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Unilever reveals €3 billion share buyback plan after ‘good start to the year’

Naomi Ackerman
·2-min read
<p>The consumer goods giant is behind products including Marmite</p> (PA)

The consumer goods giant is behind products including Marmite

(PA)

Unilever said on Thursday that it is to buy back up to €3 billion of shares after seeing underlying sales growth of 5.7% in the first quarter.

The FTSE 100 firm behind brands such Ben & Jerry’s, Dove Soap and Hellmann's said overall sales in its emerging markets grew 9.4% in the period, "driven by strong double-digit growth in China and India" and offsetting a European sales decline of 2.3%.

The group said it will begin the buyback programme next month and that it intends the process to complete by the end of 2021.

Chief executive Alan Jope said the board's approval for the buyback program - the giant's first since 2018 - came "following another year of strong cash flow delivery".

Unilever said the move "reflects our strong cash flow delivery and balance sheet position". Jope said bosses are "confident that we will deliver underlying sales growth in 2021 within our multi-year framework of 3-5%, with the first half around the top of this range".

First quarter turnover was €12.3 billion (£10.7 billion), down 0.9% on the same period a year earlier, which the company put down in part to hits from currency fluctuations.

WATCH: Home cooks help Unilever beat forecasts

European sales suffered in the period as lockdowns in key markets including the UK and Germany hit demand, and the giant slashed prices in a "deflationary retail environment". 

Finance chief Graeme Pikethly said that European recovery this summer depends on how out-of-home ice cream sales fare - and said that he does not expect price inflation any time soon. 

He said the ice cream sales were an "up or down lever for Q2" in Europe, "as a lot of our out of home ice cream business is in Europe, and is dependent not just on sunny weather but on the ability of people to get to bars, to get to beaches, to get on holiday". 

Pikethly added: "The nature of the [European] retail environment is very tough to be honest... I think we'll be on a deflationary price environment for the foreseeable future." 

Unilever also announced that it has created a new "Elida Beauty" brand to house Q-Tips, Caress, Tigi, Timotei, Impulse and MonSavon - which together generated revenues of around €0.6 billion in 2020. 

It comes after the giant completed a long-awaited unification its Dutch and British arms and moved its legal base to London in November. The unification means Unilever can operate as a single London-based entity and is set to make it easier for the giant to acquire or sell companies.

Shares were up 3%, or 123p, to 4200p, on Thursday morning. 

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