Unilever delivered full-year underlying sales growth of 3.5% with turnover of €50.5 billion, underlying EPS of €3.08 (+0.7%), and underlying operating margin expansion of 60bps to 20.0%. Free cash flow remained robust at €5.9 billion with 100% cash conversion. The stock rose ~2.1% on earnings day (February 12, 2026) as investors cheered accelerating Q4 momentum and margin discipline despite currency headwinds and a revenue miss vs. analyst estimates.
About Unilever
Unilever PLC (Ticker: UL on NYSE; ULVR on LSE) is a British multinational fast-moving consumer goods (FMCG) company headquartered in Blackfriars, London, United Kingdom. Founded in 1929 through the merger of British soap maker Lever Brothers and Dutch margarine producer Margarine Unie, Unilever has grown into one of the world’s largest consumer goods companies.
The company operates across four business segments: Beauty & Wellbeing, Personal Care, Home Care, and Foods, with products available in nearly 190 countries. Its portfolio includes iconic brands such as Dove, Hellmann’s, Vaseline, Domestos, Cif, Knorr, and Comfort. Unilever completed the demerger of its Ice Cream business (The Magnum Ice Cream Company) in December 2025, creating a simpler and more focused organization.
| Key Metric | Value |
| Market Capitalization | ~$147-161 billion |
| Trailing P/E Ratio | ~20-24x |
| Forward P/E Ratio | ~17-19x |
| Dividend Yield (TTM) | ~3.1-3.4% |
| Employees | ~120,000 |
| Beta | 0.22-0.36 |
Top Financial Highlights
- Total turnover reached €50.5 billion, reflecting a 3.8% reported decline, primarily driven by 5.9% adverse currency impact and 1.2% net disposals.
- Underlying sales growth stood at 3.5% for the full year, comprising 1.5% volume growth and 2.0% price growth, with Q4 accelerating to 4.2%, supported by 2.1% volume and 2.0% price growth.
- Net profit increased to €6.2 billion, rising 2.9% year over year.
- Underlying earnings per share reached €3.08, up 0.7% despite an 8.8% adverse currency impact, while diluted earnings per share increased 6.2% to €2.59.
- Gross margin expanded to 46.9%, improving by 20 basis points and marking the third consecutive year of expansion.
- Underlying operating margin improved to 20.0%, up 60 basis points, while GAAP operating margin increased to 17.9%, up 110 basis points.
- Underlying operating profit totaled €10.1 billion, reflecting a 1.1% decline due to currency headwinds.
- Free cash flow reached €5.9 billion, with 100% cash conversion, decreasing by €0.4 billion primarily due to Ice Cream demerger related costs.
- Net debt declined to €23.1 billion from €24.5 billion, resulting in a net debt to EBITDA ratio of 2.0x.
- Shareholder returns amounted to €6.0 billion through cash dividends and share buybacks in 2025, with a new €1.5 billion share buyback announced for Q2 2026.
- Power Brands represented 78% of total turnover and delivered 4.3% underlying sales growth with 2.2% volume growth.
- Personal Care achieved 4.7% underlying sales growth, representing the highest segment performance, while Foods delivered a record operating margin of 22.6%, improving by 130 basis points.
- The productivity programme delivered cumulative savings of €670 million, exceeding the €650 million target, with an additional €130 million expected in 2026.
- For 2026, underlying sales growth is expected at the lower end of the 4% to 6% range, with at least 2% volume growth and modest margin improvement anticipated.
Beat or Miss?
Unilever’s Q4 2025 results presented a mixed picture versus analyst expectations. While underlying EPS of €3.08 came in approximately 1% above consensus estimates, Q4 reported revenue of ~€12.6 billion fell short of some analyst forecasts that included the Ice Cream business, creating a perception of a miss. The discrepancy largely stems from the demerger of Ice Cream in December 2025, which removed a significant revenue stream from continuing operations.
| Metric | Reported | Analyst Estimate / Context | Analysis |
| Full-Year Turnover | €50.5 billion | Prior year €52.5 billion (continuing) | (3.8)% decline, driven by (5.9)% FX and (1.2)% disposals |
| Q4 Turnover | €12.6 billion | Some estimates expected ~$15.95B (including Ice Cream) | Revenue miss partially reflects demerger reclassification |
| Underlying EPS (FY) | € 3.08 | Consensus ~€3.05 | ~1% beat, supported by buybacks and lower tax |
| Underlying Operating Margin | 20.00% | Consensus ~20.0% | In line with expectations |
| USG (Q4) | 4.20% | Expectations ~4% | Slight beat with strong Q4 volume of 2.1% |
| Free Cash Flow | €5.9 billion | Prior year €6.3 billion | €0.4B lower due to demerger-related costs |
What Leadership Is Saying?
CEO Fernando Fernandez – Strategy & Vision
“In 2025 we became a simpler, sharper, and faster Unilever, delivering our commitment to volume growth, positive mix and strong gross margin. Our underlying sales growth improved throughout the year as we landed a strong innovation plan, drove improvements in key emerging markets and successfully completed the Ice Cream demerger. We are moving at speed to build a business that drives desire at scale in our brands, execution excellence across all channels and cost discipline.
CFO Commentary – Financial Discipline (from Earnings Call)
“Gross margin contributed positively, expanding by 20 basis points and marking a third consecutive year of gross margin expansion. Following the Ice Cream demerger, gross margin is now at a structurally higher level of 46.9%. Our productivity program and the ongoing cultural shift enabled a further 50 basis points reduction in overheads. 100% of the incremental BMI was allocated behind Beauty & Wellbeing and Personal Care.”
Historical Performance
Unilever FY 2025 vs. FY 2024
| Category | FY 2025 | FY 2024 (Restated) | Change |
| Turnover | €50.5 billion | €52.5 billion | -3.80% |
| Net Profit | €6.2 billion | €6.0 billion | +2.9% |
| Underlying Operating Profit | €10.1 billion | €10.2 billion | (1.1)% |
| Underlying Operating Margin | 20.00% | 19.40% | +60bps |
| Gross Margin | 46.90% | 46.70% | +20bps |
| Underlying EPS | € 3.08 | € 3.06 | +0.7% |
| Diluted EPS | € 2.59 | € 2.44 | +6.2% |
| Free Cash Flow | €5.9 billion | €6.3 billion | (€0.4 billion) |
| Net Debt | €23.1 billion | €24.5 billion | (€1.4 billion) |
| Brand & Marketing Investment (% of turnover) | 16.10% | 16.00% | +10bps |
Segment Performance Comparison (Full Year USG)
| Business Group | FY 2025 USG | FY 2025 UOM | UOM Change YoY |
| Beauty & Wellbeing | 4.30% | 19.20% | 20 bps |
| Personal Care | 4.70% | 22.60% | +50bps |
| Home Care | 2.60% | 14.90% | +40bps |
| Foods | 2.50% | 22.60% | +130bps |
Competitor Benchmarking
| Metric | Unilever (CY 2025) | Procter & Gamble (FY Jun 2025) | Nestlé (CY 2025) | Reckitt (H1 2025 Annualized*) |
| Revenue | €50.5 billion | $84.3 billion (~€75B) | CHF 89.5 billion (~€95B) | ~£14.2 billion (~€17B) |
| Organic Sales Growth | 3.5% | 2% | 3.5% | 3.3% (YTD) |
| Operating Margin | 20.0% (underlying) | ~24% (core, +50bps) | 16.1% (UTOP) | 24.6% (adjusted, H1) |
| EPS Growth | +0.7% (underlying) | +4% (core EPS) | (7.3)% (underlying) | +4.4% (diluted, H1) |
| Net Profit | €6.2 billion | $16.1 billion (~€14.3B) | CHF 9.0 billion (~€9.6B) | £1.43 billion (2024 FY) |
| Free Cash Flow | €5.9 billion | Adj. FCF prod. 87% | CHF 9.2 billion | N/A |
| Shareholder Returns | €6.0 billion | $16.4 billion | CHF 3.10/share dividend | N/A |
Key Competitive Takeaways
- Unilever’s organic growth of 3.5% matched Nestlé and outpaced P&G’s 2%, demonstrating strong competitive positioning despite currency challenges.
- P&G leads on profitability with core operating margins around 24% and $16.4 billion returned to shareholders, reflecting its premium positioning and scale advantages in North America.
- Nestlé’s net profit dropped 17% to CHF 9.0 billion due to restructuring and the infant formula recall crisis, making Unilever’s stable earnings growth look relatively attractive.
- Reckitt’s strong H1 momentum (7% LFL growth in Q3 driven by emerging markets) positions it as a fast grower, though its pending Essential Home divestiture adds uncertainty.
How the Market Reacted?
Unilever shares responded positively on earnings day, February 12, 2026, with the UL ADR closing at $73.46, up +2.06% on elevated volume of 8.1 million shares – more than double the typical daily volume. The stock continued to rally the following day, reaching $74.59 on February 13. The positive reaction was driven by accelerating Q4 underlying sales growth of 4.2%, disciplined margin expansion, and the announcement of a fresh €1.5 billion share buyback.
However, sentiment was somewhat tempered by the 2026 guidance, which pointed to growth at the “bottom end” of the 4-6% multi-year range due to slowing global markets. Berenberg subsequently downgraded the stock, arguing the turnaround story was now fully priced in after a strong run. As of February 20, 2026, UL shares traded at $73.23, holding most of the post-earnings gains.
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