UL

Management Statement and Operational Highlights

• Portfolio Rotation: Rotated 15% of the total portfolio in 2025 through the successful demerger of Ice Cream and 10 deals including acquisitions and disposals of non-strategic brands.
• Innovation: Elevated brand offerings through strong innovation plans and a shift to social-first demand generation models, improving brand superiority scores.
• Execution: Strong in developed markets, improved in emerging markets; corrected performance gaps in areas like Home Care and Deodorants in Brazil and U.S. businesses.
• Cost Discipline: Drove cost discipline with the productivity program delivering 50 basis points overhead improvement, ahead of schedule.

Guidance

• Expect underlying sales growth for the full year 2026 to be at the bottom end of the multiyear range of 4% to 6%.
• Expect underlying volume growth of at least 2%.
• Confident of a further modest improvement to the underlying operating margin.
• Announced a new share buyback of EUR 1.5 billion.

Segment Performance

• Beauty & Wellbeing: Underlying sales growth was 4.3% in 2025, with volumes at 2.2% and price at 2.1%. Over a 2-year period, compounded annual volume growth was 3.3%. Underlying operating profit was EUR 2.5 billion with an underlying operating margin of 19.2%.
• Personal Care: Underlying sales growth was 4.7% in 2025, with volumes at 1.1% and price at 3.6%. Over a 2-year period, compounded annual volume growth was 3.1%. Underlying operating profit was EUR 3 billion with an underlying operating margin of 22.6%.
• Home Care: Underlying sales growth was 2.6% in 2025, with volumes at 2.2% and price at 0.4%. Over a 2-year period, compounded annual volume growth was 3.1%. Underlying operating profit was EUR 1.7 billion with an underlying operating margin of 14.9%.
• Foods: Underlying sales growth was 2.5% in 2025, with volumes at 0.8% and price at 1.7%. Over a 2-year period, compounded annual volume growth was 3.6%. Underlying operating profit was EUR 2.9 billion with an underlying operating margin of 22.6%.

Risks

• Currency Headwinds: Significant currency headwinds reduced turnover by 5.9% in 2025, with a weaker U.S. dollar and depreciation in emerging market currencies.
• Market Volatility: Market growth moderated in some segments, with softer conditions in certain emerging markets and developed markets in the second half.
• Commodity Inflation: Concentrated commodity inflation in materials like palm, canola oil, and surfactants, with wage inflation also posing challenges.

Question and Answer

Q: Can you talk a bit about the emerging market outlook for 2026?

A: Emerging markets are seen as a long-term competitive advantage. India, China, Indonesia are showing improvements; LatAm market volume growth remains flattish but expect improvements in 2026.

Q: What's the outlook for pricing in 2026?

A: Expect pricing to be around 2% level, with commodity inflation concentrated in certain materials and some deflation in others.

Q: Details on Europe's performance and Power Brands vs non-Power Brands?

A: Europe saw some slowdown, but Home Care and Personal Care performed well. Power Brands (78% of revenue) grew strongly, non-Power Brands (22%) had lower growth but managed accordingly.

Q: Sequencing of growth for 2026 and Wellbeing/Beauty category?

A: Guiding top line growth at lower end of range, with Beauty & Wellbeing showing solid performance; Wellbeing had some softening but confident in structural growth.

Q: Update on innovation and TSA for Magnum?

A: Focus on investing in successful innovations; TSA for Magnum has clear plans with tapering off expected and no stranded costs for Unilever.

Q: Strategy for Prestige Beauty and Foods margins?

A: Prestige Beauty focused on digital-native brands and e-commerce; Foods margins benefited from portfolio rationalization, execution discipline, and overhead savings, with focus on growth.

Q: Impact of discontinuations and Dr. Squatch?

A: Discontinuations in non-Power Brands; Dr. Squatch acquired, performing well and expected to contribute to growth from September 2026.

Q: Latin America's recovery and channel shift in North America?

A: Latin America showing improvement with interventions in Home Care and Deos; North America has strong digital commerce growth with focus on digitally-native brands.

Q: 2026 benefits of revamped innovation and CapEx plans?

A: 2026 expected to bear fruits of innovation investment; CapEx plans to spend 55%-60% on margin-enhancing activities with strict business case justification.