Unilever Helped by Higher Prices as Q2 Sales Grow 4.7 Percent

21 Jul 2016 --- Unilever said its sales grew 4.7 percent in Q2, beating analysts’ estimates, as it benefited from higher prices of its products although it suffered from weak demand in a number of markets.

The Ben & Jerry's maker said sales were up 4.7 percent in Q2 to €13.7bn ($15bn) and were up 4.7 percent in the first half of the year to €26.3bn ($28.2bn).

Net profits in the first half at the Anglo-Dutch company were up 2 percent to €2.7bn ($3bn).

Paul Polman, chief executive, said: "“Our first half results further demonstrate the progress we have made in the transformation of Unilever to deliver consistent, competitive, profitable and responsible growth.”

“Despite a challenging environment with slower global economic growth and intensifying geopolitical instability, we have again grown profitably in our markets, competitively and driven by strong innovations. “

"This consistency of performance, achieved during a period of high volatility and accelerating change, shows that our long-term focus is paying off. We are seeing the benefits from delivery against the four differentiated category strategies that continue to guide investment in our brands, our infrastructure and our people.”

"We have been preparing ourselves for tougher market conditions in 2016 and do not see any sign of an improving global economy. Against this backdrop we continue to drive agility and cost discipline, implementing the key initiatives announced at the end of last year: net revenue management, zero based budgeting and ‘Connected 4 Growth’ which is the next stage in our organisational transformation. Our priorities continue to be volume-driven growth ahead of our markets, steady improvement in core operating margin and strong cash flow.”

Market volume growth was problematic for Unilever in Europe, North America and emerging markets in the period.

Across its foods products, which accounted for €6.2bn ($6.8bn) sales in the first half, there was a good performance in savoury and dressings but spreads continued to suffer a decline due to a shrinking in the overall market.

Savoury showed good growth driven by cooking products in emerging markets, innovations around naturalness such as Knorr Mealmakers with 100% natural ingredients in Europe and its local brands such as Bango in Indonesia and Robertsons in South Africa.

Hellmann’s grew strongly in dressings helped by the sale of new packaging formats, the launch of Carefully Crafted and Organic variants as well as the expansion into Italy and Belgium.

Ice cream delivered good growth driven by innovations behind premium brands, such as the new Magnum Double range, the Ben & Jerry’s ‘Wich sandwich and dairy free range, as well as premium desserts under Breyer’s Gelato and Carte D’Or Sorbet.

Unilever yesterday struck a $1bn deals to buy men’s grooming start-up Dollar Shave Club.