Unilever reported underlying sales growth of 3.0%, driven by volume (1.3%) and price (1.7%); and a 0.9% reduction in turnover (€14.8bn) due to disposals and negative currency impacts. Analysts expected Q1 2025 turnover to edge up 0.8% to around €15.1bn.
The total currency movement of -1.1% comprised -1.8% from the Euro strengthening against key emerging market currencies (notably Latin America and Turkey) and 0.7% of extreme price growth-capping in hyper-inflationary markets. The currency volatility has been heightened by the tariff announcements, the company said.
LATAM, China and Indonesia subdued
Sales in emerging markets (58% of the group’s turnover) were weaker (2% USG) this quarter, with decline in volumes (-0.1%) and increased pricing (2.1%). Growth in Latin America slowed to 1.5%; China declined in high single-digit terms, and Indonesia also declined 6.6%. On the contrary, developed markets delivered 4.5% USG with broad-based volume growth.
Unilever CEO Fernando Fernandez said the company expected to make progress in emerging markets ‘along the year’. “We have seen some slowdown, particularly in Latin America,” he told investors. “The Brazilian economy was up 3.5% last year, it’s up 2% now. The Mexican economy has a slowdown to below 1% growth. We see some Asian economies also slowing down.
“We are conscious that our emerging market performance has to improve and we have plans to deliver that. Driving top-line growth with a strong volume contribution is our absolute priority. We will be ruthless on that and we will invest in line with that kind of ambition.”
Unilever would not make operational decisions based on big currency swings, he added, and would aim to deliver profit growth in hard currency. At the same time, the company expects to save €550m through productivity improvements across the group.
Unilever’s 2025 outlook remained the same, with USG of 3% to 5% and a modest improvement in underlying operating margin.
Tariff impacts could push up prices
The impact of trade tariffs has been ‘limited’ so far but the firm could resort to further localization and potential price increases if necessary.
“At this stage, the direct impact on our business will be limited, given the capital allocated in recent years to the US and supply chains that are predominantly local,” Fernandez said.
“We are evaluating all options, including further localization and changes to material specifications to minimize the impact. If necessary, we will resort also to price increases.”
Premium, snackable formats drive ice cream growth
Unilever’s Ice Cream division – to be demerged from the group in Q4 2025 – delivered a 4% underlying sales growth (1.8% from volume, 2.2% from price) and €1.8bn turnover ($2.05bn), up 2.8% vs Q1 2024. Despite recording the third highest USG rate across the group, Ice Cream’s turnover formed the smallest share (12.16%) of Unilever’s €14.8bn turnover for Q1 2025.
Fernandez said go-to-market strategy improvements and enhancements to supply chain and promotional activities have been key to achieving growth in Ice Cream this quarter.
How Unilever drove growth in Ice Cream
Products geared towards snacking and indulgence drove growth within Unilever’s ice cream portfolio.
Yasso’s chocolate-dunked frozen Greek yogurt bites helped the brand deliver double-digit growth, while premium bite-sized ice cream range Bon Bons was rolled out in further European markets.
Meanwhile, Magnum’s new indulgent flavors Double Cherry and Double Hazelnut landed well with consumers, helping to drive the brand’s mid-single digit growth this quarter.
For Ben & Jerry’s, success with the Sundae format continued, the brand achieving mid-single digit growth driven by new flavors and a new shareable format.
“We are focused on continuing to strengthen the business in preparation for Ice Cream’s separation by the end of 2025,” the chief executive said. “We are doing this by developing an exciting product pipeline, designing more efficient go-to-market strategies, optimizing our supply chain, and building a dedicated sales team globally.”
Fernandez reiterated that the de-merged business will be known as The Magnum Ice Cream Company and will continue to be headquartered in Amsterdam with listings in Amsterdam, London and New York.
“We expect to complete the operational separation by 1 July, a complex process involving the legal entities set up, implementing the standalone operating model and preparing the carve-out financials,” he added.
Unilever will report Ice Cream as a discontinued operation from Q4 onwards.
