Today, we announced our results for the first quarter of 2022.

Underlying sales growth of 7.3%, with 8.3% price and (1.0)% volume
Turnover increased by 11.8%, including a currency impact of 3.5%
Quarterly dividend maintained at €0.4268 per share
First €750 million tranche of up to €3 billion share buyback programme commenced

Statement from Alan Jope
“We are executing well in a very challenging input cost environment. Underlying sales growth of 7.3% was driven by strong pricing, with a limited impact on volume in the quarter. This performance was delivered against the backdrop of significant rises in input costs that have further accelerated through the first three months of the year, and the human tragedy of the war in Ukraine.

“The delivery of another solid quarter of sales growth builds on the improved growth momentum that we achieved in 2021 and is underpinned by Unilever’s increased focus on operational excellence as well as disciplined adherence to our chosen strategic priorities. We are maintaining strong investment in our top brands, growing our 13 billion+ Euro brands by 8.8% in the quarter. E-commerce sales now represent 14% of turnover following another quarter of strong double-digit growth.

“Our priority markets of the USA, India and China all grew competitively. We continue to reshape our portfolio into high growth spaces, with Prestige Beauty and Functional Nutrition again growing strongly. We remain on track to deliver the previously announced, simpler, more category-focused organisation structure on 1 July 2022.

“There is more to do as we navigate our business through unprecedented cost inflation, but we are making good progress. We are committed to sustaining this step-up in our growth and competitiveness.”

Outlook for 2022
We continue to expect input cost inflation of around €2.1 billion in the first half, but the outbreak of war in Ukraine and the related increase in raw material inflation have raised our cost forecast for the second half of 2022. We currently expect input cost inflation for H2 to be around €2.7 billion.

This period of unprecedented inflation requires us to take further pricing action with some impact on volume as a result. We now expect underlying sales growth in 2022 to be towards the top end of the previously guided range of 4.5% to 6.5%. We will ensure that we protect the health of our brands as we continue to invest competitively in marketing, R&D and capital expenditure.

We expect underlying operating margin for the first half to be within our guided 2022 range of 16% to 17%. As a result of the forecast increase in costs in the second half, we currently expect the full year underlying operating margin to be at the bottom end of that range. The greatest area of uncertainty and volatility is around the costs, and we will update with our half year results. We expect to restore margin through pricing, mix and savings delivery during 2023 and 2024, as market conditions normalise.

Our market context
High input cost inflation has been widespread across our markets and rose further during the first quarter as the war in Ukraine impacted global markets and commodities. While restrictions have been eased in many markets, Covid-19 continues to affect consumers and operations, particularly in countries that have implemented new restrictions and lockdowns.

In most of the markets in which we operate, market growth was driven by price which had an impact on volumes. India, China and Brazil saw price-led market growth coupled with softer volumes. Market volumes increased in Indonesia, Philippines and Vietnam while market conditions in Thailand remained challenging. In Turkey, inflation increased further during the first quarter. In Europe, several markets declined in value while there was price-driven market growth in North America.

Unilever overall performance
Our priority is sustained, competitive growth, delivered through strong brands and our continued drive for operational excellence across the value chain. Underlying sales growth was 7.3% with 8.3% from price and (1.0)% from volume and all Divisions grew strongly. Price stepped up further from the levels seen in the fourth quarter with some negative impact on volume, most notably in Home Care which took the strongest pricing action, leading to growth of 9.2% over the period.

Beauty & Personal Care grew 7.1% in the quarter, driven by price and continued strong growth in Prestige Beauty and vitamins, minerals and supplements. Foods & Refreshment grew 6.5% through price. Volumes in food solutions and out-of-home ice cream improved as both continued to benefit from channels reopening. This helped offset most of the volume decline in in-home channels which lapped high demand during lockdowns in 2021.

Emerging markets grew by 9.5% with a 10.1% contribution from price, with volumes slightly negative. Pricing in Latin America was particularly strong at 16.4% with volumes contracting by 5.7%. Developed markets increased by 4.1%, with 5.7% from price and (1.5)% from volume. North America grew by 8.5%, through both price and volume increases, while sales grew by 0.7% in Europe as price growth was accompanied by a decline in volumes.

Turnover increased 11.8% to €13.8 billion, which included a positive currency impact of 3.5% and 0.6% from acquisitions net of disposals.

In January 2022, we announced a new organisation for Unilever that is simpler, more category-focused, and organised around five Business Groups. We have been making the changes needed to deliver the new organisation and are on track for launch from the middle of the year. We expect the new structure to generate around €600 million of cost savings over two years and to be achieved within existing restructuring investment plans.

On 23 March, we commenced the first tranche of €750 million of the share buyback programme of up to €3 billion that was announced on 10 February 2022.

We expect the announced sale of our global tea business to complete in the second half of 2022.

Beauty & Personal Care
Beauty & Personal Care underlying sales grew 7.1%, with 7.4% from price and (0.3)% from volume.

Deodorants posted high single-digit growth, helped by technology-driven innovations behind Dove and Rexona, as well as Axe making a strong start to the year. Hair posted mid single-digit growth driven by both styling and wash & care. Sunsilk and TRESemmé contributed strongly with price-led growth while Suave declined. Skin cleansing delivered high single-digit growth with Dove, Lux and Lifebuoy performing well, but volumes declined in a contracting market. Skin care grew low single-digit driven by North Asia and South Asia while sales in North America were flat.

Prestige Beauty had another quarter of double digit-growth, on top of a very strong prior year comparator, when the health and beauty channel re-opened. Hourglass and Living Proof started strongly into the year supported by the premium hair and make-up categories bouncing back.

Home Care
Home Care underlying sales grew 9.2%, with 12.5% from price and (2.9)% from volume, lapping a very strong prior year comparator and facing contracting market volumes.

Fabric cleaning achieved a strong start to the year, with double-digit, price-led growth across most markets and volumes declining only marginally. OMO continued to successfully drive the liquids market development in India, while newer formats such as capsules grew strongly in both China and Europe. Fabric enhancers delivered low single-digit growth, benefitting from a good start to the year in India, China and Turkey, partially offset by declines in the United Kingdom and South-East Asia.

Home and hygiene saw modest growth, with strong pricing being offset by negative volumes against the backdrop of a strong prior year comparator. Domestos further built on the growth of recent years, led by our bleach portfolio.

Foods & Refreshment
Foods & Refreshment underlying sales grew 6.5%, with 7.1% from price and (0.6)% from volume.

Foods delivered high single-digit growth with strong pricing in all key geographies. Hellmann’s posted double-digit growth against a strong baseline in the prior two years, supported by the successful ‘Superbowl’ campaign. Knorr continued to evolve the portfolio by responding to consumer needs in fast-growing segments such as plant-based innovations in Latin America and focused Veganuary activations in Europe. Food solutions grew double-digits, taking the turnover above 2019 levels.

Ice cream growth in the first quarter was driven by double-digit increases in the out-of-home channel, while in-home sales were slightly down. Out-of-home sales benefitted from the easing of restrictions in Europe and the sell-in ahead of an anticipated stronger ice cream season, as well as a good performance in China. Magnum continued its strong growth momentum, helped by launching its core “Remix” innovation, a twist on the classic Magnum stick.