Unilever Reports Stronger Margins and Accelerated Portfolio Transformation in FY2025

Unilever reported its full-year 2025 results, highlighting improved underlying sales growth, margin expansion, and strong cash generation, supported by the separation of its ice cream business and accelerated portfolio transformation.

In 2025, underlying sales growth (USG) reached 3.5%, with volume growth of 1.5%. Growth accelerated in the fourth quarter to 4.2%, reflecting strengthening momentum in the second half of the year. Turnover totaled €50.5 billion, representing a 3.8% decline year-on-year, primarily due to adverse foreign exchange movements (-5.9%) and net disposals (-1.2%).

The company’s Power Brands, which account for 78% of total turnover, delivered strong performance, achieving 4.3% USG and 2.2% volume growth. Beauty & Wellbeing and Personal Care were standout categories, benefiting from premium innovation and brand investment. Emerging markets showed renewed momentum in the second half, particularly in Indonesia, China, and Latin America.

Despite currency headwinds, profitability improved. Gross margin expanded by 20 basis points to 46.9%, while underlying operating margin increased by 60 basis points to 20.0%, driven by disciplined cost control and enhanced manufacturing productivity. Underlying operating profit reached €10.1 billion, and diluted earnings per share rose 6.2% year-on-year.

The company’s productivity programme delivered cumulative savings of €670 million by year-end, exceeding initial targets ahead of schedule. Free cash flow remained robust at €5.9 billion, with a cash conversion rate of 100%. Shareholders received €6.0 billion through dividends and share buybacks. In addition, Unilever announced a new €1.5 billion share repurchase programme, underscoring confidence in its balance sheet strength and cash generation capacity.

In December, Unilever completed the demerger of its ice cream business, including brands such as Magnum, while retaining a 19.9% minority stake. The separation marks a significant milestone in the group’s strategy to simplify its portfolio and focus on higher-growth, higher-margin segments.

Portfolio reshaping remains a central strategic priority. The company plans to complete ten transactions in 2025, including acquisitions of high-growth brands such as Dr. Squatch and Minimalist, alongside divestments of non-core assets.

Chief Executive Officer Fernando Fernandez emphasized that Unilever will intensify its focus on Beauty & Wellbeing and Personal Care, premiumisation, digital commerce expansion, and scaling growth engines in the United States and India. The company is also prioritising innovation-led growth, brand superiority, and disciplined capital allocation.

These results reflect Unilever’s continued efforts to streamline operations, prioritise high-growth categories, and strengthen cost discipline. Amid global macroeconomic uncertainty and currency volatility, the company is transitioning toward a more resilient, volume-led growth model supported by premium brand expansion and improved operational efficiency.

Overall, Unilever’s 2025 performance demonstrates measurable progress in enhancing profitability and sharpening strategic focus, positioning the company for sustainable, higher-quality growth in the medium term.