Unilever has indicated it will focus on margin acceleration in the coming year as it delivered lower sales but higher earnings against a backdrop of “severe economic disruptions” in 2016. 

On a group-wide basis, Unilever turnover declined 1.1% in the 12 months to end-December, dropping to EUR52.7bn (US$56.58bn). 2016 did, however, see the group report an increase in operating and net profit, which rose by 3.8% and 5.5% respectively. Higher income from the group’s Pepsi Lipton joint venture and the sale of financial assets boosted the bottom line. 

Group-wide underlying sales, which strip out acquisitions, disposals and currency exchange, slowed year-on-year. Emerging market growth of 6.5% offset a 0.2% decrease in underlying sales in developed markets. The drop was lead by deflation in Europe, where underlying sales fell 0.7%. 

Unilever’s foods unit, which includes brands such as Knorr and Marmite, saw sales fall by 3% in 2016 versus 2015. Operating profit fell by 4.7% year on year as operating margin slipped from 17.8% in 2015 to 17.4% in 2016. 

Refreshment, which includes Unilever’s ice cream brands such as Magnum and Ben & Jerry’s, saw sales decrease by 1.1%. Operating profit was significantly higher, however, rising 15.24% as the group expanded its refreshments operating profit margin from 8.3% in 2015 to 9.7% last year. 


CEO Paul Polman said: “Our priorities for 2017 continue to be volume growth ahead of our markets, a further increase in core operating margin and strong cash flow. The tough market conditions which made the end of the year particularly challenging are likely to continue in the first half of 2017. Against this background, we expect a slow start with growth improving as the year progresses.” 

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By GlobalData

The company said it is targeting growth ahead of its markets as well as improvements in operating margin and cash flow during 2017.

How Unilever plans to grow in 2017 – analysis