Unilever (LSE:ULVR) spent much of 2025 in transition. By the end of the year it had spun off its global ice cream Business, completed or announced ten portfolio transactions, finished a sizeable buyback programme and lined up a fresh one. For UK investors used to thinking of Unilever as a slow-and-steady consumer staples compounder, 2026 is shaping up to be the first real chance to judge what the new, more focused company can do.

The Magnum Ice Cream Company demerger, completed on 6 December 2025, marked the most visible single step in the strategic reset announced years earlier. The new Unilever now centres on beauty and wellbeing, personal care, home care and nutrition, with a 30-Brand list of so-called Power Brands carrying the bulk of Revenue. The 2025 underlying sales growth of 3.5% suggests the slimmed-down group is moving in the right direction, with Q4 2025 underlying sales growth of 4.2% the strongest of the year.

For UK investors, the Equity story in 2026 is about whether Unilever can keep building momentum on Volume growth, sustain Margin expansion, and deliver the new buyback alongside its Dividend without disappointing on the medium-term outlook. Below, we walk through how the latest results, Capital return programme and Q1 2026 update look from a UK investor perspective.

Key takeaways

  • Unilever reported full-year 2025 underlying sales growth of 3.5%, with 1.5% volume and 2.0% price, on turnover of €50.5 billion, according to the company.
  • The Magnum Ice Cream Company (TMICC) was demerged on 6 December 2025 and listed in Amsterdam, London and New York.
  • Unilever retained an approximate 19.9% stake in TMICC, which it has said it intends to sell down over time.
  • A new share buyback of up to €1.5 billion was approved, expected to start in Q2 2026.
  • Q1 2026 underlying sales growth was reported as strong, with the Q1 2026 quarterly Interim Dividend of €0.4664 representing a 3.0% increase versus Q1 2025.
  • Gross margin reached 46.9% (up 20 basis points) and underlying Operating Margin 20.0% (up 60 basis points) in 2025, as last reported.

Why investors are watching this FTSE 100 stock

Investors are watching Unilever because the company is now structurally simpler than at any point in the past decade. The headline reason: the high-Volatility, capital-heavy ice cream business has been separated, leaving a group focused on power brands across beauty and wellbeing, personal care, home care and nutrition. For long-term shareholders, that potentially means cleaner growth, better margins and a more predictable Cash Flow story, although the transition is still being judged in real time.

Alongside the demerger, Unilever has been pushing harder on its 30 Power Brands, which delivered 4.3% underlying sales growth in 2025, with 2.2% from volume, according to the company. Those brands include household names that UK consumers see every week on supermarket shelves, and they are the engine the new Unilever will be measured against.

For investors who lived through years of choppy volume performance, the steady improvement through 2025 and the Q1 2026 commentary may matter as much as the headline numbers. A more disciplined portfolio, fewer non-core brands and a clearer link between Marketing Investment and brand power are all elements of the story management has been emphasising.

Recent share price performance

Where the shares sit now

According to market data as last reported, Unilever (LSE:ULVR) trades on the London Stock Exchange and forms one of the larger weightings in the FTSE 100. A share consolidation took effect from 9 December 2025 alongside the demerger, intended to ensure comparability between Unilever s share price and per-share metrics before and after the separation of ice cream.

Investors looking at the BATS chart prior to early December 2025 should remember that any like-for-like comparison needs to take both the spin-off of TMICC shares and the share consolidation into account. Most market data providers have adjusted historical prices accordingly, but the optics can still confuse those looking at quick chart snapshots.

What has been driving the move

Sentiment has been shaped by three things: the reception of the Magnum demerger, the trajectory of underlying volume growth, and the size and timing of the new buyback. Stronger volume growth in the back half of 2025, plus a Q4 2025 underlying sales growth print of 4.2%, has supported the view that Unilever s product investment is starting to pay off, although the company itself has flagged slowing markets in some geographies.

Currency has also been an important driver, with adverse currency movements contributing to the 3.8% drop in reported turnover to €50.5 billion in 2025. For sterling investors, that euro reporting base adds an additional layer of variability, and the way Unilever has explained underlying performance in constant currency has been a recurring focus of analyst commentary.

How it compares within the FTSE 100

Within the FTSE 100, Unilever sits in the defensive consumer staples bucket. It tends to be benchmarked against peers like Reckitt and Haleon in the UK and against global names such as Procter &Amp; Gamble, Nestl and L Or al for international context. Its Valuation Premium versus the wider FTSE 100 reflects the perceived quality of its brand portfolio and its emerging-market exposure.

Business performance and Earnings

Unilever s 2025 results showed underlying sales growth of 3.5%, with gross margin reported at 46.9%, up 20 basis points, and underlying operating margin at 20.0%, up 60 basis points, according to the company s announcement. Underlying Earnings Per Share were €3.08, up 0.7%, with diluted EPS up 6.2% to €2.59. Turnover declined 3.8% to €50.5 billion, mainly due to adverse currency movements and net disposals, including the Carve-Out of the ice cream business.

Q4 2025 underlying sales growth of 4.2% was the strongest quarter of the year, with a balanced contribution from volume and price. The company described this as evidence that its productivity programme, simplification work and product innovation pipeline are starting to deliver. The Power Brands, the 30 brands that account for the majority of Unilever s turnover, were again the lead growth contributors in 2025.

In the first quarter of 2026, Unilever reaffirmed its full-year outlook and reported volume-led growth, according to the company. That is a meaningful signal for investors, given how much of the recent narrative has been about whether Unilever can sustain volume growth while still pricing prudently in inflationary markets. The Q1 2026 commentary also pointed to ongoing portfolio simplification, with the company continuing to assess smaller brands that may be candidates for disposal or focused investment.

The ten portfolio transactions completed or announced since the start of 2025 illustrate how active the management team has been in pruning the brand portfolio. While the headline news has been dominated by the ice cream demerger, the smaller transactions in aggregate matter for the simpler, faster Unilever the company is trying to build.

Dividends and Shareholder returns

Unilever has historically been viewed as a reliable dividend payer in the FTSE 100, and 2025 saw the company return €6.0 billion to shareholders via dividends and Buybacks, as last reported in its results announcement. The board has now approved a new share buyback of up to €1.5 billion, expected to start in Q2 2026, providing further mechanical support to earnings per share over time.

On the dividend itself, Unilever declared a Q1 2026 quarterly interim dividend of €0.4664 per share, in line with the Q4 2025 dividend and 3.0% higher than the Q1 2025 dividend, according to the company. Market data suggests the trailing Yield in sterling terms has been around 3.8% as of mid-May 2026. UK investors should note that the dividend is declared in euros and converted to sterling on payment, so the sterling amount can fluctuate with currency movements.

For investors comparing UK income Options, Unilever does not offer the headline yield of BAT or many of the miners, but it has typically been associated with steadier underlying growth and a strong brand-backed cash flow profile. The new €1.5 billion buyback represents another lever for returning capital while still leaving room for investment in product innovation, marketing and bolt-on M&A.

As ever, dividend policies can change, and buyback programmes are subject to board discretion and market conditions. Past distributions are not a reliable indicator of future returns.

Valuation and market position

Following the ice cream demerger, Unilever s valuation has to be looked at on a like-for-like basis using the share consolidation. The company has positioned itself as a higher-quality, more focused consumer goods group. Investors will increasingly judge the new Unilever on its ability to deliver growth in the mid-single-digit range at improving margins, with continued cash returns through dividends and buybacks.

In market-position terms, Unilever is one of the largest consumer goods companies in the world, with strong positions across beauty and wellbeing (including premium beauty brands), personal care, home care, and nutrition. Its emerging-market footprint, particularly in India, Indonesia and Latin America, is one of the defining features of the group.

Valuation multiples for the new Unilever are likely to be reassessed as more clean comparable quarters are reported. The market has typically given Unilever a premium versus the broader FTSE 100, and the question now is whether that premium can persist or grow as the company executes on its sharper focus.

Sector trends shaping Unilever

Several sector themes are highly relevant for Unilever right now:

  • Premiumisation in beauty and wellbeing: Higher-margin beauty and prestige skincare brands have become a strategic priority, in part to balance lower-growth categories.
  • Health-focused nutrition: Consumer appetite for protein, natural ingredients and reduced sugar is reshaping food portfolios across the industry.
  • Portfolio simplification: Big consumer goods groups are spinning off slower-growth or capital-intensive businesses, with Unilever s ice cream demerger one of the most visible examples.
  • Emerging-market dynamics: Currency movements and Inflation patterns in emerging markets continue to be a material Factor in reported growth and margins.
  • Sustainability and packaging: Plastic, recycling and decarbonisation goals are increasingly tied to capital allocation and product design.

Risks to watch

Investors may want to keep an eye on the following risk areas:

  • Execution risk on the new operating model: Delivering sustained mid-single-digit growth at improving margins is the central promise; any sustained miss could weigh on sentiment.
  • Currency volatility: Unilever reports in euros and earns heavily in emerging-market currencies, which can swing reported turnover and EPS.
  • TMICC stake sell-down: How and when Unilever monetises its residual stake in The Magnum Ice Cream Company could affect capital allocation flexibility.
  • Private-label competition: Cost-of-living pressures in some markets have driven consumers to cheaper supermarket own-label brands.
  • Regulation: Marketing rules on certain food and drink categories, plus packaging and sustainability regulation, can impose ongoing cost pressure.