Prices have not peaked yet, says CEO of one of the world’s largest consumer goods firms
Unilever CEO Alan Jope photographed at the World Economic Forum in May 2022.
Hollie Adams | Bloomberg | Getty Images
The CEO of consumer goods giant Unilever said Tuesday that prices would likely continue to rise in the near term, adding that his firm had a playbook for high inflation thanks to its business dealings in markets like Argentina and Turkey.
Speaking to CNBC’s Joumanna Bercetche at the World Economic Forum in Davos, Switzerland, Alan Jope talked about how his firm was managing its operations in the current climate.
“For the last 18 months we’ve seen extraordinary input cost pressure … it runs across petrochemical derived products, agricultural derived products, energy, transport, logistics,” he said.
“It’s been feeding through for quite some time now and we’ve been accelerating the rate of price increases that we’ve had to put into the market,” he added.
“So far, the consumer response in terms of volume softness has been very muted, the consumer has been very resilient,” Jope said.
“We do see the prospect of higher volume elasticity as winter energy costs hit, as households’ savings levels come down and that buffer goes away and as prices continue to rise,” he said.
Last October, Unilever published its third-quarter results for 2022, with the firm reporting price growth of 12.5%.
Jope was asked if he foresaw any moderation when it came to inflationary pressures. “It’s very hard to predict the future of commodity markets,” he replied.
“Even if you press the oil major CEOs, they’ll be a little cagey on giving an outlook on energy prices.”
Unilever’s view, he said, was that “we know for sure there’s more inflationary pressure coming through in our input costs.”
“We might be, at the moment, around peak inflation, but probably not peak prices,” he went on to state.
“There’s further pricing to come through, but the rate of price increases is probably peaking around now.”
Unilever has a global footprint and owns brands including Ben & Jerry’s, Magnum and Wall’s.
During his interview with CNBC, Jope touched upon the international dimension of his business and how the experience of operating in a range of markets was steering it through the current climate.
“Nobody running a business at the moment has really lived through global inflation, it’s a long time since we’ve had global inflation,” he said.
“But we’re used to high levels of inflation from doing business in places like Argentina, or Turkey, or parts of Southeast Asia,” he added.
“So we do have a playbook, and the playbook is that it’s important to protect the shape of the P&L by landing price.”
“And so it’s not that we’ve taken more price, we just started acting earlier than many of our peers, and the guidance that we’ve been getting from our investors is they support that and feel that that’s an appropriate action.”
This, Jope explained, was “something we have learned from being in these high inflationary markets, though … much of that inflation is currency weakness, historically.”
“But now those markets are having to deal with the combination of commodity pressure and currency weakness. So our instinct is to act quickly when costs start coming through.”
Saudi Aramco’s Ras Tanura oil refinery and oil terminal
Ahmed Jadallah | Reuters
Saudi state oil giant Aramco reported a 15.4% drop in net profit in the third-quarter on the back of “lower crude oil prices and weakening refining margins,” but maintained a 31.05 billion dividend.
The company reported net income of $27.56 billion in the July-September period, topping a company-provided estimate of $26.9 billion. The print is also a 5% drop from the previous quarter, which came in at $29.1 billion, as lower global oil prices, weaker demand and prolonged OPEC+ production cuts led by Saudi Arabia continue to impact crude prices.
The average selling price of oil for the second quarter of 2024 stood at $85 per barrel, but dropped to $78.7 per barrel during the third quarter, according to Saudi-based bank Al Rajhi capital, as non-OPEC supply volumes grew.
The oil firm said its year-on-year decline was partly offset by a “reduction in selling, administrative and general expenses primarily driven by a gain from derivative instruments, and a decrease in production royalties largely reflecting lower crude oil prices and a lower average effective royalty rate compared to the same quarter last year.”
Aramco’s dividend includes a base payout of $20.3 billion and an atypical performance-linked one of $10.8 billion. The Saudi government and the kingdom’s sovereign wealth vehicle, the Public Investment Fund, are the main beneficiaries of the dividend, holding stakes of roughly 81.5% and 16% in the company.
The remaining shareholding trades freely on Saudi Arabia’s Tadāwul stock exchange, with the company having finalized its second public share offering back in June.
Aramco’s earnings before Interest and Taxes (EBIT) came in at $51.45 billion in the third quarter, down 17% year-on-year. Aramco’s capital expenditure guidance was brought up 20% to $13.23 billion.
The company was trading at 27.45 riyals following the announcement, down 0.18% on the previous day.
The earnings align with a broader trend across oil majors, whose third-quarter profits have also suffered from declines in crude prices and refining margins. Aramco said it achieved average realized crude price of $79.3 per barrel in the third quarter, compared with $89.3 per barrel in the same period of last year.
Saudi Arabia, the world’s largest crude exporter who produces roughly 9 million barrels per day of crude at present, serves as the de facto leader of the OPEC+ oil producers’ alliance, a subset of whom agreed over the weekend to delay a planned December output hike by one month.
“Aramco delivered robust net income and generated strong free cash flow during the third quarter, despite a lower oil price environment,” CEO Amin Nasser said in a statement. “We also progressed our upstream developments, strengthened our downstream value chain, and advanced our new energies program as we continue to invest through cycles.”
The revenues will be a boon to the Saudi economy, which is currently undergoing a diversification process under Crown Prince Mohammed bin Salman’s legacy Vision 2030 scheme spanning a slew of high-cost infrastructure “gigaprojects.”
Earlier this year, Saudi Arabia’s Ministry of Finance cut the kingdom’s growth forecast to 0.8% in 2024, in a steep decline from a previous projection of 4.4%, and raised the outlook for the national budgetary shortfall to roughly 2.9% of GDP, from a prior indication of 1.9%.
On today’s episode of Quick Charge, Tesla’s Cybertruck is now available in Canada – and, like in the US, there’s no waiting! Plus, we’ve got an “actually” smart summon Tesla that’s actually stuck, GM reaches a sales milestone, and we get a brand-new title sponsor!
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![This 'supercharger on wheels' brings fast charging to you [update]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2024/05/EV-mobile-charging-with-Yoshi-Mobility-3.jpg?resize=1200,628&quality=82&strip=all&ssl=1)
Mobile car care company Yoshi Mobility launched a DC fast charging EV mobile unit that it likens to “a supercharger on wheels.”
November 4, 2024 update: Yoshi Mobility will only be charging EVs on the side of the road now – it announced today that it’s selling its fleet fueling operation to EZFill Holdings (Nasdaq: EZFL).
It was originally founded as a direct-to-consumer, mobile fueling business in 2016, but now it’s going to focus on mobile EV charging, virtual vehicle inspections for partners like Uber and Turo, and onsite preventative maintenance.
Bryan Frist, Yoshi Mobility’s CEO & cofounder, said, “By spinning off our fuel business and focusing all of our energy on solving hair-on-fire problems that fleet owners face, we are meeting the changing needs of enterprise customers while making the future of transportation safer, cleaner, and more sustainable.”
May 22, 2024: Yoshi Mobility saw that its existing customers needed mobile EV charging in places where infrastructure has yet to be installed, so the Nashville-based company decided to bring the mountain to Moses.
“We recognized a demand among our customers for convenient daily charging, reliable private charging networks, and proper charging infrastructure to support their fleet vehicles as they transition to electric,” said Dan Hunter, Yoshi Mobility’s chief EV officer and cofounder.
The company says its 240 kW mobile DC fast charger, which can turn “any EV” into a mobile charging unit, is the first fully electric mobile charger available. It can provide multiple charges in a single trip but doesn’t detail how they charge the DC fast charger or who manufactured it. (I asked for more details, and they replied that they won’t disclose client names or the manufacturer of its DC fast charger yet.)
Yoshi is launching its mobile charger on two GM BrightDrop Zevo 600s and will introduce additional vehicles throughout 2024. It aims for full commercialization by Q1 2025. (I wonder if the Zevo 600 ever charges itself? Yes, I asked that too.)
Yoshi Mobility says it’s already deployed its EV charging solutions to service “major OEMs, autonomous vehicle companies, and rideshare operators” across the US. Its initial customers are made up of large EV operators managing “hundreds” of light-duty vehicles requiring up to 1 megawatt of energy per day that don’t yet have grid-connected EV chargers. I’ve asked Yoshi for details of who it’s working with, and will update if they share that info.
The company says pricing is based on location and enterprise charging needs. Once under contract for service, the service will be deployed to US-based customers within 10 days.
To date, Yoshi Mobility has raised more than $60 million, with investments from GM Ventures, Bridgestone, ExxonMobil, and Y-Combinator in Silicon Valley.
Read more: Mercedes-Benz just opened more DC fast chargers at Buc-ee’s in Texas
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