Ahead of Unilever PLC (LSE:ULVR)’s fourth-quarter results next month, analysts at Barclays forecast a solid update but the market will wait to see who will take over as chief executive.
Alan Jope, who has been in the hot seat for four years, is expected to step down and retire at the end of this year.
Barclays said the consumer goods company’s portfolio, which includes Persil and Hellmans, is in better shape than previous years, but there are still “questions where we would like to get clarity”.
In terms of hard figures, Barclays expects volumes to be down 2.8% in the fourth quarter, compared to 1.6% for the prior three months.
Unilever outlined in its investor seminar that is aiming to deliver a volume of greater than 2% on a sustainable basis, which had averaged 1.4% between 2017 and 2021. Barclays believes this would represent a “big step forward”.
Pricing is expected to be 12.7%, although that will fade into the mid-single digits in 2023.
One area of concern could be a temporary slip in market share. Currently over 50%, Jope suggested this could fall into the 40% as the group disposes of some unprofitable sales.
Looking ahead at the results, Barclays will be keeping an eye on comments on innovation.
Unilever’s approach has changed in recent years, with the number of projects 40% lower than in 2019.
However, project sizes have doubled and turnover from the projects doubled to €1bn from 2020 to 2021.
Evidence the new approach is working is seen in consumers viewing Unilever’s products as superior rising from 51% in 2019 to 71% in 2021.
“We think this is significant and usually is a good lead indicator of a great intention to buy Unilever’s brands over those of a competitor,” said Barclays.