann’s and Vaseline, grew its underlying sales by 3.9% during the third quarter. Unilever also managed to grow volume sales by 1.5% in the quarter. This growth was broad-based across all its different business units.
CEO Fernando Fernandez took over at Unilever earlier this year with a pledge to transform the business, fast. Last month, he reported being “fed up with mediocrity” and promised to “attack” the issue where he saw it.
Speaking to investors today (23 October), Fernandez hailed some progress towards his goal of transforming Unilever.
Unilever’s CEO has hailed a “good” set of results as showing progress towards the company’s ambition of becoming “a marketing and sales machine”.
The consumer goods business, which owns brands including Dove, Hellmann’s and Vaseline, grew its underlying sales by 3.9% during the third quarter. Unilever also managed to grow volume sales by 1.5% in the quarter. This growth was broad-based across all its different business units.
CEO Fernando Fernandez took over at Unilever earlier this year with a pledge to transform the business, fast. Last month, he reported being “fed up with mediocrity” and promised to “attack” the issue where he saw it.
Speaking to investors today (23 October), Fernandez hailed some progress towards his goal of transforming Unilever.
“A positive set of results this quarter […] reaffirm our confidence in the steps we have taken to make Unilever a marketing and sales machine,” he said.
That goal is something which “permeates everything” Unilever does, from driving what Fernandez terms “desire at scale” for its brands to improving execution across the business.
One key goal for Unilever is to expand its margins, explained CFO Srinivas Phatak. Savings and efficiency programmes are a cornerstone of that goal, which the business indicated it is making “progress” on.
However, while expanded margins are a goal, sustained brand investment remains a priority.
“We are continuing to invest significantly behind our brands,” Phatak said. “We’ve said that we will continue to increase absolute spend every year.”
He indicated this year Unilever will increase its absolute investment in marketing to keep it in the range of 15% to 16% of revenue. On a percentage of revenue basis, this is fairly consistent with last year, when brand and marketing spend as a percentage of group turnover was 15.5% (up from 14.3% in 2023). Last year’s increase in spend was hailed as the highest level of investment in marketing at Unilever for a decade.
The business is already seeing some dividends from increased levels of brand investment, notably in North America, which recorded its fifth consecutive quarter of robust volume led growth. This growth was partly driven by “sustained brand investment”, Fernandez added.
Focus on beauty and wellbeing
Upon taking over as CEO, Fernandez highlighted beauty and wellbeing, and personal care as areas of focus, or what he termed “major growth drivers”. These business units were credited with delivering a “particularly strong performance”.
Beauty and wellbeing grew underlying sales 5.1% in the third quarter, with major brands including Dove hair, Vaseline and Liquid I.V. delivering “double-digit, volume-led growth”.
Personal care delivered underlying sales growth of 4.1%. Fernandez highlighted the role of innovation in driving growth, with whole body deodorants, for example, driving “strong consumer engagement and share gains”.
Another notable shift was an acceleration towards digital channels and ecommerce, something Unilever said was happening both through acquisitions (such as with deodorant brand Wild and soap brand Dr Squatch) and organically through its existing brands.
The business has also grown its Amazon sales by 15%, Walmart.com by 5% and TikTok Shop globally by 70%.
“Our portfolio is much better suited now after the reset we have done, with disposals of value brands and with significant acquisitions in the premium segments, digitally native brands that are operating with a lot of success,” Fernandez said.