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Investing.com -- Unilever ’s (LON:ULVR) new chief executive, Fernando Fernandez, is pushing through an overhaul aimed at accelerating growth, with a clear priority on boosting volumes, according to analysts at Barclays (LON:BARC) in a note dated Friday.
Barclays said Fernandez, who replaced Hein Schumacher in the first quarter of 2025, is centering the company’s focus on achieving more than 2% volume growth, almost double Unilever’s 10-year average.
Under his leadership, volume growth has remained positive for seven consecutive quarters, averaging 2.3%, and the company has outperformed its peers in volume terms for 10 straight quarters.
The strategy is underpinned by a shift from Unilever’s traditional mass-market model toward a more premium-weighted portfolio.
Following the planned separation of its Magnum ice cream business in November, the company intends to raise premium products’ share of revenues from 30% today to 50% in the mid-term.
Social media-led marketing will increase from 30% to 50% of its €10 billion brand and marketing budget, with a larger role for influencers and locally tailored campaigns.
Fernandez is also targeting stronger execution in high-growth categories and geographies.
Europe, once a lagging region, recorded 2.6% volume growth in the second quarter of 2025, the best among key peers, while India is accelerating. Latin America remains a drag, with volumes down 6% in the quarter.
Margins are another focus area. Barclays noted Unilever’s gross margin has recovered by almost 500 basis points since 2022 to 45% in 2024, with the company on track to deliver around a 19% underlying operating margin this year.
Post-ice cream separation, the operating margin is expected to reach 20%. Cost efficiencies, portfolio mix improvements and targeted investments, including a €100 million in-house fragrance facility, are part of the plan to support margin expansion while funding reinvestment.
Barclays said innovation is becoming more concentrated, with a goal of building at least 12 platforms capable of generating more than €100 million in sales within three years.
Brands such as Vaseline and Dove have been revitalized through science-driven product development, premium packaging and stronger marketing.
Despite macroeconomic headwinds and a softer second-quarter performance excluding ice cream, Barclays maintained its “overweight” rating on Unilever, raising its price target from £54 to £56, citing confidence in the multi-year turnaround under Fernandez’s leadership.