Unilever’s sales are set to increase as the turnaround plan shows results

Unilever’s third-quarter sales are expected to grow as it implements a turnaround strategy under the new CEO.

According to estimates, the maker of Marmite and Dove is expected to achieve a underlying growth of 4.2% in the last three months. This compares to 3.9.% growth in the previous quarter.

When it updates the market, the London-listed consumer group is also expected to show an improvement in volume growth: up 3.2% compared with the 2.9% increase in the second quarter.

Investors and industry watchers will closely monitor Unilever’s market share movement. Unilever’s share has suffered in the last year, as consumers switched to supermarket own-labels at a time when the cost of living increased.

Analysts at RBC stated that “Competitiveness is still our main concern. It has not improved in the last six month” despite the volume growth of the second quarter.

Unilever “statement ‘we expect to see a sequential improvement in the share trend with time’ is, according to them, relatively cautious. However, we do acknowledge that Unilever has made the right move, given the marketing increase.”

Unilever is the largest consumer goods group in the world, with a market capitalization of £120 billion. Unilever’s products include Dove, Lipton, Hellmann’s mayonnaise, and Knorr stockcubes. Despite having a strong brand portfolio, the company’s share price has lagged behind its sector peers like Nestle and Procter & Gamble.

Hein Schumacher was hired last year by the company as its new CEO, replacing Alan Jope. Hein’s job is to oversee the turnaround of the business. Nelson Peltz – the activist billionaire investor who owns a stake in Unilever – had scouted him.

Schumacher, former CEO of FrieslandCampina drew a “growth plan” to maximize shareholder returns and improve the company’s under-par performance. The plan, announced in October of last year, is focused on Unilever’s “power” brands , 30 of Unilever’s 400+ labels, which represent 70% of the company’s turnover. The 14 brands have a combined revenue of €1 billion and more, including Dove Sure, Persil, etc.

In line with his strategy, the company plans to separate its ice-cream unit which includes Ben & Jerry’s Wall’s and Cornetto, and generates about €8 billion annually in sales.

Schumacher stated that the “most probable route” was a demerger. This could include a separate listing. This sparked speculation as to whether the division would be listed in London or the Netherlands.

A major change in Schumacher’s business was the sale of the Russian subsidiary to a local manufacturer for an estimated €520 million. This happened almost three years after Schumacher began to be urged to abandon its operations there after the invasion of Ukraine.

Last week, the consumer goods group that has been labeled a “sponsors of war” because it did not leave Russia earlier, announced that they had reached an arrangement to sell Unilever Rus. Arnest is a Russian manufacturer and distributor of household, cosmetics, fragrances and other products.

Schumacher announced in July that his turnaround plan had shown “first signs” of success after increasing its profitability during the first half year. He claimed that the company had made “great” progress in boosting sales and margins.

Unilever’s trading update, which will be released shortly, will reveal how the company plans to prosper in its new streamlined form.

Investors and industry watchers will closely monitor Unilever’s strategic insights and projections, as it seeks to reaffirm and maintain its market position in a competitive environment.

Unilever has declined to comment.