Core Insights - Unilever and Kimberly-Clark are both undergoing significant portfolio transformations, focusing on shedding low-margin businesses and enhancing their core offerings, with Unilever emphasizing premium beauty and Kimberly-Clark preparing for the Kenvue acquisition [1][1]. Financial Performance - Unilever's Ice Cream demerger in December 2025 resulted in a $3.37 billion gain, leading to an underlying operating margin of 20.0%, up 60 basis points, and generating $5.921 billion in free cash flow [1][1]. - Kimberly-Clark's divestiture of its U.S. private label diaper business caused a 17.2% year-over-year revenue decline in Q4 to $4.08 billion, but organic sales grew by 2.1% with volume-plus-mix up 3.0% [1][1]. Dividend Analysis - Unilever offers a dividend yield of 3.46% with an annual dividend of $1.977 per ADR, while Kimberly-Clark has a higher yield of 5.15% with an annual dividend of $5.04 per share, supported by a 53-year streak of consecutive increases [1][1]. - Kimberly-Clark's recent quarterly dividend increased to $1.28 in Q1 2026, reflecting a management culture that prioritizes dividend stability [1][1]. Strategic Outlook - Kimberly-Clark's integration of Kenvue is a critical factor for future performance, with anticipated $300 million in tariff headwinds for 2026 [1][1]. - Unilever's focus on premium beauty brands like Nutrafol and K18 is essential for maintaining growth, although currency fluctuations posed a 5.9% revenue drag in 2025 [1][1]. Market Positioning - Kimberly-Clark trades at 13x forward earnings, below its historical average, while Unilever's broader global reach and premium brand momentum position it favorably despite a lower dividend yield [1][1].

Core Insights - Unilever is focusing on premium segments and digital commerce, while McCormick needs to demonstrate gross margin recovery amidst ongoing challenges [1] Group 1: Company Performance - Unilever reported underlying sales growth of 3.5% and volume growth of 1.5% for FY2025, with Q4 showing an acceleration to 4.2% underlying sales growth [1] - McCormick achieved full-year revenue of $6.84 billion, up 1.73%, with its Consumer segment leading at $1.127 billion in Q4, up 3.9% [1] - Unilever's gross margin stood at 46.9%, while McCormick's gross margin contracted to 38.9% in Q4, down 130 basis points [1] Group 2: Strategic Moves - Unilever is narrowing its focus by acquiring premium personal care brands and initiating a €1.5 billion share buyback starting in Q2 2026 [1] - McCormick is expanding through the acquisition of McCormick de Mexico, which is expected to add 11-13% to reported net sales growth in FY2026 [1] Group 3: Future Outlook - McCormick's ability to recover gross margins is critical, with CEO Brendan Foley emphasizing the need for continued top-line momentum and strong operating profit performance [1] - Unilever faces currency headwinds in Latin America and India, with 2026 guidance targeting the lower end of its 4-6% growth range [1] Group 4: Valuation Comparison - McCormick's stock has dropped nearly 16% year-to-date, with a consensus target of $73.85, indicating potential upside if margins recover [1] - Unilever trades at a forward P/E of about 18x with a 3.4% dividend yield, presenting a cleaner post-demerger story and better margin visibility heading into 2026 [1]

Core Viewpoint - Unilever aims to become a more streamlined, agile company by 2025, focusing on sales growth, a strong product portfolio, and robust profit margins [3] Financial Performance - In 2025, Unilever reported a revenue of €50.5 billion, with an underlying sales growth (USG) of 3.5% and a volume growth of 1.5% [4][5] - The overall revenue decreased by 3.8% due to negative factors such as euro exchange rates, but the continuous growth in underlying sales indicates a healthier and more competitive Unilever [5] - The underlying operating profit was €10.1 billion, reflecting a slight decrease of 1.1%, while the operating profit increased by 2.4% to €9.0 billion [10] Segment Performance - The Beauty & Wellbeing segment achieved a sales growth of 4.3%, driven by strong performances from brands like Vaseline and Dove, which saw double-digit growth [11] - Personal Care segment reported a 4.7% sales growth, with volume growth of 1.1% and price growth of 3.6% [11] - Home Care and Foods segments experienced lower sales growth, with Home Care at 2.6% and Foods at 2.5% [10] Brand Strategy - Unilever's 30 core brands, termed "Power Brands," contributed 78% of total revenue, with a sales growth of 2.2% [9] - The company plans to invest 100% of its new BMI into the development of these Power Brands, reflecting a strategic focus on high-growth areas [9] Regional Insights - Asia-Pacific and North America are the largest markets for Unilever, contributing over 80% of total revenue, with Asia-Pacific showing a 4.6% sales growth [12][15] - The North American market performed particularly well, achieving a 5.3% growth, driven by a premium product mix [15] - In China, the overall sales remained flat, but beauty and personal care segments are entering a growth phase due to strategic adjustments [17][21] Strategic Initiatives - Unilever is focusing on high-end product innovation and market expansion in China, with significant investments in e-commerce and product development tailored to local preferences [20][18] - The company has implemented a "sell old, buy new" strategy, divesting from underperforming assets while investing in high-growth categories like beauty and personal care [26] - Unilever's management is enhancing operational efficiency and adapting to AI-driven innovations to accelerate product development and market responsiveness [27][28] Future Outlook - For 2026, Unilever anticipates a basic sales growth of 4% to 6%, with a minimum volume growth of 2% and a slight improvement in profit margins [29] - The company is committed to maintaining a focus on high-growth markets and digital commerce, particularly in the U.S. and India, to counterbalance market slowdowns [29]

Financial Data and Key Metrics Changes - For the full year, underlying sales growth was 3.5%, with volumes at 1.5% and price at 2% [5] - Turnover for the full year was EUR 50.5 billion, down 3.8% versus the prior year, primarily due to significant currency headwinds [25] - Underlying operating margin expanded by 60 basis points to 20% in 2025, reflecting a structurally strong margin profile [26] - Underlying EPS rose to EUR 3.08, up 0.7% versus the prior year, with sales growth and margin expansion contributing 6.5% to EPS growth [28] Business Line Data and Key Metrics Changes - Beauty and Wellbeing delivered underlying sales growth of 4.7% for the full year, with volumes up 2.8% [10] - Personal Care delivered underlying sales growth of 4.7% for the full year, driven by strong performance in the U.S. [11] - Home Care delivered underlying sales growth of 2.6% for the year, primarily volume-led at 2.2% [14] - Foods delivered underlying sales growth of 2.5% for the year, with 0.8% from volume and 1.7% from price [16] Market Data and Key Metrics Changes - Developed markets delivered underlying sales growth of 3.6% for the year, while emerging markets delivered underlying sales growth of 3.5% [19][21] - In North America, underlying sales grew 5.3% for the year, with volumes contributing 3.8% [20] - In Asia Pacific Africa, underlying sales growth was 4.6% for the year, with volumes contributing 3% [21] - Latin America saw underlying sales growth of 0.5% for the year, reflecting a broad-based market slowdown [23] Company Strategy and Development Direction - The company aims to focus on beauty, wellbeing, and personal care, with an emphasis on premium segments and digitally native brands [32][34] - The company completed the demerger of ice cream and 10 transactions to sharpen its portfolio and increase focus on growth [34] - The company is committed to a disciplined capital allocation strategy, focusing on growth and productivity while delivering attractive capital returns [31][44] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in emerging markets, expecting volume growth of at least 2% in 2026 [36] - The company anticipates underlying sales growth for 2026 to be at the bottom end of the multi-year range of 4%-6% [36] - Management acknowledged challenges in developed markets but emphasized the strength of their portfolio and execution [38] Other Important Information - Free cash flow for the year was EUR 5.9 billion, representing 100% cash conversion [29] - The company has delivered more than EUR 670 million of savings from its productivity program, ahead of schedule [27][59] - The company plans to continue investing in brand and marketing, with 16.1% of turnover allocated to these areas, the highest percentage in over a decade [27] Q&A Session Questions and Answers Question: Emerging market outlook for 2026 - Management expressed confidence in emerging markets, noting improvements in India and Indonesia, and a gradual recovery in China [51][52][53] Question: Pricing outlook for 2026 - Management expects pricing growth to be around 2% for 2026, with some increased promotional spending noted [64] Question: Key building blocks for margin improvement in 2026 - Management highlighted the importance of gross margin expansion, productivity savings, and disciplined pricing as key factors for margin improvement [66][68]

Financial Data and Key Metrics Changes - For the full year, underlying sales growth was 3.5%, with volumes at 1.5% and price at 2% [5] - Turnover for the full year was EUR 50.5 billion, down 3.8% versus the prior year, primarily due to significant currency headwinds [25] - Underlying operating margin expanded by 60 basis points to 20% in 2025, reflecting a structurally strong margin profile [26] - Underlying EPS rose to EUR 3.08, up 0.7% versus the prior year, with sales growth and margin expansion contributing 6.5% to EPS growth [28] Business Line Data and Key Metrics Changes - Beauty and Wellbeing delivered underlying sales growth of 4.3%, evenly split between volume of 2.2% and price at 2.1% [10] - Personal Care delivered underlying sales growth of 4.7% for the full year, with price contributing 3.6% and volumes growing 1.1% [11] - Home Care delivered underlying sales growth of 2.6% for the year, primarily volume-led at 2.2% [14] - Foods delivered underlying sales growth of 2.5% for the year, with 0.8% from volume and 1.7% from price [16] Market Data and Key Metrics Changes - Developed markets delivered underlying sales growth of 3.6% for the year, with North America being a standout performer [19] - Emerging markets delivered underlying sales growth of 3.5% for the year, accelerating to 5.8% in the fourth quarter [21] - In India, underlying sales grew 4% for the year, with volumes up 3% [22] - In China, underlying sales growth was flat for the year, but improved in the second half, including mid-single-digit growth in the fourth quarter [23] Company Strategy and Development Direction - The company aims to sharpen its portfolio, having rotated 15% of the total portfolio in 2025 through acquisitions and disposals [3] - Focus remains on beauty, wellbeing, and personal care, with an emphasis on premium segments and digitally native brands [34] - The company is committed to a disciplined capital allocation strategy, prioritizing growth and productivity while delivering attractive capital returns [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in emerging markets, expecting volume growth of at least 2% in 2026 [36] - The company anticipates underlying sales growth for the full year to be at the bottom end of the multi-year range of 4%-6% [36] - Management highlighted the importance of maintaining a focus on volume-led growth and margin expansion [43] Other Important Information - Free cash flow for the year was EUR 5.9 billion, representing 100% cash conversion [29] - The company completed an eight-for-nine share consolidation in December 2025 following the ice cream separation [29] - The productivity program has delivered more than EUR 670 million of savings, with a commitment to complete EUR 800 million by 2026 [27][59] Q&A Session Questions and Answers Question: Emerging market outlook for 2026 - Management expressed confidence in emerging markets, noting improvements in India and Indonesia, and a gradual recovery in China [51][52][53][54] Question: Pricing outlook for 2026 - Management expects pricing growth to be around 2% for 2026, with some increased promotional spending noted [62][64] Question: Key building blocks for margin improvement in 2026 - Management highlighted a structurally high gross margin and ongoing productivity initiatives as key factors supporting margin improvement [66][68]

Financial Data and Key Metrics Changes - For the full year, underlying sales growth was 3.5%, with volumes at 1.5% and price at 2% [4] - Turnover for the full year was EUR 50.5 billion, down 3.8% versus the prior year, primarily due to significant currency headwinds [23] - Underlying operating margin expanded by 60 basis points to 20% in 2025, reflecting a structurally strong margin profile [24] - Underlying EPS rose to EUR 3.08, up 0.7% versus the prior year, with sales growth and margin expansion contributing 6.5% to EPS growth [26] Business Line Data and Key Metrics Changes - Beauty and Wellbeing delivered underlying sales growth of 4.7% for the full year, with volumes up 2.8% [8] - Personal Care delivered underlying sales growth of 4.7% for the full year, driven by strong performance in the U.S. [9] - Home Care delivered underlying sales growth of 2.6% for the year, primarily volume-led at 2.2% [11] - Foods delivered underlying sales growth of 2.5% for the year, with 0.8% from volume and 1.7% from price [13] Market Data and Key Metrics Changes - Developed markets delivered underlying sales growth of 3.6% for the year, with North America being a standout performer [16] - Emerging markets delivered underlying sales growth of 3.5% for the year, with growth accelerating to 5.8% in the fourth quarter [18] - In India, underlying sales grew 4% for the year, with volumes up 3% [20] - In China, underlying sales growth was flat for the year, but showed improvement in the second half [21] Company Strategy and Development Direction - The company aims to focus on premium segments, digitally native brands, and dCommerce exposure, particularly in the U.S. and India [31] - The company is committed to simplifying its portfolio through targeted disposals while pursuing bolt-on acquisitions aligned to its strategy [32] - The company expects underlying sales growth for 2026 to be at the bottom end of the multi-year range of 4%-6% [34] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in emerging markets, citing improved performance and brand equity in India and Indonesia [49][50] - The management acknowledged challenges in developed markets but noted strong execution and brand performance in North America [53] - The company anticipates inflationary pressures in select commodities for 2026, but overall inflation is expected to be lower than in 2025 [34] Other Important Information - Free cash flow for the year was EUR 5.9 billion, representing 100% cash conversion [28] - The company returned EUR 6 billion to shareholders in 2025, comprising EUR 4.5 billion in dividends and EUR 1.5 billion in share buybacks [31] - The company completed the ice cream demerger and 10 transactions during the year, significantly increasing focus on growth [32] Q&A Session Questions and Answers Question: Can you talk about the emerging market outlook for 2026? - The management expressed confidence in emerging markets, highlighting improved performance in India and Indonesia, and a gradual recovery in China [49][50] Question: Can you discuss the pricing outlook for 2026? - The management expects pricing to be around 2% for 2026, with some increased promotional spending, particularly in foods [60] Question: What are the key building blocks supporting confidence in achieving margin improvement in 2026? - The management highlighted consistent gross margin expansion, productivity savings, and disciplined capital allocation as key factors supporting margin improvement [63][64]

Core Insights - Unilever's beauty and well-being division outperformed the overall company growth in 2025, with underlying sales increasing by 4.3% to 12.8 billion euros, driven by both volume and price growth [1] - The beauty and well-being segment contributed 25% to Unilever's total turnover, with an underlying operating profit of 2.5 billion euros, reflecting a 3.2% year-on-year decline [2] - Overall, Unilever's underlying sales rose by 3.5% to 50.5 billion euros, primarily due to higher prices, with power brands like Dove and Vaseline accounting for 78% of turnover [3] Financial Performance - The beauty and well-being division's growth was supported by double-digit increases in wellness products, Vaseline, and Dove, while prestige beauty and core skin care experienced low-to-mid single-digit growth [1] - The underlying operating margin for the beauty and well-being division decreased to 19.2%, impacted by a slight decline in gross margins and increased brand and marketing investments [2] - Unilever's power brands achieved a 4.3% underlying sales growth, primarily driven by volume, highlighting their significance in the company's overall performance [3] Strategic Initiatives - CEO Fernando Fernandez emphasized Unilever's transformation into a "simpler, sharper and faster company," focusing on volume growth, positive mix, and strong gross margins [4] - The company is prioritizing growth in beauty, well-being, and personal care, with a focus on premium segments and digital commerce, particularly in the U.S. and India [4] - Unilever plans to streamline operations by cutting 7,500 office-based roles globally, aiming for total cost savings of around 800 million euros between 2024 and 2027 [5]

Core Insights - Esi Eggleston Bracey is leaving her position as Unilever's chief growth and marketing officer as part of a broader restructuring initiative within the company [1][2] - Leandro Barreto will take over as chief marketing officer for Unilever and the beauty and well-being business group starting January 1, following a transition period [2] - The restructuring aims to enhance Unilever's marketing strategies and consumer engagement amid significant industry changes and a digital revolution [2] Company Changes - The leadership change is part of Unilever's ongoing transformation to improve brand marketing and consumer interaction [2] - Chief Executive Officer Fernando Fernandez acknowledged Eggleston Bracey's significant contributions during her eight years at Unilever, highlighting her role in establishing a foundation for growth in the U.S. market [3] - Eggleston Bracey joined Unilever in 2018 and was instrumental in redefining demand-building strategies globally [3] Marketing Strategy - Leandro Barreto is recognized for his creativity and ability to build culturally relevant brands, positioning him well to lead Unilever's marketing transformation [3] - Unilever has focused on beauty and wellness as key growth drivers, with expectations that these divisions will account for two-thirds of sales in the medium term, up from the current 51% [4]

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Core Insights - Unilever reported a decline in revenue for both Q3 and the first three quarters of 2025, with Q3 revenue at €14.7 billion (approximately ¥121.4 billion), down 3.5% year-on-year, and year-to-date revenue at €44.8 billion (approximately ¥370.0 billion), down 3.3% year-on-year [1][2] - Despite the overall decline, CEO Fernando Fernandez highlighted a return to growth in the Indonesian and Chinese markets, and significant improvement in overall performance when excluding the ice cream business [1][6] Financial Performance - The last significant growth for Unilever was in 2022, with a 16% increase in revenue, reaching €37.7 billion (approximately ¥376.8 billion) [1][2] - All five business segments (Beauty & Wellbeing, Personal Care, Home Care, Foods, and Ice Cream) experienced declines in Q3 and year-to-date performance [2][3] Business Segment Analysis - **Beauty & Wellbeing**: Q3 revenue was €3.2 billion (approximately ¥264.5 billion), down 3.1% year-on-year; year-to-date revenue was €9.7 billion (approximately ¥801.8 billion), down 1.6% year-on-year [3][4] - **Personal Care**: Q3 revenue was €3.3 billion (approximately ¥272.6 billion), down 2.3% year-on-year; year-to-date revenue was €9.8 billion (approximately ¥809.6 billion), down 4.8% year-on-year [8][4] - **Home Care**: Q3 revenue was €2.8 billion (approximately ¥229.0 billion), down 5.3% year-on-year; year-to-date revenue was €8.7 billion (approximately ¥724.0 billion), down 6.4% year-on-year [4] - **Foods**: Q3 revenue was €3.1 billion (approximately ¥256.0 billion), down 2.9% year-on-year; year-to-date revenue was €9.7 billion (approximately ¥801.8 billion), down 2.2% year-on-year [4] - **Ice Cream**: Q3 revenue was €2.3 billion (approximately ¥189.0 billion), down 4.2% year-on-year; year-to-date revenue was €6.9 billion (approximately ¥573.0 billion), down 1.1% year-on-year [4] Regional Performance - The Asia Pacific and Africa region showed strong growth, particularly in China and Indonesia, with Q3 USG at 6.8% and revenue of €6.2 billion (approximately ¥512.2 billion), accounting for 42% of the group's overall performance [9][10] - The Americas region faced challenges, with Q3 revenue of €5.2 billion (approximately ¥429.7 billion) and a decline in Latin America, particularly in Brazil and Mexico [13] - Europe achieved Q3 revenue of €3.3 billion (approximately ¥272.6 billion), with growth across all business groups despite high year-on-year comparisons [13] Strategic Focus - Unilever is focusing on core businesses, particularly in beauty and health, with plans to spin off the ice cream business to enhance profitability [14][15] - The company aims to expand its portfolio in high-end segments and digital commerce, with the U.S. and India identified as key growth markets [15]