LONDON — Unilever said it’s on track to become a leaner and more nimble business as the company reported a 16.9 percent uptick in 2017 profit to 6.5 billion euros on sales of 53.7 billion euros, 1.9 percent higher than the previous year.
“We have delivered a good all-round performance with competitive growth, including an innovation-led improvement in volumes in the fourth quarter, and substantially increased margin, earnings and cash flow. This puts us well on track to deliver toward the strategic objectives set out for 2020, and demonstrates the progress we have made in transforming Unilever into a more resilient and more agile business,” said chief executive officer Paul Polman, who announced his intention to retire last year.
Polman said that with the implementation of a “more agile, consumer-facing organization, we are seeing quality and speed of innovation further improve.” The company has also stepped up delivery from its savings programs and continued the evolution of its portfolio with 11 acquisitions announced and completed in the year, as well as the announcement of the disposal of its spreads business.
“All of this is making Unilever increasingly competitive in light of fast-changing consumer and technology trends,” he added.
Last year was a watershed one for Unilever, which successfully fought off a bid by Kraft Heinz, inked a deal with KKR to sell its flat-lining spreads business, and pursued its plans to put a sharper focus on its personal care and food divisions.
It was active on the acquisitions front, snapping up premium beauty brands including Living Proof, Hourglass, Carver Korea and Sundial. Such a big focus on beauty has led to market speculation that Alan Jope, president of Unilever’s Personal Care division, might be a candidate to succeed Polman.
Polman said the company’s priorities for 2018 are to grow volumes ahead of its markets, maintain strong delivery from savings programs and to complete the exit from the spreads business. “We expect this will translate into another year of underlying sales growth in the 3 percent to 5 percent range, and an improvement in underlying operating margin and cash flow, that keeps us on track for the 2020 targets,” he said.
In the prestige end of the personal-care business in 2017, Unliever said Dermalogica and Kate Somerville performed well, while Dollar Shave Club, Living Proof and Hourglass grew at double-digit rates. The company said they will all contribute to underlying sales growth from 12 months after completion. Overall, personal care grew 2.9 percent on an underlying basis to 20.7 billion euros in 2017.