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Unilever beat third quarter expectations on Thursday at its turnaround begins to deliver robust sales growth under new leadership.
The Dove and Magnum owner grew underlying sales 4.5% in the quarter driven by volume growth of 3.6%. Analysts had expected a 4.2% rise in sales and 3.2% rise in volumes.
It was the FTSE 100 company’s biggest quarterly sales volumes gain in three-and a-half-years.
Revenue was flat on the same period last year at €15.2bn with sales growth offset by currency impacts and the cost of disposals and acquisitions, and up 1.3% in the first nine months of the year.
The business said it is on track to deliver its 2024 outlook of underlying sales growth to be within a multi-year range of 3% to 5%, with most of the growth driven by volume.
Its share price rose 3% when the markets opened and is now up 25% since January.
“We are still in the early stages of transforming our performance as we execute the ‘Growth Action Plan at pace’- focused on doing fewer things, better and with greater impact,” said Hein Schumacher, Unilever CEO.
“We are starting to see the positive impact from scaling fewer, bigger innovations across our markets supported by increased brand investment.”
Unilever said volume growth was broad-based and reflected strong growth in beauty & wellbeing in North America, strong growth in home care in Europe and a marked volume improvement in ice cream.
“It is reassuring to see strong volume growth in most categories,” said Tineke Frikkee, portfolio manager at Waverton Investment Management. “A good result in ice cream is helpful as they are preparing to exit this division.”
The FTSE 100 company announced in March it was selling its ice cream business containing brands like Magnum, Ben & Jerry’s and Wall’s that brings in £7bn in annual sales.
This is on track to be completed by the end of 2025, Unilever said, and it is now focused on expanding ice cream’s operating profit and global market share.
Morning update
French food group Danone has also beaten third-quarter sales expectations due to selling more products.
The owner of Activia yogurt and Evian water confirmed its full-year guidance after a strong performance in North America and robust growth in sales volumes helped it deliver higher-than-expected organic revenue growth in the third quarter.
Sales rose 4.2%, beating the 3.75% expected by analysts, while volumes were up by 3.6%, compared to a 2.9% expectation.
“Volumes have been a particular focus for the market through Q3, and this bodes well for Danone today,” Bernstein analysts said in a note.
Applied Nutrition will be valued at £350m when it starts trading on the London Stock Exchange on Thursday.
The company will raise £157.5m from the initial public offering, selling 45% of the company at an opening 140p per share.
The valuation of the sports supplements group is below the initial estimates of £500m when the company first revealed plans to float in September.
Founded by Thomas Ryder in 2014, the business has developed four ranges under the umbrella of the Applied Nutrition brand and grown revenues to £86m.
Kerry Foods continues to battle deflating prices with revenue down 3% in the first nine months of the year. Its prices are down 3.2% in the period.
The Irish food manufacturer is growing volumes, however, which were up 3.4% in the third quarter. This reflected continued strong volume growth in the Americas, and a good performance in Asia-Pacific, Middle East, and Africa.
Volumes in Europe turned positive in the third quarter although remain down 0.5% for the year to date.
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