Unilever’s new CEO, Hein Schumacher, has set ambitious goals for the consumer goods giant, aiming to increase market share through breakthrough technologies and superior products. In his first-half results presentation, Schumacher highlighted the importance of research and development (R&D) and quality in driving the company’s future success.
Schumacher emphasized the need to invest consistently in high-quality and science-backed innovation to propel Unilever’s big brands. This approach, which prioritizes R&D, was deemed unconventional but promising by RBC Capital Markets. The bank commended Schumacher’s commitment to R&D, stating that it should work well for the consumer staples universe.
Unilever’s focus on product quality was also emphasized by Schumacher. He expressed his desire to see Unilever products outperforming the competition consistently, stating that action should be taken when they fall short. Schumacher acknowledged the importance of consumer preferences in the industry and stressed the need to invest in holistic product quality.
However, Unilever has been facing challenges in terms of market share. According to Bernstein, the company has been losing market share nearly 60% of the time, which Schumacher identified as a top priority.
Schumacher also addressed Unilever’s sustainability strategy, recognizing its importance as a differentiating strength for the business. He expressed his intention to sharpen the company’s sustainability agenda by focusing on key priorities such as reducing greenhouse gas emissions, minimizing plastic packaging footprint, and protecting and restoring nature.
While Schumacher revealed some of his plans during the first-half results presentation, he is set to lay out his full strategy in October during the third-quarter results presentation. Investors responded positively to his initial remarks, with Unilever’s share price closing up nearly 5% after the presentation.
Schumacher, who began his career at Unilever, has extensive experience in the industry, having previously worked at companies like H.J. Heinz. His appointment as CEO was preceded by his role as a non-executive director of Unilever in 2022.
In terms of financial performance, Unilever reported a 2.7% increase in first-half turnover, amounting to 30.4 billion euros. This growth was primarily driven by price rather than volume, given the impact of high input costs. Unilever’s net profit for the half-year rose 20.7% to 3.9 billion euros, partially due to disposals.
Looking ahead, Unilever expects underlying sales growth for the full year to be above 5%, surpassing its multiyear range. The company also anticipates a modest improvement in underlying operating margin, reflecting higher gross margin and increased investment in its brands.
As Schumacher continues to shape his plans for Unilever, he aims to unlock the full potential of the business by working with his executive team and beyond to raise their game. His focus on innovation, product quality, and sustainability signals a strategic shift for the consumer goods giant, as it strives to regain market share and drive future growth in the industry.
