LONDON, UK — Unilever, a British consumer products company, reported a higher net profit in 2021, but warned that increasing inflation will drive up prices again this year.
Unilever stated in a statement that profit after tax increased 8.4% to six billion euros ($6.9 billion) last year.
The company, which has been chastised for its failed $50 billion offer for GlaxoSmithKline’s health-care sector, has ruled out any significant acquisitions and promised to repay three billion euros to shareholders through share buybacks.
Last year, Unilever, whose trademarks include Magnum ice cream, Cif surface cleaning, and Dove soap, reported a 3.4 percent increase in sales to 52.4 billion euros.
“The huge spike in input costs has been the key problem of 2021,” says the report.
Alan Jope, the company’s CEO, mentioned raw materials in his remarks.
“We responded with pricing changes,” he said, adding that Unilever’s prices had increased by an average of 2.9 percent during the previous year, but had increased by 4.9 percent in the fourth quarter.
Consumers are being harmed by rising worldwide prices, which come as virus-ravaged countries recover from COVID lockdowns.
As a result, Unilever warned that in the first half of this year it expects “extremely substantial input cost inflation of over 2.0 billion euros.”
“This might lessen to roughly 1.5 billion euros in the second half, but there is still a broad range for this due to market uncertainty about commodity, freight, and packaging prices,” it said.
In the aftermath of the failed GSK deal, Jope is facing increasing criticism from investor activists over his leadership.
Last month, Glaxo disclosed that it had received three unsolicited Unilever proposals for the unit, which is jointly held by GSK and Pfizer in the United States, but had rejected all three as being too low.
Unilever responded by announcing plans to slash roughly 1,500 managerial posts globally as part of a significant reorganisation.