Unilever emerges after abandoning its ‘virtue signaling’ agenda

Unilever’s sales have soared thanks to a turnaround plan that has moved it away from its “virtue signaling” agenda.

The consumer goods giant – whose brands include Magnum ice cream, Dove soap and Hellmann’s mayonnaise – said sales rose 4.5 per cent in the three months to September 30.

The FTSE 100 group said the volume of goods it sold increased while price increases decreased. The shares rose 2.9 per cent, or 137 pence, to 4,790 pence in a vote of confidence in chief executive Hein Schumacher’s revival mission.

Schumacher said the group was “starting to see the positive impact” of its strategy, which includes focusing on “doing fewer things, better.”

The Dutchman, who replaced Alan Jope in July 2023, has promised to stop “forcibly imposing social justice messages” on brands, describing it as a “distraction” for some of the products.

Investors had fiercely criticized the idea that the group should prioritize good in the world over profits.

Fund manager Terry Smith accused the company of “virtue signaling” after claiming Hellmann’s mayonnaise had a social purpose.

Schumacher also plans to spin off the group’s ice cream parlor and save around £700 million with 7,500 job cuts.

The ice cream division, which includes Wall’s, Ben & Jerry’s and Magnum, had one of the best results in the third quarter, with sales increasing nearly 10 percent.

Unilever attributed this to “strong innovations” such as small offerings from Magnum and Ben & Jerry’s.

Unilever was cagey about the future of the unit, which could list in London, New York or Amsterdam.

With inflation declining, Unilever said goods prices were just 0.9 percent higher in the third quarter than a year earlier, down from a 1 percent year-on-year increase in the second quarter.

At the height of the cost of living crisis in late 2022, prices rose 13.3 percent year-on-year.

AJ Bell investment director Russ Mold said Schumacher has “made real progress in the business” since taking the helm, adding: “This has been based on improved product innovation, but also a slowdown of price increases”.

Chris Beckett, head of equity research at Quilter Cheviot, said Unilever had “continued its good run of results”, adding: “The momentum generated in recent months is here to stay as the business transforms.” “Unilever remains on the road to recovery.”