Unilever PLC (LSE:ULVR) announced a new €3bn share buyback and said it does not intend to pursue any more acquisitions in the foreseeable future, following the failed bid for GlaxoSmithKline’s consumer healthcare business last month.
Chief executive Alan Jope said the decision came after a few weeks where he and the board “engaged extensively” with shareholders and “received a strong message that the evolution of our portfolio needs to be measured”.
He said 2022 will see the FTSE 100 group manage the challenge of high input cost inflation while continuing to “invest competitively" in marketing, R&D and capital expenditure - while also carrying out the big round of jobs cuts and organisation rejig recently announced.
The owner of brands from Ben & Jerry’s and Knorr to Lifebuoy and Lynx reported its fastest underlying sales growth for nine years in 2021 of 4.5%, including a 1.6% increase in sales volumes. Reported revenues rose 3.4% to €52.4bn.
With raw materials costs stepping up steeply, the FTSE 100 consumer good group recorded underlying price growth of 2.9% for the year, with an acceleration to 4.9% in the fourth quarter.
Rising input costs led to a bit of a squeeze on margins, however, with the underlying operating margin decreased by 10 basis points, leading to underlying operating profit increasing 2.9% to €9.6bn.
With cash flow of €6.4bn in the year, and the €4.5bn sale of its tea business due to complete in the second half of the year, the new cashback is expected to start in the current quarter and complete within two years, alongside the quarterly dividend of €0.4268 per share.