Unilever: Analysts say ‘elephants don’t gallop’ after disappointing performance
The boss of Unilever has said its performance remains “disappointing” as it posted an underwhelming trading update – with analysts warning that the firm’s turnaround will take time.
This morning, the Dove Soap and Ben & Jerry’s maker said turnover reached €59.6bn (£50bn) down 0.8 per cent on last year.
Underlying profit reached €9.9bn (£8.4bn) during the period, up only 2.6 per cent on last year.
The firm warned that less than four in ten of its brands were currently claiming market share.
Speaking today, chief Hein Schumacher, who stepped into the role last July, said the consumer giant’s competitiveness “remains disappointing” and “overall performance” needs to improve.
He said: 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.”
He explained: “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.”
Half of the exec team has changed since October. Today the firm’s long-time people boss, Nitin Paranjpe, announced their retirement. They will be replaced by Mairead Nayager, moving over from Haleon.
Late last year, Unilever revealed it was launching an “action plan” to drive growth, involving focusing on its 30 most profitable brands.
Richard Hunter, Head of Markets at interactive investor, commented “Unilever is at the beginning of what it hopes will be a transformational path to a more streamlined and focused business.
“More recent issues have shown that the famous investment adage of “elephants don’t gallop” fully applies to Unilever, whereby large established companies find much difficulty in executing strong growth. Indeed, for this period, as has been the case for some time, growth has largely been driven by price increases to its products rather than volume growth, and this particular mix is one on which the group has a keen eye,” he added.
Shares popped 2 per cent on the news after a long period of disappointing out-turns.