Unilever approves €3 billion share buyback
Following an impressive first quarter sales report, the Unilever board has approved a share buyback programme of up to €3 billion. The Company made the disclosure in its Q1 reports published today.
According to the report, the buyback is scheduled to begin next month. “We will commence a share buyback programme of up to €3 billion in May, in one or more tranches, to be completed by the end of the year. This reflects our strong cash flow delivery and balance sheet position, and is in line with our capital allocation framework. A further announcement will be provided before trading begins”, the Company stated.
Unilever CEO Alan Jope stated: “In 2021 we expect to deliver underlying sales growth within our multi-year framework of 3-5%, with the first half at around the top of this range. We expect underlying operating margin to increase slightly in the full year, following a decline in the first half which is driven by a number of factors. Covid-19 continues to cause additional supply chain costs and a negative margin mix. Commodity and freight costs have increased further and we will be lapping lower marketing spend in the first half of last year.”
The Consumer Goods giant disclosed that the operational separation of its Tea business – excluding India and Indonesia and the partnership interests in the ready-to-drink tea joint ventures – is progressing well and is expected to complete this year. The Company will continue to evaluate the most value creating model, including an IPO, a demerger, a joint venture or a disposal, and the appointment of an external CEO to lead the business into its next phase. The business to be separated generated about €2 billion in revenues 2020.
Additionally, in a bid to drive evolution and expand its portfolio, the FMCG giant delved into the health and wellness sector with strong growth in Prestige Beauty and Functional Nutrition. The company recently concluded an agreement to acquire holistic wellness and lifestyle company, Onnit.
According to Unilever, the separation of a number of smaller beauty and personal care brands is also underway. These brands, which are predominantly sold in Europe and North America, will operate under the name Elida Beauty and will benefit from dedicated management focus. The brands include Q-Tips, Caress, TIGI, Timotei, Impulse and Monsavon, and together generated revenues of around €0.6 billion in 2020.
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