REG - Unilever PLC - Final Results
08/02/2024 07:15
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RNS Number : 4688C Unilever PLC 08 February 2024
2023 Full Year Results
Implementing Growth Action Plan at pace
Underlying performance GAAP measures
(unaudited) 2023 vs 2022 2023 vs 2022
Full Year
Underlying sales growth (USG) 7.0% Turnover €59.6bn (0.8)%
Beauty & Wellbeing 8.3% Beauty & Wellbeing €12.5bn 1.8%
Personal Care 8.9% Personal Care €13.8bn 1.4%
Home Care 5.9% Home Care €12.2bn (1.8)%
Nutrition 7.7% Nutrition €13.2bn (5.0)%
Ice Cream 2.3% Ice Cream €7.9bn 0.5%
Underlying operating profit €9.9bn 2.6% Operating profit €9.8bn (9.3)%
Underlying operating margin 16.7% 60bps Operating margin 16.4% (150)bps
Underlying earnings per share €2.60 1.4% Diluted earnings per share €2.56 (14.2)%
Free cash flow €7.1bn €1.9bn Net profit €7.1bn (13.7)%
Fourth Quarter
USG 4.7% Turnover €14.2bn (3.0)%
Quarterly dividend payable in March 2024 €0.4268 per share ((a))
(a) See note 11 for more information on dividends
Financial and operational highlights
• Underlying sales growth of 7.0% with positive volumes, up 0.2%
for the FY and 1.8% in Q4
• Turnover of €59.6 billion with (5.7)% impact from currency and
(1.7)% from net disposals
• Underlying operating margin up 60bps to 16.7%, with gross margin
up 200bps for the year and up 330bps in the second half
• Underlying EPS increased 1.4% with (9.6)% of adverse currency,
up 11% on a constant basis
• Diluted EPS down (14.2)% against prior year that included €2.3
billion profit on disposal for the Tea business
• Strong cash conversion of 111% with free cash flow up €1.9
billion to €7.1 billion
• New €1.5 billion share buyback to commence in Q2
• Progress against Growth Action plan, including:
• New leadership team has embedded the plan across the
organisation
• 30 Power Brands (~75% of turnover) accretive to growth and
margin, with underlying sales up 8.6%
• Brand and marketing investment up 130bps to 14.3%, focused on
30 Power Brands
• Active portfolio optimisation into premium segments, announced
acquisitions of K18 and Yasso and disposals of Elida Beauty, Dollar Shave
Club, Suave in North America
Chief Executive Officer statement
"Today's results show an improving financial performance, with the return to
volume growth and margins rebuilding. However, our competitiveness remains
disappointing and overall performance needs to improve. We are working to
address this by improving our execution to unlock Unilever's full potential.
In October, we set out a Growth Action Plan focused on three priorities:
delivering higher-quality growth, stepping up productivity and simplicity, and
adopting a strong performance focus.
The new leadership team has embedded the action plan at pace. We have
increased investment behind our 30 Power Brands, accelerated portfolio
transformation, and are driving a sharper performance focus with clear and
stretching targets across the whole organisation.
We are at the early stages of this work and there is much to do but we are
moving with speed and urgency to transform Unilever into a consistently higher
performing business."
Hein Schumacher
Outlook
We expect underlying sales growth (USG) for 2024 to be within our multi-year
range of 3% to 5%, with more balance between volume and price.
We anticipate a modest improvement in underlying operating margin for the full
year. We will deliver this through gross margin expansion, driven by a step-up
in productivity and net material inflation back to more normal levels.
Growth Action Plan Update
In October 2023, we set out a Growth Action Plan to drive improved performance
and competitiveness. During the fourth quarter, we moved at pace to embed it
across the business.
The plan is divided into three elements but is underpinned by one simple
premise: the need to do fewer things, better, with greater impact. The
operational impacts will build throughout 2024.
Faster growth
1. Focus on 30 Power Brands: These gross margin accretive brands
represented around 75% of Group turnover with underlying sales growth of 8.6%
in 2023 and 6.5% in the fourth quarter. This is where we have concentrated our
incremental brand and marketing investment, which will continue in 2024.
2. Drive unmissable brand superiority: We developed a new quantitative
methodology to measure brands' consumer appeal across multiple dimensions and
have validated it in 29 strategic cells. During the first half of 2024, this
will be rolled out across all 30 Power Brands in key geographies to identify
performance gaps and improve competitiveness.
3. Scale multi-year innovation: We have identified multi-year,
scalable innovation programmes to drive market development and premiumisation.
The programmes at least double the average 2022 project size, with launches
from 2025.
4. Increase brand investment and returns: In 2023, we reinvested more
than half of our gross margin expansion into incremental brand and marketing
investment, up 130bps to 14.3%. We will continue to step up investment in
areas that drive impact and support improved competitiveness.
5. Selectively optimise the portfolio: We continue to reshape the
portfolio, with the announced acquisitions of Yasso and K18 and the disposals
of Elida Beauty, Dollar Shave Club and Suave.
Productivity & simplicity
6. Build back gross margin: We accelerated recovery in the second half
of 2023 with a 330bps gross margin improvement, driving a 200bps improvement
for the year to 42.2%. In 2024, a tight grip on costs, measured by improved
net productivity, will fuel further gross margin expansion.
7. Focus our sustainability commitments: We are honing our
sustainability efforts around four critical platforms: Climate, Plastic,
Nature and Livelihoods. We have set exacting, short-term targets, to drive
progress against our longer-term commitments.
8. Drive benefits of the organisation: The category-focused Business
Groups are now fully implemented with end-to-end responsibility for strategy
and performance. In 2024, this will enable sharper choices to accelerate
growth and digitalisation.
Performance culture
9. Renewed team: Since October, over half of our executive leadership
team has changed. Our new leaders are addressing the 2024 opportunities and
challenges with urgency and decisiveness.
We are announcing today that our Chief People & Transformation Officer
Nitin Paranjpe has decided to retire from Unilever later this year. Nitin has
had a distinguished 37-year career with Unilever, including as CEO of
Hindustan Unilever, President Home Care, President Foods & Refreshment and
Chief Operating Officer of Unilever. We are pleased to announce the
appointment of Mairéad Nayager as our new Chief People Officer, effective 1
June. Mairéad is currently Chief Human Resources Officer (CHRO) of Haleon
PLC, having previously served as CHRO of Diageo PLC between 2015 and 2022.
10. Drive and reward outperformance: We have implemented a new reward
framework across the organisation with metrics more closely aligned to value
creation. A new Directors' remuneration policy proposal has been extensively
consulted on with our largest shareholders and will be voted on at the 2024
AGM.
Full Year Review: Unilever Group
(unaudited) Turnover USG UVG UPG A&D Currency Turnover change UOM% Change in UOM
Full Year €59.6bn 7.0% 0.2% 6.8% (1.7)% (5.7)% (0.8)% 16.7% 60bps
Fourth Quarter €14.2bn 4.7% 1.8% 2.8% (0.7)% (6.7)% (3.0)%
Performance
Underlying sales growth in the full year was 7.0%, with positive volumes of
0.2% and 6.8% from price. Growth from the 30 Power Brands was accretive at
8.6%. Beauty & Wellbeing and Personal Care delivered strong volume growth
throughout the year and Home Care returned to positive volume growth in the
second half. Volume growth for the Group accelerated to 1.8% in the fourth
quarter, with 3.9% volume growth from the 30 Power Brands.
Underlying price growth decelerated from 10.7% in the first quarter to 2.8% in
the fourth quarter, reflecting lower net material inflation in the second
half. Nutrition and Ice Cream faced the highest input cost inflation in 2023
which translated into higher pricing.
The percentage of our business winning market share* on a rolling 12
month-basis was disappointing at 37%. This poor performance reflects share
losses to private label in Europe, consumer shifts to super-premium segments
in North America where we currently under index and a significant reduction of
unprofitable SKUs globally. Our competitiveness is not good enough and we are
moving quickly to address it.
Beauty & Wellbeing grew underlying sales by 8.3%, with strong volume
growth of 4.4%. Prestige Beauty and Health & Wellbeing continued to grow
double-digit and now account for a quarter of Beauty & Wellbeing's
turnover. Personal Care grew underlying sales 8.9%, with 3.2% from volume and
5.5% from price, led by strong sales growth of Deodorants. Home Care grew
underlying sales 5.9%, driven by 6.8% from price and (0.9)% from volume, with
positive volumes in emerging markets offset by a double-digit decline in
Europe. Nutrition grew underlying sales 7.7%, with 10.1% from price and
volumes down (2.2)% as we responded to higher input costs and a challenging
European market. Ice Cream's underlying sales growth was disappointing at
2.3%, with price growth of 8.8% and a volume decline of (6.0)%, reflecting the
impact of downtrading in the in-home channels.
Emerging markets (58% of Group turnover) grew underlying sales 8.5%, with 1.6%
from volume and 6.9% from price. Latin America, Turkey and Africa delivered
double-digit growth. India grew mid-single digit led by volume, with lower
input costs that led to negative pricing in the fourth quarter. Sales in China
grew low-single digit led by volume while the market recovery continued to be
uneven and slower than expected. Growth in South East Asia was impacted by a
sales decline in Indonesia in the fourth quarter as consumers avoided the
brands of multinational companies in response to the geopolitical situation in
the Middle East.
Underlying sales in developed markets (42% of Group turnover) grew 4.8% in the
full year with 6.7% from price and (1.8)% from volume. North America delivered
strong growth of 5.8% with 2.5% from volume and 3.3% from price, with
continued double-digit underlying sales growth in Prestige Beauty and Health
& Wellbeing. Volume growth in North America accelerated throughout the
year leading to volume growth of 6.3% in the fourth quarter. In Europe,
underlying sales growth was 4.1%, driven by 12.8% from price given its higher
exposure to categories with significant cost inflation, and a volume decline
of (7.7)%.
Turnover was €59.6 billion, down (0.8)% versus the prior year, including
(5.7)% adverse foreign exchange translation and (1.7)% from disposals net of
acquisitions. Underlying operating profit was €9.9 billion, up 2.6% versus
the prior year. Underlying operating margin increased 60bps to 16.7%. We
improved gross margin by 200bps to 42.2% with an improvement of 330bps in the
second half. We more than mitigated net material inflation of around €1.8
billion through improved productivity, price and mix while stepping up brand
and marketing investment by €0.7 billion, a 130bps increase as a percentage
of turnover. Overheads increased by 10bps, as we continued to invest in the
expansion of our Prestige Beauty and Health & Wellbeing businesses.
Capital allocation
We continue to reshape the portfolio, allocating capital to premium segments
through selective bolt-on acquisitions and divesting lower-growth businesses
while balancing investment in the business and shareholder returns.
Adding to our portfolio of premium brands, we announced the acquisitions of
Yasso Holdings, Inc., a premium frozen Greek yogurt brand in the United
States, which completed on 1 August, and K18, a premium biotech haircare
brand, which completed on 1 February 2024.
We announced three disposals during the year: the Suave beauty and personal
care brand in North America, which completed on 1 May; Dollar Shave Club,
which completed on 1 November; and Elida Beauty, which comprises more than 20
personal care brands. It is expected to complete by mid-2024.
In 2023, we returned €5.9 billion to shareholders through dividends and
share buybacks. We completed the final two €750 million tranches of our €3
billion share buyback programme. The quarterly interim dividend for the Fourth
Quarter is maintained at €0.4268.
Reflecting the Group's continued strong cash generation, the Board has
approved a share buyback programme of up to €1.5 billion to be conducted
during 2024, which we expect to commence in the second quarter.
*Competitiveness % Business Winning measures the aggregate turnover of the
portfolio components (country/category cells) gaining value market share as a
% of the total turnover measured by market data. As such, it assesses what
percentage of our revenue is being generated in areas where we are gaining
market share
Conference Call
Following the release of this trading statement on 8 February 2024 at 7:00 AM
(UK time), there will be a webcast at 8:00 AM available on the website
www.unilever.com/investor-relations/results-and-presentations/latest-results.
A replay of the webcast and the slides of the presentation will be made
available after the live meeting.
Full Year Review: Business Groups
Full Year 2023 Fourth Quarter 2023
(unaudited) Turnover USG UVG UPG UOM Change in UOM Turnover USG UVG UPG
Unilever €59.6bn 7.0% 0.2% 6.8% 16.7% 60bps €14.2bn 4.7% 1.8% 2.8%
Beauty & Wellbeing €12.5bn 8.3% 4.4% 3.8% 18.7% 0bps €3.2bn 7.9% 6.3% 1.5%
Personal Care €13.8bn 8.9% 3.2% 5.5% 20.2% 60bps €3.4bn 6.4% 2.5% 3.8%
Home Care €12.2bn 5.9% (0.9)% 6.8% 12.3% 150bps €3.0bn 1.7% 0.8% 0.9%
Nutrition €13.2bn 7.7% (2.2)% 10.1% 18.6% 100bps €3.4bn 4.7% (1.1)% 5.9%
Ice Cream €7.9bn 2.3% (6.0)% 8.8% 10.8% (90)bps €1.2bn (0.4)% (0.8)% 0.4%
Beauty & Wellbeing (21% of Group turnover)
In Beauty & Wellbeing, we are focused on three key priorities that will
drive the unmissable superiority of our brands: elevating our core Hair Care
and Skin Care brands to increase premiumisation; fuelling the growth of
Prestige Beauty and Health & Wellbeing with selective international
expansion; and continuing to strengthen our beauty and wellbeing capabilities.
(unaudited) Turnover USG UVG UPG A&D Currency Turnover change UOM% Change in UOM
Full Year €12.5bn 8.3% 4.4% 3.8% 0.1% (6.2)% 1.8% 18.7% 0bps
Fourth Quarter €3.2bn 7.9% 6.3% 1.5% (2.1)% (7.5)% (2.3)%
Beauty & Wellbeing delivered a strong full year performance, with
underlying sales up 8.3%, balanced between volume at 4.4% and price at 3.8%.
Volume growth accelerated through the year to 6.3% in the fourth quarter, with
good volumes in Hair Care and very strong volumes in Health & Wellbeing.
The full year performance reflects continued strong growth in Prestige Beauty
and Health & Wellbeing, which now account for a quarter of Beauty &
Wellbeing's turnover, as well as successful relaunches of some of our core
Hair Care and Skin Care brands. The relaunches were powered by our science and
technology capabilities and were supported by increased investment across our
key markets to elevate their superiority credentials.
Hair Care grew mid-single digit through a combination of price and volume
growth, with strong growth in Latin America and Turkey. Sunsilk delivered
double-digit growth for the year following a successful relaunch of the brand.
Clear delivered mid-single digit growth driven by breakthrough innovation -
our first clinically proven anti-dandruff formula powered by niacinamide
concentrate to repair and strengthen the scalp's skin barrier. Following the
successful relaunch in China last year, the mix has now been expanded to
Thailand, Turkey and Brazil.
Core Skin Care grew low-single digit driven by price. Vaseline delivered
double-digit growth, reaching €1 billion of turnover in 2023. Following the
launch of our successful Gluta-Hya range in South East Asia two years ago, we
further expanded the platform with the launch of serums and a Pro-Age range,
tapping into a larger consumer pool by extending the patented technology to
more products and new markets such as India. In North Asia, AHC declined
double-digit as we reset the cross-border trade channel.
Our US-centric Prestige Beauty and Health & Wellbeing portfolios, built
over several years through carefully selected bolt-on acquisitions, continued
to grow ahead of the market delivering double-digit growth for the year. This
was supported by strong performances from Hourglass, Dermalogica and Paula's
Choice which launched a Vitamin C range, using our core science and technology
capabilities. In Health & Wellbeing, Liquid I.V. and Nutrafol performed
strongly. Liquid I.V. added sugar-free and kids variants to the range,
without compromising flavour or function. The brand extended its presence
outside of the United States for the first time with a successful launch in
Canada, and further international roll outs planned.
Underlying operating margin was flat with gross margin improvement reinvested
in marketing and overheads.
Personal Care (23% of Group turnover)
In Personal Care, we are focused on winning with science-led brands that
deliver unmissable superiority to our consumers across Deodorants, Skin
Cleansing, and Oral Care. Our priorities include developing superior
technology and multi-year innovation platforms, leveraging partnerships with
our customers, and expanding into premium areas and digital channels.
(unaudited) Turnover USG UVG UPG A&D Currency Turnover change UOM% Change in UOM
Full Year €13.8bn 8.9% 3.2% 5.5% (0.9)% (6.1)% 1.4% 20.2% 60bps
Fourth Quarter €3.4bn 6.4% 2.5% 3.8% (1.8)% (7.5)% (3.4)%
Personal Care grew underlying sales 8.9% for the year, with growth balanced
between price and volume, underpinned by continued strength in Deodorants. In
the fourth quarter all three categories drove positive volumes.
Personal Care's full year growth was led by its Power Brands and
science-backed innovations. These innovations offer functional benefits but
also deliver enhanced health, hygiene, and superior skin cleansing. Personal
Care supported these innovations with a step-up in marketing investment,
including strategic sponsorships such as our first sponsorship deal with FIFA.
Deodorants grew double-digit led by strong volume growth, particularly in
Europe and Latin America. Rexona grew double-digit and its range of products
with 72-hour sweat and odour protection technology is now in over 100 markets.
Dove delivered double-digit growth with the successful launch of Dove Advanced
Care for women and the launch of a new range of Dove Men+Care antiperspirant.
Axe grew high-single digit following the launch of its new, long-lasting fine
fragrance collection.
Skin Cleansing delivered mid-single digit growth with positive volumes. Lux
grew double-digit driven by elevated skin care benefits in soap bars from its
ProGlow technology. In the United States, Dove grew mid-single digit supported
by its Body Wash relaunch with new packaging and 24-hour renewing
MicroMoisture technology.
Oral Care grew mid-single digit led by price. Close Up grew double-digit and
Pepsodent grew mid-single digit, having expanded its premium offerings in
therapeutics and whitening.
The Dove Personal Care portfolio achieved double-digit growth with balanced
price and volume growth.
Underlying operating margin increased by 60bps, driven by a strong gross
margin improvement that was partly re-invested in increased brand and
marketing investment.
Home Care (21% of Group turnover)
In Home Care, we focus on delivering for consumers who want superior products
that are sustainable and great value. We drive growth through unmissable
superiority in our biggest brands, in our key markets and across channels. We
have a resilient business that spans price points and grows the market by
premiumising and trading consumers up to additional benefits.
(unaudited) Turnover USG UVG UPG A&D Currency Turnover change UOM% Change in UOM
Full Year €12.2bn 5.9% (0.9)% 6.8% -% (7.2)% (1.8)% 12.3% 150bps
Fourth Quarter €3.0bn 1.7% 0.8% 0.9% -% (7.5)% (5.9)%
Home Care grew underlying sales 5.9% for the full year, with 6.8% from price
and (0.9)% from volume. Volumes were positive in the second half, with a sharp
price growth deceleration in emerging markets reflecting commodity cost
deflation.
In Home Care we stepped up investments in brand and marketing and R&D to
drive unmissable superiority of our biggest brands and deliver innovations
that enhance the efficacy and sustainability of our products.
Fabric Cleaning grew mid-single digit for the year. This was led by
high-single digit growth in Latin America where we launched OMO Branco
Absoluto that restores the whiteness of clothes. South Asia delivered balanced
high-single digit growth as we continued to develop the market by offering a
full range of products to consumers, from entry-level products such as our
Wheel laundry soap bar to mid-tier Rin, to premium Surf Excel liquid
detergent. Growth in Europe was flat with double-digit price growth offset by
volume declines. We expanded plastic-free packaging for OMO capsules to more
countries across Europe and drove premiumisation through next generation
innovation such as laundry sheets, a convenient and sustainable alternative to
liquids and capsules.
We leveraged our cross-category science and technology platforms by using
fragrance innovation from Beauty & Wellbeing in Fabric Enhancers where we
launched Comfort Beauty Perfume in Vietnam. Fabric enhancers delivered
mid-single digit growth driven by price with low-single digit volume decline.
Turkey continued to lead growth with double-digit price and volume growth.
Home & Hygiene grew mid-single digit led by strong growth in Latin America
and South Asia which was partially offset by a decline in South East Asia. In
the United Kingdom, we launched Domestos Power Foam - an unmissably superior
innovation that is designed to spray upside down for improved cleaning
performance as well as convenience. High store penetration and availability
coupled with product superiority make this a blueprint for future rollouts.
Underlying operating margin increased by 150bps driven by the strong gross
margin improvement and a step-up in brand and marketing investment.
Nutrition (22% of Group turnover)
In Nutrition, our strategy is to deliver consistent, competitive growth by
offering unmissably superior products through our biggest brands. We do this
by reaching more consumers and focusing on top dishes and high consumption
seasons to satisfy consumer's preferences on taste, health and sustainability;
while delivering productivity and resilience in our supply chain.
(unaudited) Turnover USG UVG UPG A&D Currency Turnover change UOM% Change in UOM
Full Year €13.2bn 7.7% (2.2)% 10.1% (6.9)% (5.2)% (5.0)% 18.6% 100bps
Fourth Quarter €3.4bn 4.7% (1.1)% 5.9% (0.4)% (5.6)% (1.5)%
Nutrition grew underlying sales 7.7% for the year, with 10.1% from price and
(2.2)% from volume. Growth continued to be price-led as we responded to higher
input costs of food ingredients. In the fourth quarter, we saw an improvement
in volumes, with our two largest brands, Hellmann's and Knorr, returning to
positive volume growth.
Growth in Nutrition was driven primarily by Knorr and Hellmann's, which
together accounted for 60% of Nutrition's turnover in 2023. We sharpened our
focus on offering holistically superior products and unmissable marketing
campaigns in key seasons, supported by increased marketing and R&D
investment. Our business in Europe remained challenging as a result of
continued cost inflation, the targeted exit of unprofitable SKUs, and private
label share gains, impacting both volumes and profitability.
Scratch Cooking Aids grew high-single digit, led by Knorr, which achieved €5
billion in turnover in 2023. North America grew mid-single digit, supported by
the 'Knorr Taste Combos' campaign and the launch of Knorr ready-to-eat snack
pots which provide consumers with a nutritious meal while saving time. Latin
America grew double-digit and Europe grew mid-single digit as we developed
targeted campaigns to inspire healthier diets. Africa grew double-digit,
supported by fortified products that help address malnutrition in the region.
Dressings grew double-digit driven by price. With strong foundations in taste,
sustainable ingredients and recyclable bottles, Hellmann's grew double-digit
with positive volume driven by Latin America. The performance was helped by
further roll outs of our vegan and flavoured mayonnaise range. We stepped up
brand marketing investment to target high consumption occasions such as
Thanksgiving, Christmas or the summer BBQ season. 2023 was our third
consecutive US Super Bowl 'Make Taste, Not Waste' campaign with nearly 10
billion earned media impressions and we partnered with the NBA in Brazil.
Unilever Food Solutions, now 20% of Nutrition's sales, grew double-digit with
positive volume and price growth driven by our strong presence in Europe,
North America and North Asia. Our focus on customer service and digital
selling has enabled us to serve more operators and improve productivity. As
the food service market in China fully reopened, we grew double-digit, helped
by market making innovation such as extending Knorr bouillon to more flavours,
tapping into evolving consumer preferences.
Functional Nutrition returned to growth while growing penetration and market
share through its core proposition for kids as well as premium innovation
tailored for women and people with diabetes.
Underlying operating margin increased by 100bps, driven by gross margin
improvement which funded an increase in brand and marketing investment.
Ice Cream (13% of Group turnover)
In Ice Cream, our immediate strategic priority is to expand operating profit
and global market share. We will do this by building the unmissable
superiority of our brands, accelerating market development in emerging
markets, continuing to lead the industry on innovation and premiumisation, and
by stepping up our performance and productivity.
(unaudited) Turnover USG UVG UPG A&D Currency Turnover change UOM% Change in UOM
Full Year €7.9bn 2.3% (6.0)% 8.8% 0.9% (2.7)% 0.5% 10.8% (90)bps
Fourth Quarter €1.2bn (0.4)% (0.8)% 0.4% 4.0% (3.6)% (0.2)%
Ice Cream grew underlying sales by 2.3%, with 8.8% from price and (6.0)% from
volume. Volumes were impacted throughout the year by high price elasticities
with consumers downtrading to value formats and less favourable summer weather
versus last year, mainly in Europe. In the fourth quarter, price growth slowed
significantly after double-digit price growth in the first half of the year.
Ice Cream had a disappointing year with declining market share and
profitability. We continued to invest behind our Power Brands, including
Magnum and Cornetto, which generated almost 85% of the Business Group's
turnover. These brands remain well positioned to meet consumer's desire for
superior and indulgent ice cream. Emerging markets delivered mid-single
digit growth, driven by a strong performance in Turkey. In the fourth quarter,
we made additional investments in promotions, particularly in North America,
to address competitiveness and volume decline.
In the full year, there was a marginal decline in In-home Ice Cream (around
60% of the business), with volumes down high-single digit broadly offset by
pricing. Inflation remained high and private label gained share as consumers
looked for value propositions in this discretionary category. In the United
States, our Talenti brand expanded from pints into new formats with mini
gelato and sorbetto bars.
Out-of-home Ice Cream (around 40% of the business) grew high-single digit,
driven by strong pricing partially offset by some volume decline. Our
limited-edition Magnum innovation, Starchaser and Sunlover, performed well and
became Magnum's biggest ever innovation.
Underlying operating margin declined 90bps, driven by lower gross margin as a
result of continued cost inflation and volume deleverage outstripping pricing,
while brand and marketing investment increased.
Full Year Review: Geographical Areas
Full Year 2023 Fourth Quarter 2023
(unaudited) Turnover USG UVG UPG Turnover USG UVG UPG
Unilever €59.6bn 7.0% 0.2% 6.8% €14.2bn 4.7% 1.8% 2.8%
Asia Pacific Africa €26.2bn 6.5% 1.1% 5.3% €6.1bn 1.9% 0.7% 1.1%
The Americas €21.5bn 9.3% 3.4% 5.7% €5.4bn 9.6% 7.4% 2.0%
Europe €11.9bn 4.1% (7.7)% 12.8% €2.7bn 2.5% (6.3)% 9.4%
Full Year 2023 Fourth Quarter 2023
(unaudited) Turnover USG UVG UPG Turnover USG UVG UPG
Emerging markets €34.7bn 8.5% 1.6% 6.9% €8.3bn 4.6% 2.3% 2.2%
Developed markets €24.9bn 4.8% (1.8)% 6.7% €5.9bn 4.9% 1.1% 3.7%
North America €13.1bn 5.8% 2.5% 3.3% €3.2bn 7.0% 6.3% 0.7%
Latin America €8.4bn 14.9% 4.8% 9.6% €2.2bn 13.4% 9.1% 4.0%
Asia Pacific Africa (44% of Group turnover)
Underlying sales growth was 6.5% with price growth of 5.3% and volume growth
of 1.1%.
India grew mid-single digit through balanced price and volume growth. Sales
were flat in the fourth quarter as pricing turned negative, mainly driven by
price reductions in Fabric Cleaning and Skin Cleansing bars as a result of
commodity movements. We are focused on driving competitive volume growth while
pricing is expected to remain marginally negative if current commodity prices
persist.
China grew low single-digit in a deflationary market with low consumer
confidence. Growth was driven by a strong performance in Unilever Food
Solutions and growth in Beauty & Wellbeing, while Home Care, Personal Care
and Ice Cream declined.
In Indonesia, sales declined double-digit in the fourth quarter as consumers
avoided the brands of multinational companies in response to the geopolitical
situation in the Middle East. We have since seen some improvement to customer
and consumer uptake in January. Growth in the Philippines was broad-based with
a mix of price and volume growth while Thailand and Vietnam saw mid-single and
low-single digit growth respectively, led by price.
Turkey delivered double-digit volume growth in a hyperinflationary environment
with all Business Groups growing volumes.
Africa grew double-digit driven by price as volume growth turned positive in
the second half.
The Americas (36% of Group turnover)
Underlying sales growth in North America was strong at 5.8% with 2.5% from
volume growth, which accelerated to 6.3% in the fourth quarter, and 3.3% from
price. Beauty & Wellbeing grew double-digit led by Prestige and Health
& Wellbeing. Personal Care grew mid-single digit and Nutrition grew
high-single digit, with strong performances from Dove and Hellmann's
respectively. Positive volume growth in Beauty and Wellbeing, Nutrition, and
Personal Care was partially offset by a volume decline in Ice Cream.
Latin America grew 14.9% with 4.8% from volume growth and 9.6% from price.
Growth was broad-based with double-digit growth in Brazil, Mexico, and
Argentina. Personal Care led growth through double-digit volume growth driven
by Rexona. Brazil growth was led by Personal Care and Nutrition where
Hellmann's Supreme became the market leader in the premium Squeeze segment.
Argentina grew volumes double-digit despite challenging macro-economic and
market conditions, particularly in the fourth quarter.
Europe (20% of Group turnover)
Underlying sales growth was 4.1% with price at 12.8% and volume at (7.7)%.
Price growth remained elevated in all Business Groups to at least partially
recover the impact from high input cost inflation. Personal Care and Beauty
& Wellbeing delivered strong growth with slightly positive volume.
Nutrition grew mid-single digit, while growth in Ice Cream and Home Care was
muted due to double-digit volume declines. Private label gained share across
most categories as consumer looked for value propositions in a high inflation
environment.
Price-led growth was broad-based across most of the region. Eastern Europe and
the United Kingdom grew underlying sales strongly, while France declined.
Additional commentary on the financial statements - Full Year
Finance costs and tax
Net finance costs reduced by €7 million to €486 million in 2023. This was
driven by higher interest income across several markets and a higher interest
credit from pensions, which more than offset the higher cost of debt on bonds
and commercial paper. Net finance costs were 2.1% on average net debt. For
2024, we expect net finance costs to be between 2.5% to 3% on average net
debt. This reflects the impact of refinancing maturing debt at higher rates,
and lower finance income and pension credits versus 2023.
The underlying effective tax rate for 2023 increased to 25.6% (2022: 24.1%),
due to a number of factors including an increase in non-deductible interest
and irrecoverable withholding tax, as well as lower benefits from tax
settlements and other one-off items. Our guidance for the underlying effective
tax rate remains around 25%. The effective rate was 24.1% and included a
benefit related to the disposal of the Dollar Shave Club. This compares with
20.4% in the prior year, which included a significant favourable impact
related to the disposal of the global tea business which benefited from the
participation exemption in the Netherlands.
Joint ventures, associates and other income from non-current investments
Net profit from joint ventures and associates increased €23 million to
€231 million, largely driven by the Pepsi-Lipton JVs. Other income from
non-current investments was €(22) million, versus €24 million in the prior
year.
Earnings per share
Underlying earnings per share increased 1.4% to €2.60, including (9.6)% of
adverse currency. Constant underlying earnings per share increased by 11.0%,
reflecting a strong operational performance. The reduction in the average
number of shares as a result of the share buyback programme contributed 1.1%.
Diluted earnings per share of €2.56 decreased by 14.2% versus the prior year
that included the €2.3 billion profit on disposal for the Tea business.
Free cash flow
We delivered strong cash conversion of 111%. Free cash flow increased €1.9
billion to €7.1 billion (2022: €5.2 billion). This increase was largely
driven by higher underlying operating profit, significantly improved working
capital, and included €0.4 billion linked to a tax refund in India.
Underlying return on invested capital
Underlying return on invested capital improved to 16.2% (2022: 16.0%). This
reflected the working capital improvement that reduced total invested capital.
Net debt
Closing net debt was €23.7 billion in line with 31 December 2022. Capital
returns of €4.4 billion in dividends and €1.5 billion in share buyback to
PLC shareholders, as well as net spend on acquisition and disposal activity,
were fully funded by the free cash flow delivery of €7.1 billion. Net debt
to underlying EBITDA was 2.1x as at 31 December 2023, in line with the prior
year and our guidance of around 2x.
Pensions
Pension assets net of liabilities were in surplus of €2.4 billion at 31
December 2023 versus a surplus of €2.6 billion at the end of 2022. The
decrease was primarily driven by reductions in interest rates increasing
liabilities more than assets.
Financial implications and impairment risk in Russia
Our Russia business employs approximately 3,000 people in Russia and in 2023
the business represented around 1% of the Group's turnover and net profit. As
at 31 December 2023, our Russia business had net assets of around €600
million, including four factories. During 2023 we reviewed our position and
concluded that the containment actions we put in place at the beginning of the
war minimise our economic contribution to the Russian state.
We will continue to review and disclose the financial implications from the
conflict. While the potential impacts remain uncertain, there remains a risk
that our operations in Russia are unable to continue, leading to loss of
turnover, profit and a write-down of assets.
Share buyback programme
On 18 October 2023, we completed the fourth and final €750 million tranche
of our share buyback programme of up to €3 billion, initiated on 10 February
2022. The total consideration paid for the repurchase of 16,181,572 shares is
recorded within other reserves and the shares are held by Unilever as treasury
shares. Under the first three tranches of the programme, a total of 49,770,289
ordinary Unilever PLC shares were purchased, and subsequently cancelled on 2
August 2023.
Reflecting the Group's continued strong cash generation and anticipated
proceeds from the sale of Elida Beauty, the Board has approved a share buyback
programme of up to €1.5 billion to be conducted during 2024, which we expect
to commence in the second quarter.
Finance and liquidity
In 2023, the following notes matured and were repaid:
• February: €600 million 0.375% fixed rate notes
• March: $550 million 3.125% fixed rate notes
• June: €500 million 1.00% fixed rate notes
• August: €500 million 0.50% fixed rate notes
• September: $500 million 0.375% fixed rate notes
The following notes were issued:
• February: €500 million 3.25% fixed rate notes maturing in
February 2031 and €500 million 3.50% fixed rate notes due February 2035
• June: €550 million 3.30% fixed rate notes due June 2029 and
€700 million 3.40% fixed rate notes due June 2033
• September: $700 million 4.875% fixed rate notes due September 2028
and $800 million 5.00% fixed rate notes due December 2033
On 31 December 2023, Unilever had undrawn revolving 364-day bilateral credit
facilities in aggregate of $5,200 million and €2,600 million with a 364-day
term out.
Competition Investigations
As previously disclosed, Unilever is involved in a number of ongoing
investigations by national competition authorities. These proceedings and
investigations are at different stages and concern different product markets.
Where appropriate, provisions are made and contingent liabilities disclosed in
relation to such matters.
Ongoing compliance with competition laws is of key importance to Unilever. It
is Unilever's policy to co-operate fully with competition authorities whenever
questions or issues arise. At the same time, we are vigorously defending
Unilever when we feel that allegations are unwarranted. The Group continues to
reinforce and enhance its internal competition law compliance programme on an
ongoing basis.
Functional Currency of Unilever PLC
Effective from 1 January 2024, the functional currency of Unilever PLC
("PLC"), the Group's ultimate parent company, has changed from Sterling to
Euro. This follows a review and subsequent change of the internal debt of PLC,
from Sterling to Euro, which triggered a formal evaluation of PLCs functional
currency in line with relevant accounting standards. The change is applied
prospectively. There is no change to the stock listing currency of the Group
and future dividends will continue to be paid in Sterling, Euro, and US dollar
depending on the location of the exchange where shares are traded. There is no
impact on the presentation of the Group results nor will there be any
restatement to the Group financial statements as a result of this change.
Non-GAAP measures
Certain discussions and analyses set out in this announcement include measures
which are not defined by generally accepted accounting principles (GAAP) such
as IFRS. We believe this information, along with comparable GAAP measurements,
is useful to investors because it provides a basis for measuring our operating
performance, ability to retire debt and invest in new business opportunities.
Our management uses these financial measures, along with the most directly
comparable GAAP financial measures, in evaluating our operating performance
and value creation. Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information presented in
compliance with GAAP. Wherever appropriate and practical, we provide
reconciliations to relevant GAAP measures.
Unilever uses 'constant rate', and 'underlying' measures primarily for
internal performance analysis and targeting purposes. We present certain
items, percentages and movements, using constant exchange rates, which exclude
the impact of fluctuations in foreign currency exchange rates. We calculate
constant currency values by translating both the current and the prior period
local currency amounts using the prior year average exchange rates into euro,
except for the local currency of entities that operate in hyperinflationary
economies. These currencies are translated into euros using the prior year
closing exchange rate before the application of IAS 29. The table below shows
exchange rate movements in our key markets.
Annual average rate in 2023 Annual average rate in 2022
Brazilian Real (€1 = BRL) 5.405 5.414
Chinese Yuan (€1 = CNY) 7.635 7.047
Indian Rupee (€1 = INR) 89.232 82.303
Indonesia Rupiah (€1 = IDR) 16,457 15,535
Philippine Peso (€1 = PHP) 60.110 57.194
UK Pound Sterling (€1 = GBP) 0.870 0.851
US Dollar (€1 = US $) 1.081 1.050
Underlying sales growth (USG)
Underlying sales growth (USG) refers to the increase in turnover for the
period, excluding any change in turnover resulting from acquisitions,
disposals, changes in currency and price growth in excess of 26% in
hyperinflationary economies. Inflation of 26% per year compounded over three
years is one of the key indicators within IAS 29 to assess whether an economy
is deemed to be hyperinflationary. We believe this measure provides valuable
additional information on the underlying sales performance of the business and
is a key measure used internally. The impact of acquisitions and disposals
(A&D) is excluded from USG for a period of 12 calendar months from the
applicable closing date. Turnover from acquired brands that are launched in
countries where they were not previously sold is included in USG as such
turnover is more attributable to our existing sales and distribution network
than the acquisition itself. The reconciliation of changes in the GAAP measure
turnover to USG is provided in notes 3 and 4.
Underlying price growth (UPG)
Underlying price growth (UPG) is part of USG and means, for the applicable
period, the increase in turnover attributable to changes in prices during the
period. UPG therefore excludes the impact to USG due to (i) the volume of
products sold; and (ii) the composition of products sold during the period. In
determining changes in price, we exclude the impact of price growth in excess
of 26% per year in hyperinflationary economies as explained in USG above. The
measures and the related turnover GAAP measure are set out in notes 3 and 4.
Underlying volume growth (UVG)
Underlying volume growth (UVG) is part of USG and means, for the applicable
period, the increase in turnover in such period calculated as the sum of (i)
the increase in turnover attributable to the volume of products sold; and (ii)
the increase in turnover attributable to the composition of products sold
during such period. UVG therefore excludes any impact on USG due to changes in
prices. The measures and the related turnover GAAP measure are set out in
notes 3 and 4.
Non-underlying items
Several non-GAAP measures are adjusted to exclude items defined as
non-underlying due to their nature and/or frequency of occurrence.
• Non-underlying items within operating profit are: gains or
losses on business disposals, acquisition and disposal related costs,
restructuring costs, impairments and other items within operating profit
classified here due to their nature and frequency.
• Non-underlying items not in operating profit but within net
profit are: net monetary gain/(loss) arising from hyperinflationary economies
and significant and unusual items in net finance cost, share of profit/(loss)
of joint ventures and associates and taxation.
• Non-underlying items are: both non-underlying items within
operating profit and those non-underlying items not in operating profit but
within net profit.
Underlying operating profit (UOP) and underlying operating margin (UOM)
Underlying operating profit and underlying operating margin mean operating
profit and operating margin before the impact of non-underlying items within
operating profit. Underlying operating profit represents our measure of
segment profit or loss as it is the primary measure used for making decisions
about allocating resources and assessing performance of the segments. The
reconciliation of operating profit to underlying operating profit is as
follows:
€ million Full Year
(unaudited) 2023 2022
Operating profit 9,758 10,755
Non-underlying items within operating profit (see note 2) 173 (1,072)
Underlying operating profit 9,931 9,683
Turnover 59,604 60,073
Operating margin (%) 16.4 17.9
Underlying operating margin (%) 16.7 16.1
Underlying effective tax rate
The underlying effective tax rate is calculated by dividing taxation excluding
the tax impact of non-underlying items by profit before tax excluding the
impact of non-underlying items and share of net (profit)/loss of joint
ventures and associates. This measure reflects the underlying tax rate in
relation to profit before tax excluding non-underlying items before tax and
share of net profit/(loss) of joint ventures and associates. Tax impact on
non-underlying items within operating profit is the sum of the tax on each
non-underlying item, based on the applicable country tax rates and tax
treatment. This is shown in the following table:
€ million Full Year
(unaudited) 2023 2022
Taxation 2,199 2,068
Tax impact of:
Non-underlying items within operating profit((a)) 207 273
Non-underlying items not in operating profit but within net profit((a)) 12 (121)
Taxation before tax impact of non-underlying items 2,418 2,220
Profit before taxation 9,339 10,337
Share of net (profit)/loss of joint ventures and associates (231) (208)
Profit before tax excluding share of net profit/(loss) of joint ventures and 9,108 10,129
associates
Non-underlying items within operating profit before tax((a)) 173 (1,072)
Non-underlying items not in operating profit but within net profit before tax 153 164
Profit before tax excluding non-underlying items before tax and share of net 9,434 9,221
profit/(loss) of joint ventures and associates
Effective tax rate (%) 24.1 20.4
Underlying effective tax rate (%) 25.6 24.1
(a) See note 2.
Underlying earnings per share
Underlying earnings per share (underlying EPS) is calculated as underlying
profit attributable to shareholders' equity divided by the diluted average
number of ordinary shares. In calculating underlying profit attributable to
shareholders' equity, net profit attributable to shareholders' equity is
adjusted to eliminate the post-tax impact of non-underlying items. This
measure reflects the underlying earnings for each share unit of the Group.
Refer to note 6 for reconciliation of net profit attributable to shareholders'
equity to underlying profit attributable to shareholders' equity.
Constant underlying EPS
Constant underlying earnings per share (constant underlying EPS) is calculated
as underlying profit attributable to shareholders' equity at constant exchange
rates and excluding the impact of both translational hedges and price growth
in excess of 26% per year in hyperinflationary economies divided by the
diluted average number of ordinary shares. This measure reflects the
underlying earnings for each share unit of the Group in constant exchange
rates.
The reconciliation of underlying profit attributable to shareholders' equity
to constant underlying earnings attributable to shareholders' equity and the
calculation of constant underlying EPS is as follows:
€ million Full Year
(unaudited) 2023 2022
Underlying profit attributable to shareholders' equity (see note 6) 6,588 6,568
Impact of translation from current to constant exchange rates and 992 (10)
translational hedges
Impact of price growth in excess of 26% per year in hyperinflationary (378) -
economies
Constant underlying earnings attributable to shareholders' equity 7,202 6,558
Diluted average number of share units (millions of units) 2,532.4 2,559.8
Constant underlying EPS (€) 2.84 2.56
Net debt
Net debt is a measure that provides valuable additional information on the
summary presentation of the Group's net financial liabilities and is a measure
in common use elsewhere. Net debt is defined as the excess of total financial
liabilities, excluding trade payables and other current liabilities, over
cash, cash equivalents and other current financial assets, excluding trade and
other current receivables, and non-current financial asset derivatives that
relate to financial liabilities.
The reconciliation of total financial liabilities to net debt is as follows:
€ million Full Year
(unaudited) 2023 2022
Total financial liabilities (29,622) (29,488)
Current financial liabilities (5,087) (5,775)
Non-current financial liabilities (24,535) (23,713)
Cash and cash equivalents as per balance sheet 4,159 4,326
Cash and cash equivalents as per cash flow statement 4,045 4,225
Add: bank overdrafts deducted therein 116 101
Less: cash and cash equivalents held for sale (2) -
Other current financial assets 1,731 1,435
Non-current financial asset derivatives that relate to financial liabilities 75 51
Net debt (23,657) (23,676)
Free cash flow (FCF)
Within the Unilever Group, free cash flow (FCF) is defined as cash flow from
operating activities, less income taxes paid, net capital expenditure and net
interest payments. It does not represent residual cash flows entirely
available for discretionary purposes; for example, the repayment of principal
amounts borrowed is not deducted from FCF. FCF reflects an additional way of
viewing our liquidity that we believe is useful to investors because it
represents cash flows that could be used for distribution of dividends,
repayment of debt or to fund our strategic initiatives, including
acquisitions, if any.
The reconciliation of cash flow from operating activities to FCF is as
follows:
€ million Full Year
(unaudited) 2023 2022
Cash flow from operating activities 11,561 10,089
Income tax paid (2,135) (2,807)
Net capital expenditure (1,703) (1,627)
Net interest paid (632) (457)
Free cash flow 7,091 5,198
Net cash flow (used in)/from investing activities (2,294) 2,453
Net cash flow used in financing activities (7,193) (8,890)
Cash conversion
Unilever defines cash conversion as free cash flow excluding tax on disposal
as a proportion of net profit, excluding P&L on disposal and income from
JV, associates and non-current investments. This reflects our ability to
convert profit to cash.
€ million Full Year
(unaudited) 2023 2022
Net profit 7,140 8,269
Gain on disposal of group companies (489) (2,335)
Share of net profit of joint ventures and associates (231) (208)
Other loss/(income) from non-current investments and associates 22 (24)
Tax on gain on disposal of group companies (69) (1)
Net profit excluding P&L on disposals, JV, associates, NCI 6,373 5,701
Free cash flow 7,091 5,198
Cash impact of tax on disposal 14 330
Free cash flow excluding cash impact of tax on disposal 7,105 5,528
Cash conversion (%) 111 97
Underlying return on invested capital (ROIC)
Underlying return on invested capital (ROIC) is a measure of the return
generated on capital invested by the Group. The measure provides a guard rail
for long-term value creation and encourages compounding reinvestment within
the business and discipline around acquisitions with low returns and long
payback. Underlying ROIC is calculated as underlying operating profit after
tax divided by the annual average of: goodwill, intangible assets, property,
plant and equipment, net assets held for sale, inventories, trade and other
current receivables, and trade payables and other current liabilities.
€ million Full Year
(unaudited) 2023 2022
Operating profit 9,758 10,755
Non-underlying items within operating profit (see note 2) 173 (1,072)
Underlying operating profit before tax 9,931 9,683
Tax on underlying operating profit((a)) (2,545) (2,331)
Underlying operating profit after tax 7,386 7,352
Goodwill 21,109 21,609
Intangible assets 18,357 18,880
Property, plant and equipment 10,707 10,770
Net assets held for sale 516 24
Inventories 5,119 5,931
Trade and other current receivables 5,775 7,056
Trade payables and other current liabilities (16,857) (18,023)
Period-end invested capital 44,726 46,247
Average invested capital for the period 45,487 46,005
Underlying return on invested capital (%) 16.2 16.0
(a) Tax on underlying operating profit is calculated as underlying operating
profit before tax multiplied by the underlying effective tax rate of 25.6%
(2022: 24.1%) which is shown on page 14.
Cautionary Statement
This announcement may contain forward-looking statements within the meaning of
the securities laws of certain jurisdictions, including 'forward-looking
statements' within the meaning of the United States Private Securities
Litigation Reform Act of 1995. Words and terminology such as 'will', 'aim',
'expects', 'anticipates', 'intends', 'looks', 'believes', 'vision', 'will
continue', 'should', 'would be', 'seeks', or the negative of these terms and
other similar expressions of future performance or results, and their
negatives, are intended to identify such forward-looking statements.
Forward-looking statements also include, but are not limited to, statements
and information regarding the Unilever Group's (the 'Group') emissions
reduction targets and other climate change related matters (including actions,
potential impacts and risks associated therewith). These forward-looking
statements appear in a number of places throughout this document and are based
upon the intentions, beliefs, current expectations and assumptions regarding
anticipated developments and other factors affecting the Group. By their
nature, forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that may or may not occur in
the future. They are not historical facts, nor are they guarantees of future
performance or outcomes.
Because these forward-looking statements involve risks and uncertainties,
there are important factors that could cause actual results to differ
materially from those expressed or implied by these forward-looking
statements. In addition, even if the results are consistent with the
forward-looking statements contained in this announcement, those results may
not be indicative of results in subsequent periods. Among other risks and
uncertainties, the material or principal factors which could cause actual
results to differ materially are: Unilever's global brands not meeting
consumer preferences; Unilever's ability to innovate and remain competitive;
Unilever's investment choices in its portfolio management; the effect of
climate change on Unilever's business; Unilever's ability to find sustainable
solutions to its plastic packaging; significant changes or deterioration in
customer relationships; the recruitment and retention of talented employees;
disruptions in our supply chain and distribution; increases or volatility in
the cost of raw materials and commodities; the production of safe and high
quality products; secure and reliable IT infrastructure; execution of
acquisitions, divestitures and business transformation projects; economic,
social and political risks and natural disasters; financial risks; failure to
meet high and ethical standards; and managing regulatory, tax and legal
matters. A number of these risks have increased as a result of the
Russia/Ukraine war. These forward-looking statements speak only as of the date
of this document. Except as required by any applicable law or regulation, the
Group expressly disclaims any intention or obligation or undertaking to
release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Group's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based. All subsequent written and oral forward-looking statements
attributable to either the Group or to persons acting on its behalf are
expressly qualified in their entirety by the cautionary statements referred to
above. Further details of potential risks and uncertainties affecting the
Group are described in the Group's filings with the London Stock Exchange,
Euronext Amsterdam and the US Securities and Exchange Commission, including in
the Annual Report on Form 20-F 2022 and the Unilever Annual Report and
Accounts 2022.
Enquiries
Media: Media Relations Team Investors: Investor Relations Team
UK +44 78 3304 8414 gemma.shaw@unilever.com investor.relations@unilever.com
or +44 77 7999 9683 jonathan.sibun@teneo.com
NL +31 62 191 3705 kiran.hofker@unilever.com
or +31 61 500 8293 fleur-van.bruggen@unilever.com
After the conference call on 8 February 2024 at 8:00 AM (UK time), the webcast
of the presentation will be available at
www.unilever.com/investor-relations/results-and-presentations/latest-results
(www.unilever.com/investor-relations/results-and-presentations/latest-results)
.
This Results Presentation has been submitted to the FCA National Storage
Mechanism and is available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Consolidated income statement
€ million Full Year
(unaudited) 2023 2022 Change
Turnover 59,604 60,073 (0.8)%
Operating profit 9,758 10,755 (9.3)%
Net finance costs (486) (493)
Pensions and similar obligations 110 44
Finance income 442 281
Finance costs (1,038) (818)
Net monetary loss arising from hyperinflationary economies (142) (157)
Share of net profit of joint ventures and associates 231 208
Other (loss)/income from non-current investments and associates (22) 24
Profit before taxation 9,339 10,337 (9.7)%
Taxation (2,199) (2,068)
Net profit 7,140 8,269 (13.7)%
Attributable to:
Non-controlling interests 653 627
Shareholders' equity 6,487 7,642 (15.1)%
Earnings per share
Basic earnings per share (euros) 2.58 3.00 (14.0)%
Diluted earnings per share (euros) 2.56 2.99 (14.2)%
Consolidated statement of comprehensive income
€ million Full Year
(unaudited) 2023 2022
Net profit 7,140 8,269
Other comprehensive income
Items that will not be reclassified to profit or loss, net of tax:
Gains/(losses) on equity instruments measured at fair value through other (28) 36
comprehensive income
Remeasurement of defined benefit pension plans (510) (473)
Items that may be reclassified subsequently to profit or loss, net of tax:
Losses on cash flow hedges (27) (91)
Currency retranslation (losses)/gains (1,461) 614
Total comprehensive income 5,114 8,355
Attributable to:
Non-controlling interests 524 507
Shareholders' equity 4,590 7,848
Consolidated statement of changes in equity
(unaudited)
€ million Called Share Unification Other Retained Total Non- Total
up share premium reserve reserves profit controlling equity
capital account interest
31 December 2021 92 52,844 (73,364) (9,210) 46,745 17,107 2,639 19,746
Hyperinflation restatement to 1 January 2022 (Turkey) - - - - 154 154 - 154
Adjusted opening balance 92 52,844 (73,364) (9,210) 46,899 17,261 2,639 19,900
Profit or loss for the period - - - - 7,642 7,642 627 8,269
Other comprehensive income, net of tax:
Gains/(losses) on:
Equity instruments - - - 45 - 45 (9) 36
Cash flow hedges - - - (92) - (92) 1 (91)
Remeasurements of defined benefit pension plans - - - - (474) (474) 1 (473)
Currency retranslation gains/(losses)((a)) - - - 240 487 727 (113) 614
Total comprehensive income - - - 193 7,655 7,848 507 8,355
Dividends on ordinary capital - - - - (4,356) (4,356) - (4,356)
Repurchase of shares((b)) - - - (1,509) - (1,509) - (1,509)
Movements in treasury shares((c)) - - - 106 (137) (31) - (31)
Share-based payment credit((d)) - - - - 177 177 - 177
Dividends paid to non-controlling interests - - - - - - (572) (572)
Hedging loss transferred to non-financial assets - - - (126) - (126) (1) (127)
Other movements in equity((e)) - - - (258) 15 (243) 107 (136)
31 December 2022 92 52,844 (73,364) (10,804) 50,253 19,021 2,680 21,701
Profit or loss for the period - - - - 6,487 6,487 653 7,140
Other comprehensive income, net of tax:
Gains/(losses) on:
Equity instruments - - - (27) - (27) (1) (28)
Cash flow hedges - - - (27) - (27) - (27)
Remeasurements of defined benefit pension plans - - - - (508) (508) (2) (510)
Currency retranslation gains/(losses)((f)) - - - (1,629) 294 (1,335) (126) (1,461)
Total comprehensive income - - - (1,683) 6,273 4,590 524 5,114
Dividends on ordinary capital - - - - (4,327) (4,327) - (4,327)
Cancellation of treasury shares((g)) (4) - - 5,282 (5,278) - - -
Repurchase of shares((b)) - - - (1,507) - (1,507) - (1,507)
Movements in treasury shares((c)) - - - 75 (98) (23) - (23)
Share-based payment credit((d)) - - - - 212 212 - 212
Dividends paid to non-controlling interests - - - - - - (521) (521)
Hedging gain/(loss) transferred to non-financial assets - - - 117 - 117 - 117
Other movements in equity - - - 2 17 19 (21) (2)
31 December 2023 88 52,844 (73,364) (8,518) 47,052 18,102 2,662 20,764
(a) Includes a hyperinflation adjustment of €514 million in relation to
Argentina and Turkey.
(b) Repurchase of shares reflects the cost of acquiring ordinary shares as
part of the share buyback program announced on 10 February 2022.
(c) Includes purchases and sales of treasury shares, other than the share
buyback programme and the transfer from treasury shares to retained profit of
share-settled schemes arising from prior years and differences between
purchase and grant price of share awards.
(d) The share-based payment credit relates to the non-cash charge recorded
against operating profit in respect of the fair value of share options and
awards granted to employees.
(e) Includes the following items related to the acquisition of Nutrafol:
€(269) million non-controlling interest purchase option in other reserves
and €99 million non-controlling interest recognised on acquisition.
(f) Includes a hyperinflation adjustment of €308 million in relation to
Argentina and Turkey.
(g) During 2023, 112,746,434 PLC ordinary shares held as treasury shares
were cancelled. The amount paid to repurchase these shares was initially
recognised in other reserves and is transferred to retained profit on
cancellation.
Consolidated balance sheet
(unaudited)
€ million As at 31 December 2023 As at 31 December 2022
Non-current assets
Goodwill 21,109 21,609
Intangible assets 18,357 18,880
Property, plant and equipment 10,707 10,770
Pension asset for funded schemes in surplus 3,781 4,260
Deferred tax assets 1,113 1,049
Financial assets 1,386 1,154
Other non-current assets 911 942
57,364 58,664
Current assets
Inventories 5,119 5,931
Trade and other current receivables 5,775 7,056
Current tax assets 427 381
Cash and cash equivalents 4,159 4,326
Other financial assets 1,731 1,435
Assets held for sale 691 28
17,902 19,157
Total assets 75,266 77,821
Current liabilities
Financial liabilities 5,087 5,775
Trade payables and other current liabilities 16,857 18,023
Current tax liabilities 851 877
Provisions 537 748
Liabilities held for sale 175 4
23,507 25,427
Non-current liabilities
Financial liabilities 24,535 23,713
Non-current tax liabilities 384 94
Pensions and post-retirement healthcare liabilities:
Funded schemes in deficit 351 613
Unfunded schemes 1,029 1,078
Provisions 563 550
Deferred tax liabilities 3,995 4,375
Other non-current liabilities 138 270
30,995 30,693
Total liabilities 54,502 56,120
Equity
Shareholders' equity 18,102 19,021
Non-controlling interests 2,662 2,680
Total equity 20,764 21,701
Total liabilities and equity 75,266 77,821
Consolidated cash flow statement
(unaudited) Full Year
€ million 2023 2022
Net profit 7,140 8,269
Taxation 2,199 2,068
Share of net profit of joint ventures/associates and other (income)/loss from (209) (232)
non-current investments and associates
Net monetary loss arising from hyperinflationary economies 142 157
Net finance costs 486 493
Operating profit 9,758 10,755
Depreciation, amortisation and impairment 1,579 1,946
Changes in working capital 814 (422)
Inventories 340 (1,398)
Trade and other receivables 768 (1,852)
Trade payables and other liabilities (294) 2,828
Pensions and similar obligations less payments (281) (119)
Provisions less payments (185) 203
Elimination of profits on disposals (433) (2,335)
Non-cash charge for share-based compensation 212 177
Other adjustments 97 (116)
Cash flow from operating activities 11,561 10,089
Income tax paid (2,135) (2,807)
Net cash flow from operating activities 9,426 7,282
Interest received 267 287
Purchase of intangible assets (243) (253)
Purchase of property, plant and equipment (1,502) (1,456)
Disposal of property, plant and equipment 42 82
Acquisition of businesses and investments in joint ventures and associates (704) (979)
Disposal of businesses, joint ventures and associates 436 4,622
Acquisition of other non-current investments (533) (170)
Disposal of other non-current investments 62 266
Dividends from joint ventures, associates and other non-current investments 239 185
(Purchase)/sale of financial assets (358) (131)
Net cash flow (used in)/from investing activities (2,294) 2,453
Dividends paid on ordinary share capital (4,363) (4,329)
Interest paid (899) (744)
Net change in short-term borrowings (570) (545)
Additional financial liabilities 4,972 7,776
Repayment of financial liabilities (3,905) (8,440)
Capital element of lease rental payments (394) (518)
Repurchase of shares (1,507) (1,509)
Other financing activities (527) (581)
Net cash flow used in financing activities (7,193) (8,890)
Net (decrease)/increase in cash and cash equivalents (61) 845
Cash and cash equivalents at the beginning of the period 4,225 3,387
Effect of foreign exchange rate changes (119) (7)
Cash and cash equivalents at the end of the period 4,045 4,225
Notes to the condensed consolidated financial statements
(unaudited)
1. Accounting information and policies
Except as set out below the accounting policies and methods of computation are
consistent with the year ended 31 December 2022. In conformity with the
requirements of the Companies Act 2006, the condensed consolidated preliminary
financial statements have been prepared based on the International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standard
Board (IASB) and UK-adopted international accounting standards.
The condensed consolidated financial statements are shown at current exchange
rates, and percentage year-on-year changes are shown to facilitate comparison.
The consolidated income statement on page 18, the consolidated statement of
comprehensive income on page 18, the consolidated statement of changes in
equity on page 19 and the consolidated cash flow statement on page 21 are
translated at exchange rates current in each period. The balance sheet on page
20 is translated at period-end rates of exchange.
The condensed consolidated financial statements attached do not constitute the
full financial statements within the meaning of Section 434 of the UK
Companies Act 2006, which will be finalised and delivered to the Registrar of
Companies in due course. Full accounts for Unilever for the year ended 31
December 2022 have been delivered to the Registrar of Companies; the auditors'
reports on these accounts were unqualified, did not include a reference to any
matters by way of emphasis and did not contain a statement under Section 498
(2) or Section 498 (3) of the UK Companies Act 2006.
New accounting standards
On 1 January 2023, the Group adopted IFRS 17 'Insurance Contracts'. The
standard introduces a new model for accounting for insurance contracts. We
have reviewed existing arrangements and concluded that IFRS 17 does not impact
the condensed consolidated financial statements.
On 23 May 2023, amendments to IAS 12 'Income Taxes' came into effect relating
to International Tax Reform (Pillar Two). These amendments clarify when an
entity shall disclose qualitative and quantitative information about its
exposure to Pillar Two income taxes. Effective immediately, the amendments
also provide a temporary mandatory exemption from deferred tax accounting.
There is no impact on the condensed consolidated financial statements.
All other new standards or amendments issued by the IASB and UK Endorsement
Board that are effective or not yet effective, are either not applicable or
not material to the Group.
2. Significant items within the income statement
Non-underlying items
These include non-underlying items within operating profit and non-underlying
items not in operating profit but within net profit:
• Non-underlying items within operating profit are gains or losses
on business disposals, acquisition and disposal related costs, restructuring
costs, impairments and other items within operating profit classified here due
to their nature and frequency.
• Non-underlying items not in operating profit but within net
profit are net monetary gain/(loss) arising from hyperinflationary economies
and significant and unusual items in net finance cost, share of profit/(loss)
of joint ventures and associates and taxation.
Restructuring costs are charges associated with activities planned by
management that significantly change either the scope of the business or the
manner in which it is conducted.
Full Year
€ million 2023 2022
Acquisition and disposal-related credits/(costs)((a)) (242) (50)
Gain/(loss) on disposal of group companies((b)) 489 2,335
Restructuring costs((c)) (499) (777)
Impairments((d)) (1) (221)
Other((e)) 80 (215)
Non-underlying items within operating profit before tax (173) 1,072
Tax on non-underlying items within operating profit 207 273
Non-underlying items within operating profit after tax 34 1,345
Interest related to the UK tax audit of intangible income and centralised (11) (7)
services
Net monetary loss arising from hyperinflationary economies (142) (157)
Non-underlying items not in operating profit but within net profit before tax (153) (164)
Tax impact of non-underlying items not in operating profit but within net
profit:
Taxes related to separation of Ekaterra (4) (35)
Taxes related to the UK tax audit of intangible income and centralised (5) (5)
services
Hyperinflation adjustment for Argentina and Turkey deferred tax 21 (81)
Non-underlying items not in operating profit but within net profit after tax (141) (285)
Non-underlying items after tax((f)) (107) 1,060
Attributable to:
Non-controlling interests (6) (14)
Shareholders' equity (101) 1,074
(a) 2023 includes a charge of €104 million for the revaluation of the
minority interest liability of Nutrafol, €43 million relating to the
disposal of Elida Beauty and €10 million (2022: €42 million) relating to
the disposal of the global tea business.
(b) 2023 includes a gain of €497 million related to the disposal of Suave
business in North America. 2022 includes a gain of €2,303 million related to
the disposal of the global tea business.
(c) Restructuring costs are comprised of strategic organisational change
programmes (including Compass), and transformational technology and supply
chain projects.
(d) 2022 includes an impairment charge of €192 million relating to Dollar
Shave Club.
(e) 2023 includes €28 million net release after utilisation to the
provision (2022: €89 million charge) relating to a product recall and market
withdrawal by The Laundress, €107 million release (2022: €82 million
charge) relating to legal provisions for ongoing competition investigations
and €54 million charge (2022: €42 million charge) relating to our
businesses in Russia and Ukraine.
(f) Non-underlying items after tax is calculated as non-underlying items
within operating profit after tax plus non-underlying items not in operating
profit but within net profit after tax.
3. Segment information - Business Groups
Fourth Quarter Beauty & Wellbeing Personal Care Home Care Nutrition Ice Cream Total
Turnover (€ million)
2022 3,255 3,522 3,162 3,468 1,204 14,611
2023 3,181 3,404 2,974 3,416 1,202 14,177
Change (%) (2.3) (3.4) (5.9) (1.5) (0.2) (3.0)
Impact of:
Acquisitions (%) 0.1 - - - 4.0 0.3
Disposals (%) (2.2) (1.8) - (0.4) - (1.0)
Currency-related items (%), of which: (7.5) (7.5) (7.5) (5.6) (3.6) (6.7)
Exchange rates changes (%) (9.1) (10.2) (11.3) (7.5) (4.3) (9.1)
Extreme price growth in hyperinflationary markets* (%) 1.8 3.0 4.3 2.1 0.7 2.6
Underlying sales growth (%) 7.9 6.4 1.7 4.7 (0.4) 4.7
Price* (%) 1.5 3.8 0.9 5.9 0.4 2.8
Volume (%) 6.3 2.5 0.8 (1.1) (0.8) 1.8
Full Year Beauty & Wellbeing Personal Care Home Care Nutrition Ice Cream Total
Turnover (€ million)
2022 12,250 13,636 12,401 13,898 7,888 60,073
2023 12,466 13,829 12,181 13,204 7,924 59,604
Change (%) 1.8 1.4 (1.8) (5.0) 0.5 (0.8)
Impact of:
Acquisitions (%) 1.9 - - - 0.9 0.5
Disposals (%) (1.7) (0.9) - (6.9) - (2.1)
Currency-related items (%), of which: (6.2) (6.1) (7.2) (5.2) (2.7) (5.7)
Exchange rates changes (%) (7.5) (8.0) (10.3) (6.8) (5.4) (7.8)
Extreme price growth in hyperinflationary markets* (%) 1.5 2.1 3.4 1.7 2.8 2.2
Underlying sales growth (%) 8.3 8.9 5.9 7.7 2.3 7.0
Price* (%) 3.8 5.5 6.8 10.1 8.8 6.8
Volume (%) 4.4 3.2 (0.9) (2.2) (6.0) 0.2
Operating profit (€ million)
2022 2,154 2,264 1,064 4,497 776 10,755
2023 2,209 2,957 1,419 2,413 760 9,758
Underlying operating profit (€ million)
2022 2,292 2,679 1,344 2,449 919 9,683
2023 2,331 2,792 1,496 2,460 852 9,931
Operating margin (%)
2022 17.6 16.6 8.6 32.4 9.8 17.9
2023 17.7 21.4 11.6 18.3 9.6 16.4
Underlying operating margin (%)
2022 18.7 19.6 10.8 17.6 11.7 16.1
2023 18.7 20.2 12.3 18.6 10.8 16.7
*Underlying price growth in excess of 26% per year in hyperinflationary
economies has been excluded when calculating the price growth in the tables
above, and an equal and opposite amount is shown as extreme price growth in
hyperinflationary markets.
Turnover growth is made up of distinct individual growth components namely
underlying sales, currency impact, acquisitions and disposals. Turnover growth
is arrived at by multiplying these individual components on a compounded basis
as there is a currency impact on each of the other components. Accordingly,
turnover growth is more than just the sum of the individual components.
Underlying operating profit represents our measure of segment profit or loss
as it is the primary measure used for the purpose of making decisions about
allocating resources and assessing performance of segments. Underlying
operating margin is calculated as underlying operating profit divided by
turnover.
4. Segment information - Geographical area
Fourth Quarter Asia Pacific Africa The Americas Europe Total
Turnover (€ million)
2022 6,640 5,374 2,597 14,611
2023 6,119 5,388 2,670 14,177
Change (%) (7.9) 0.3 2.8 (3.0)
Impact of:
Acquisitions (%) - 0.8 - 0.3
Disposals (%) (0.2) (2.6) (0.1) (1.0)
Currency-related items (%), of which: (9.4) (6.9) 0.4 (6.7)
Exchange rates changes (%) (10.6) (11.7) 0.4 (9.1)
Extreme price growth in hyperinflationary markets* (%) 1.4 5.4 - 2.6
Underlying sales growth (%) 1.9 9.6 2.5 4.7
Price* (%) 1.1 2.0 9.4 2.8
Volume (%) 0.7 7.4 (6.3) 1.8
Full Year Asia Pacific Africa The Americas Europe Total
Turnover (€ million)
2022 27,504 20,905 11,664 60,073
2023 26,234 21,531 11,839 59,604
Change (%) (4.6) 3.0 1.5 (0.8)
Impact of:
Acquisitions (%) - 1.4 - 0.5
Disposals (%) (1.9) (2.6) (1.9) (2.1)
Currency-related items (%), of which: (8.8) (4.5) (0.6) (5.7)
Exchange rates changes (%) (10.5) (8.0) (0.6) (7.8)
Extreme price growth in hyperinflationary markets* (%) 2.0 3.8 - 2.2
Underlying sales growth (%) 6.5 9.3 4.1 7.0
Price* (%) 5.3 5.7 12.8 6.8
Volume (%) 1.1 3.4 (7.7) 0.2
*Underlying price growth in excess of 26% per year in hyperinflationary
economies has been excluded when calculating the price growth in the tables
above, and an equal and opposite amount is shown as extreme price growth in
hyperinflationary markets.
5. Taxation
The effective tax rate for 2023 is 24.1% compared with 20.4% in 2022. The
increase is primarily driven by the favourable impact of the ekaterra Tea
disposal which benefited from the participation exemption in the Netherlands
in 2022. The increase was partially offset by a benefit related to the
disposal of Dollar Shave Club in 2023.
6. Earnings per share
The earnings per share calculations are based on the average number of share
units representing the ordinary shares of PLC in issue during the period, less
the average number of shares held as treasury shares.
In calculating diluted earnings per share and underlying earnings per share, a
number of adjustments are made to the number of shares, principally the
exercise of share plans by employees.
Earnings per share for total operations for the twelve months were calculated
as follows:
Full Year
2023 2022
EPS - Basic
Net profit attributable to shareholders' equity (€ million) 6,487 7,642
Average number of shares (millions of share units) 2,515.9 2,548.2
EPS - basic (€) 2.58 3.00
EPS - Diluted
Net profit attributable to shareholders' equity (€ million) 6,487 7,642
Adjusted average number of shares (millions of share units) 2,532.4 2,559.8
EPS - diluted (€) 2.56 2.99
Underlying EPS
Net profit attributable to shareholders' equity (€ million) 6,487 7,642
Post-tax impact of non-underlying items attributable to shareholders' equity 101 (1,074)
(see note 2)
Underlying profit attributable to shareholders' equity 6,588 6,568
Adjusted average number of shares (millions of share units) 2,532.4 2,559.8
Underlying EPS - diluted (€) 2.60 2.57
In calculating underlying earnings per share, net profit attributable to
shareholders' equity is adjusted to eliminate the post-tax impact of
non-underlying items.
During the period the following movements in shares have taken place:
Millions
Number of shares at 31 December 2022 (net of treasury shares) 2,529.0
Shares repurchased under the share buyback programme (31.7)
Net movements in shares under incentive schemes 1.7
Number of shares at 31 December 2023 (net of treasury shares) 2,499.0
7. Acquisitions and disposals
In 2023, the Group completed the business acquisitions and disposals as listed
below. The net consideration for acquisitions in 2023 is €675 million (2022:
€811 million for acquisitions completed during that year).
Deal completion date Acquired/disposed business
10 January 2023 Acquired 51% of Zywie Ventures Private Limited ("OZiva"), a leading
plant-based, and clean-label consumer wellness brand focused on the need
spaces such as Lifestyle Protein, Hair & Beauty Supplements and Women's
health.
1 May 2023 Sold Suave brand in North America to Yellow Wood Partners LLC. The Suave
beauty and personal care brand includes hair care, skin care, skin cleansing
and deodorant products.
1 August 2023 Acquired Yasso Holdings, Inc., a premium frozen Greek yogurt brand in the
United States offering a high-quality range of low-calorie yet indulgent
products. The acquisition is aligned to the premiumisation strategy of
Unilever's Ice Cream Business Group.
1 November 2023 Sold Dollar Shave Club to Nexus Capital Management LP.
On 1 May 2023, Unilever sold the North America Suave business to Yellow Wood
Partners LLC for consideration of €592 million. A gain on disposal of
€497 million has been recognised as a non-underlying item (see note 2).
On 18 December 2023, Unilever announced that it has received a binding offer
from Yellow Wood Partners LLC to acquire Elida Beauty. Elida Beauty comprises
more than 20 beauty and personal care brands including Q-Tips, Caress, Timotei
and Tigi. Completion is expected by mid-2024.
On 22 December 2023, the Group announced it had signed an agreement to acquire
K18, a premium biotech haircare brand in the US. The transaction completed on
1 February 2024 and the provisional accounting for this transaction, including
the valuation of assets and liabilities acquired, is expected to be completed
by H1 2024. This acquisition is another step towards the optimisation of
Unilever's portfolio into premium segments.
Acquisitions
Effect on consolidated income statement
The acquisition deals completed in 2023 have contributed €82 million to the
Group turnover and €18 million to the Group operating profit since the date
of acquisition. If the acquisition deals completed in 2023 had all taken place
at the beginning of the year, Group turnover would have been €59,709
million, and Group operating profit would have been €9,780 million.
Effect on consolidated balance sheet
The following table summarises the consideration and net assets acquired in
2023. The fair values currently used for opening balances are provisional.
These balances remain provisional due to there being outstanding relevant
information in regard to facts and circumstances that existed as of the
acquisition date and/or where valuation work is still ongoing.
€ million Total 2023
Intangible assets 430
Other non-current assets 4
Trade and other receivables 25
Other current assets((a)) 56
Non-current liabilities((b)) (114)
Current liabilities (33)
Net assets acquired 368
Non-controlling interest (20)
Goodwill 327
Total consideration 675
Of which:
Cash consideration paid 652
Deferred consideration 23
(a) Other current assets include inventories of €18 million and cash and
cash equivalents of €30 million.
(b) Non-current liabilities include deferred tax of €109 million.
Disposals
Total consideration for 2023 disposals is €578 million (2022: €4,606
million for disposals completed during that year). The following table sets
out the effect of the disposals in 2023 and comparative year on the
consolidated balance sheet. The results of disposed businesses are included in
the consolidated financial statements up until their date of disposal.
€ million 2023 2022
Goodwill and intangible assets((a)) 56 948
Other non-current assets((b)) 55 1,075
Current assets((c)) 108 833
Liabilities((d)) (144) (649)
Net assets sold 75 2,207
(Gain)/loss on recycling of currency retranslation on disposal 14 65
Profit/(loss) on sale attributable to Unilever 489 2,334
Consideration 578 4,606
Of which:
Cash 472 4,606
Cash balances of businesses sold 5 20
Non-cash items and deferred consideration 101 (20)
(a) 2023 mainly related to the disposals of Suave and Dollar Shave Club.
(b) 2023 includes property, plant and equipment of €42 million mainly
related to the disposal of Dollar Shave Club.
(c) 2023 includes inventories of €88 million related to the disposals of
Suave and Dollar Shave Club.
(d) 2023 includes €123 million of trade payables.
8. Share buyback
On 10 February 2022, we announced a share buyback programme of up to €3
billion to be completed over 2022 and 2023. During 2023, the Group repurchased
31,734,256 ordinary shares which were held by Unilever as treasury shares.
Consideration paid for the repurchase of shares including transaction costs
was €1,507 million and was recognised in other reserves.
9. Financial instruments
The Group's Treasury function aims to protect the Group's financial
investments, while maximising returns. The fair value of financial assets is
the same as the carrying amount for 2023 and 2022. The Group's cash resources
and
other financial assets are shown below.
31 December 2023 31 December 2022
€ million Current Non-current Total Current Non-current Total
Cash and cash equivalents
Cash at bank and in hand 2,862 - 2,862 2,553 - 2,553
Short-term deposits((a)) 1,181 - 1,181 1,743 - 1,743
Other cash equivalents 116 - 116 30 - 30
4,159 - 4,159 4,326 - 4,326
Other financial assets
Financial assets at amortised cost((b)) 961 454 1,415 772 232 1,004
Financial assets at fair value through other comprehensive income((c)) 151 458 609 - 407 407
Financial assets at fair value through profit or loss:
Derivatives 37 75 112 238 51 289
Other((d)) 582 399 981 425 464 889
1,731 1,386 3,117 1,435 1,154 2,589
Total financial assets((e)) 5,890 1,386 7,276 5,761 1,154 6,915
(a) Short-term deposits typically have a maturity of up to 3 months.
(b) Current financial assets at amortised cost include short term deposits
with banks with maturities longer than three months and loans to joint venture
entities. Non-current financial assets at amortised cost include judicial
deposits of €227 million (2022: €199 million).
(c) Included within non-current financial assets at fair value through
other comprehensive income are equity investments.
(d) Other financial assets at fair value through profit or loss include
money market funds, marketable securities, other capital market instruments
and investments in financial institutions in North America, North Asia, South
Asia and Europe.
(e) Financial assets exclude trade and other current receivables.
The Group is exposed to the risks of changes in fair value of its financial
assets and liabilities. The following tables summarise the fair values and
carrying amounts of financial instruments and the fair value calculations by
category.
Fair value Carrying amount
€ million As at 31 December 2023 As at 31 December 2022 As at 31 December 2023 As at 31 December 2022
Financial assets
Cash and cash equivalents 4,159 4,326 4,159 4,326
Financial assets at amortised cost 1,415 1,004 1,415 1,004
Financial assets at fair value through other comprehensive income 609 407 609 407
Financial assets at fair value through profit and loss:
Derivatives 112 289 112 289
Other 981 889 981 889
7,276 6,915 7,276 6,915
Financial liabilities
Bank loans and overdrafts (506) (519) (506) (519)
Bonds and other loans (26,112) (25,136) (26,692) (26,512)
Lease liabilities (1,395) (1,408) (1,395) (1,408)
Derivatives (494) (631) (494) (631)
Other financial liabilities (535) (418) (535) (418)
(29,042) (28,112) (29,622) (29,488)
For assets and liabilities which are carried at fair value, the classification
of fair value calculations by category is summarised below:
As at 31 December 2023 As at 31 December 2022
€ million Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets at fair value
Financial assets at fair value through other comprehensive income 163 4 442 5 3 399
Financial assets at fair value through profit or loss:
Derivatives((a)) - 149 - - 378 -
Other 582 - 399 428 - 461
Liabilities at fair value
Derivatives((b)) - (559) - - (784) -
Contingent consideration - - (157) - - (164)
(a) Includes €37 million (2022: €89 million) derivatives, reported
within trade receivables, that hedge trading activities.
(b) Includes €(65) million (2022: €(153) million) derivatives, reported
within trade creditors, that hedge trading activities.
There were no significant changes in classification of fair value of financial
assets and financial liabilities since 31 December 2022. There were also no
significant movements between the fair value hierarchy classifications since
31 December 2022.
The fair value of trade receivables and payables is considered to be equal to
the carrying amount of these items due to their short-term nature. The fair
value of financial assets and financial liabilities (excluding listed bonds)
is considered to be same as the carrying amount for 2023 and 2022.
Calculation of fair values
The fair values of the financial assets and liabilities are defined as the
price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Methods and assumptions used to estimate
the fair values are consistent with those used in the year ended 31 December
2022.
10. Assets and liabilities held for sale
On 18 December 2023, Unilever announced that it has received a binding offer
from Yellow Wood Partners LLC to acquire Elida Beauty. Elida Beauty comprises
more than 20 beauty and personal care brands including Q-Tips, Caress, Timotei
and Tigi. As a result, the assets and liabilities of Elida Beauty have been
classified as held for sale as at 31 December 2023. Following the
classification of assets and liabilities as held for sale, they are recognised
as current on the balance sheet.
€ million 2023 2022
Property, plant and equipment held for sale((a)) 2 4
Non-current assets
Goodwill and intangibles 534 2
Property, plant and equipment 21 20
Other non-current assets 1 -
556 22
Current assets
Inventories 80 -
Trade and other receivables 47 2
Current tax assets 4 -
Cash and cash equivalents 2 -
133 2
Assets held for sale 691 28
Current liabilities
Trade payables and other current liabilities 24 2
Current tax liabilities 2 -
Financial liabilities due within one year - 2
26 4
Non-current liabilities
Financial liabilities due after one year 4 -
Deferred tax liabilities 145 -
149 -
Liabilities held for sale 175 4
(a) Includes manufacturing assets held for sale.
11. Dividends
The Board has declared a quarterly interim dividend for Q4 2023 of £0.3647
per Unilever PLC ordinary share or €0.4268 per Unilever PLC ordinary share
at the applicable exchange rate issued by WM/Reuters on 6 February 2024.
The following amounts will be paid in respect of this quarterly interim
dividend on the relevant payment date:
Per Unilever PLC ordinary share (traded on the London Stock Exchange): £0.3647
Per Unilever PLC ordinary share (traded on Euronext in Amsterdam): €0.4268
Per Unilever PLC American Depositary Receipt: US$0.4582
The euro and US dollar amounts above have been determined using the applicable
exchange rates issued by WM/Reuters on 6 February 2024.
US dollar cheques for the quarterly interim dividend will be mailed on
22 March 2024 to holders of record at the close of business on 23 February
2024.
The quarterly dividend calendar for the remainder of 2024 will be as follows:
Announcement Date Ex-Dividend Date Record Date Payment Date
Q4 2023 Dividend 08 February 2024 22 February 2024 23 February 2024 22 March 2024
Q1 2024 Dividend 25 April 2024 16 May 2024 17 May 2024 07 June 2024
Q2 2024 Dividend 25 July 2024 08 August 2024 09 August 2024 06 September 2024
Q3 2024 Dividend 24 October 2024 07 November 2024 08 November 2024 06 December 2024
12. Events after the balance sheet date
As disclosed elsewhere in this report, the acquisition of K18 completed on 1
February 2024.
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