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Unilever’s new chief executive has laid out a plan to drive growth following years of disappointing stock price performance, after price increases led to rising sales but a drop in market share in the third quarter.
Despite the company’s portfolio of brands, Unilever’s performance was not matching its potential, Hein Schumacher said on Thursday as he set out a strategy focused on faster growth, productivity and building a “performance culture”.
“The quality of our growth, productivity and returns have all underdelivered,” he said.
“We will drive faster growth by stepping up innovation and investment behind our Power Brands [30 brands which represent 70 per cent of Unilever’s turnover]; we will drive simplicity and productivity, leveraging the full strength of our operating model; and we will sharpen our performance culture through strong leadership and stretching goals,” he added.
His announcement came as Unilever reported that underlying sales in the three months to the end of September rose 5.2 per cent, while turnover fell 3.8 per cent to €15.2bn, in line with analysts’ expectations.
Unilever raised prices 5.8 per cent, more than analysts expected, while sales volumes fell 0.6 per cent. The company said higher prices had forced down volumes, particularly in Europe, where sales volumes fell 10 per cent as consumers traded down to cheaper products.
The percentage of the business winning market share dropped to 38 per cent, down from 41 per cent in the second quarter of the year, which it said was a result of pricing dynamics and consumer shifts in some of its markets.
The Magnum and Marmite maker also announced the appointment of a new chief financial officer, Fernando Fernandez, currently president of Unilever’s beauty and wellbeing group.
Fernandez replaces Graeme Pitkethly, who announced his decision to retire from the company this year, six months after former chief executive Alan Jope announced he was stepping down.
The consumer goods giant announced it had reached an agreement to sell Dollar Shave Club, a company it bought for $1bn in 2016. Unilever will retain a minority shareholding of 35 per cent.
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