Jul 22, 2021

Unilever faces biggest cost rises in a decade, warns chief executive

Soaring costs for raw materials, packaging and transport have hit profitability at Unilever despite price rises from the UK's biggest consumer goods maker. The UK mixers maker Fever-Tree said on Tuesday it expected a hit to full-year margins from rising costs. Unilever had previously targeted an operating margin of 20 per cent, but Pitkethly said it was no longer aiming for this figure after coming close to it last year, instead simply aiming to increase profits faster than sales. "We had been concerned, following Fever-Tree's warning on Tuesday, that full-year margin expectations would be significantly reduced. That has not happened, with Unilever guiding to 'around flat'," he said. The group had earlier signalled a slight increase in margins for the year but said on Thursday that the outlook was more uncertain than usual because of cost volatility.

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