Unilever Reports Improved Second-Quarter Sales

23 Jul 2015 --- Unilever has reported higher-than-expected quarterly sales, driven by gains in its home and personal care units, and stood by its full-year outlook. Turnover increased 12% to €27.0 billion including a positive currency impact of 10%. Underlying sales growth at 2.9% with emerging markets up 6.0%, with underlying volume growth at 1.1% and pricing up 1.7%.

Commenting on the results, Unilever CEO Paul Polman says: “The first half demonstrates again the progress we have made in the transformation of Unilever to deliver consistent, competitive, profitable and responsible growth, now in the seventh year.

“During the past six months we have also made major progress in the establishment of our Prestige Personal Care business with the announced acquisitions of Dermalogica, Murad, Kate Somerville and REN.

“We plan for another year of volume growth ahead of our markets, steady improvement in core operating margin and strong cash flow.”

The company noted that consumer demand remains weak and volumes are flat in the markets in which they operate. “Emerging markets continue to be subdued, while in Europe and North America growth is negligible.”

Underlying sales growth in the first half was broad-based across the four categories. While growth in Refreshment was due to price, volumes drove the performance in Home Care and Foods.

Emerging markets grew by 0.0% with an increased contribution from volume. Unilever held volumes in developed markets as pricing continued to decline in Europe.

The first-half results show how all our categories are contributing to the overall performance as we implement the sharpened strategy.

In Foods, Savoury showed broad-based growth helped by the success of cooking products in emerging markets and soups in Europe. Growth was driven by innovations and market development campaigns behind their global and local brands. The company are introducing more natural products like Knorr wet soups and healthier ones such as fortified stock cubes in Africa which help address iron deficiency.

In dressings, Hellmann’s demonstrated good growth driven by a strong performance in Latin America and by the successful squeezy packaging which we have brought from Europe to North America. Spreads performance was impacted by the sustained contraction in developed markets.

The new Baking, Cooking & Spreads unit, which went live on 1 July, will benefit from future focus as it continues to reposition the business to more attractive segments like mélanges and premium cooking oil blends.

Refreshment grew solidly in value despite volumes being slightly down against a strong prior year performance.

“We upgraded the mix in ice cream with innovations behind the premium brands, such as Magnum Pink and Black variants, Ben & Jerry’s Cores range and the new flavours of Breyer’s Gelato. The recent acquisition of Talenti started off well, benefiting from increased distribution in the United States.”

“In leaf tea we refreshed the Lipton brand with new packaging and extended the premium tea boutiques T2. At the same time we are building our presence in faster growing segments where we are underrepresented like green tea."