Unilever’s boss said it was ‘far from business as usual’ as he warned over rising prices, supply issues and ongoing coronavirus lockdowns.
Highlighting ‘unprecedented cost inflation’, the FTSE 100 consumer goods giant’s chief executive Alan Jope said ‘the operating environment across our markets worldwide remains volatile’.
But he hailed the ‘resilience’ of the company as it brushed off rising costs, labour shortages and fresh outbreaks of coronavirus to deliver a 2.5 per cent rise third quarter sales.
Warning: Unilever chief executive Alan Jope (pictured), stated that the operating environment in all of our markets around the world remains volatile.
Total turnover hit £11.4billion between July and September. This, however, was achieved after Unilever raised prices on its huge stable of products – from Domestos and Dove to Hellmann’s and Marmite – by 4.1 per cent.
This offset a 1.5% decrease in sales volumes. The firm warned of further price hikes, with finance chief Graeme Pitkethly saying: ‘We expect inflation could be higher next year than this year.’
The group, which claims its products are used by 2.5bn people every day, said it had been able to absorb the majority of the cost increases by making £1.7billion of efficiency savings this year.
Its wage bill grew in the UK and US, and it is facing higher energy and shipping costs.
Jope said: ‘We are operating in a global environment that is far from business as usual. Covid continues to impact many parts of the globe.
But Unilever manages this sort of volatility well, and our supply chain has shown the necessary resilience to adapt.’
The company announced a 36p-per-share dividend, equivalent to £928million.
Hard to swallow: Unilever has raised prices on its huge stable of products – from Domestos and Dove to Hellmann’s and Marmite – by 4.1%
After a three-month slide, shares rose 1.2 percent to 3863.5p.
Unilever makes several household name brands found on the shelves of UK supermarkets, including PG Tips tea and Ben & Jerry’s ice cream.
The highest price hikes were recorded in the home care division (brands like Comfort, Domestos, Dove, and Persil).
The company was unable to meet the increased demand for cleaning products for hands, and home, at the height of coronavirus pandemic, and prices rose by 4.8 percent and volumes fell by 3.2 percent respectively.
The business’s beauty and personal care division, which includes brands such as Vaseline, Radox bubble bath and Lynx deodorant, grew overall sales by 2.6 per cent as price inflation of 3.9 per cent offset a 1.3 per cent slide in volumes.
Vaseline, a petroleum jelly brand was a standout, with sales jumping more than a tenth and its range of deodorants increasing by around 5%.
Due to a 3.8% price increase, food and refreshment sales rose 3%
The company has completed the demerger of the tea business. Now, bosses are weighing whether to sell, float or bring in a partner to help grow the business.