Unilever reports strong half-year bolstered by double-digit ice cream growth

22 Jul 2021 --- Unilever is declaring a “strong performance” in its half-year 2021 results, highlighting a boom in its e-commerce business and steady growth in its Foods & Refreshments segment. Despite sales not yet returning to pre-pandemic levels, innovation and marketing in ice cream brands Ben & Jerry’s and Magnum have produced double-digit growth. 

The results come during a time of cost inflation and volatility caused by the COVID-19 pandemic, which has restrained turnover for food sales in most markets. 

Unilever’s overall sales growth was 5.4 percent, with 4.0 percent in volume and 1.3 percent in price. Price growth stepped up in Q2, with turnover increasing 0.3 percent, including a positive impact of 1.4 percent from acquisitions net of disposals and a negative impact of 6.1 percent from currency-related items.

The company’s e-commerce business grew 50 percent, now representing 11 percent of its total sales. 

However, underlying earnings per share were down 2.0 percent, including a negative impact of 6.3 percent caused by currency. 

Unilever points to marketing and innovation success behind the double-digit growth in ice cream sales.Ice cream surge 
Underlying sales in the Foods & Refreshment segment grew 8.1 percent, with 5.8 percent from volume and 2.1 percent from price. Notably, sales of ice cream were strong in many markets, with growth across both in-home and out-of-home products.

Double-digit performances were recorded in Turkey, China and India. Out-of-home ice cream in Europe also grew double-digit as lockdown restrictions have begun to ease, although sales have not yet returned to pre-pandemic levels. 

Magnum and Ben & Jerry’s both grew by double digits. Magnum launched the Miley in Layers campaign with Miley Cyrus. Ben & Jerry’s has produced success through innovation with its “Topped” product range, which features larger chunks and unique patterns and layers.

However, this week Unilever, which owns Ben & Jerry’s, came under fire from the Israeli government after the  ice cream brand decided to halt sales in the Occupied Palestinian Territories. Israeli Prime Minister Naftali Bennett warned of “severe consequences” in reaction to the move, saying it amounts to a boycott.

On track for long-term goals 
Unilever CEO Alan Jupe asserts the half-year results show the company is on track to hit its long-term sales targets.

“Competitive growth is our priority, and we are confident that we will deliver underlying sales growth in 2021 well within our multi-year framework of 3 to 5 percent, despite more challenging comparators in the second half.”

“We have seen further cost inflation emerge through the second quarter,” he continues. “Cost volatility and the timing of landing price actions create a higher-than-normal range of likely year-end margin outcomes.” 

“We are managing this dynamically and expect to maintain an underlying operating margin for 2021 around flat.”

Edited Louis Gore-Langton

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