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Unilever’s third-quarter sales were boosted by the strong performance of its ice cream division, which the Marmite and Magnum maker is planning to spin off by the end of next year.
In the three months to September Unilever sales rose 4.5 per cent, beating a company-compiled consensus estimate of 4.2 per cent. The volume of goods sold climbed 3.6 per cent, with revenues flat at €15.2bn.
Sales of Unilever’s ice cream brands, which include Ben & Jerry’s and Wall’s, soared 9.8 per cent compared with the same period last year, well above the 4.3 per cent growth expected by analysts.
Factoring out the ice cream business, Unilever’s sales grew 3.6 per cent in the third quarter.
Chief executive Hein Schumacher said the planned separation of the ice cream business — which Barclays estimates could be worth as much as €17bn — and a plan to boost productivity that involves laying off 7,500 staff, were progressing as planned. He said the separation would be complete by 2025.
“We are starting to see the positive impact from scaling fewer, bigger innovations across our markets supported by increased brand investment,” Schumacher added.
Unilever is in the grip of a turnaround that, after years of disappointing financial performance, has cheered investors. Its shares were up about a fifth in the year to date before Thursday’s update, and rose a further 3.4 per cent in early trading.
On Thursday the company said it was in the process of establishing a legal entity, standalone operating model and the carve-out financials for the ice cream business.
Earlier this year the Financial Times reported that Unilever had appointed bankers to approach potential private equity buyers of the ice cream decision. Unilever has said it is exploring all options for the portfolio, first among them a public listing.
Unilever’s ice cream business is run from Rotterdam, rather than the global headquarters in London.
In the last quarter consumer and luxury stocks including L’Oréal and LVMH have been hit by stubbornly weak demand in China. Unilever said its sales in China declined “low-single digit” as a result of continued weak consumer sentiment. Depressed demand for high-end skincare and make-up in China and the US also dragged down the company’s prestige beauty division, the company said.
“After the weakness over the past month, and in particular yesterday in the wake of the results out of Asia, these results are reassuringly robust, and should be well-received in our view,” said Bernstein analyst Callum Elliott.
This month Unilever sold its Russian business for €520mn to industrialist Alexei Sagal’s chemicals group Arnest. The businessman has also acquired Heineken and Ball Corp’s Russian assets.
Unilever’s Russian operations included four factories and accounted for approximately 1 per cent of the group’s turnover and net profit in 2023.