Unilever Maintains 2017 Underlying Sales Growth Outlook; To Raise Dividend

(RTTNews) - Unilever plc (UN, ULVR.L, UL) said the Group is maintaining its full year outlook of underlying sales growth of 3-5%. The Group now expects the acceleration of Connected 4 Growth and Zero Based Budgeting programmes to deliver an underlying operating margin improvement of at least 80bps. Unilever plc said it intends to raise the dividend by 12% for the coming year. The amount of the next quarterly dividend will be announced in first-quarter trading statement on 20th April. The Group said its share buy-back programme of 5 billion euros will be launched over the remainder of the current year.

Looking forward, Unilever plc said it will accelerate the margin improvement initiatives already underway in Connected 4 Growth. Together with the integration of Foods & Refreshment, this allows to target an overall increase in underlying operating margin, which excludes restructuring, from 16.4% in 2016 to 20% by 2020.

Paul Polman, CEO, stated: "We have decided that the future of the Spreads business now lies outside the Group. We will look to increase our strategic flexibility for further portfolio optimisation through a review of the dual-headed legal structure, with a view to simplifying it."

The Group said it is increasing target for cumulative savings, to be delivered over the next three years in overheads, and through increased efficiency of brand and marketing investment, from over 1 billion euros to 2 billion euros. Unilever plc is rolling out the holistic '5-S' gross margin programme from Home Care into all categories, raising expected supply chain savings from a cumulative 3 billion euros to 4 billion euros over the next three years. In total, this increases the expected cumulative savings over this period from 4 billion to 6 billion euros.

The total restructuring costs for the accelerated programmes, including both the new initiatives and ongoing activities, are expected to be around 3.5 billion euros for the 2017-2019 period.