Unilever scoops sales growth in complex environment as Nutrition and Ice Cream resist inflation

25 Jul 2023 --- Unilever has presented its half-year results showing an underlying sales growth close to the double digits (9.1%), amid what the company points out is a “volatile and high-cost environment.” Hellmann’s sauces and Magnum were among the brands that helped to boost sales.

The company expects sales growth above 5% above its multi-year range.

Nutrition and ice cream, which combined represent 37% of Unilever’s turnover, grew considerably (10.4% and 5.4%) as the Chinese market recovered and increased out-of-home ice cream demand.

“My early immersion in the business has confirmed my belief in Unilever’s strong fundamentals,” says Hein Schumacher, CEO at Unilever.

“The task ahead is to leverage these core strengths – supported by our simplified operating model – to drive improved performance and competitiveness. This is our absolute priority and it will mean bringing greater focus and sharper execution with science-backed innovations and investment behind our brands.”

Nutrition and Ice Cream
Unilever Nutrition sales grew thanks to price increases of 12.6%, with negative volume (-1.9%) leading to the final underlying sales growth of 10.4%.

Scratch cooking aids grew in the high single-digits, dressings in the double-digits, with Hellmann’s sauces driving sales during Easter and BBQ seasons “combining the ‘make taste, not waste’ campaign with innovation such as spicy mayonnaise in the US,” explains the business.

The company also highlights its double-digit growth in China in the last quarter.

Hein Schumacher, CEO at Unilever.Similarly, Unilever’s Ice Cream segment grew in price (11.5%) but not in volume (-5.2%), ending with 5.8% growth.

The drop in sales is explained by the lower consumption “due to the discretionary nature of the category in an inflationary environment,” the company explains. Meanwhile, out-of-home consumption grew in the double-digits and with positive volume.

Magnum grew high single-digits, and the company launched Talenti brand, making mini gelato and sorbet bars. Other highlights include the growth of its Heart brand in the mid-single digits, supported by a new plant-based variant in its Twister range.

Last month, Unilever announced it is set to acquire US premium frozen Greek yogurt brand Yasso Holdings.

Emerging market lead
The company’s growth was led by its emerging markets segment, which saw a 10.6% rise in underlying sales, with positive volume growth of 0.6%. 

Latin America, South Asia and China were the main contributors to this growth, while Indonesia faced challenges. 

Turkey also delivered strong volume growth despite high inflation.

In developed markets, Unilever’s underlying sales grew by 6.9%, with price growth of 8.4% and volume decline of -1.4%. The company said that its volumes held up well in North America, while its pricing was higher in Europe due to its exposure to categories with significant cost inflation.

Unilever’s turnover increased by 2.7% to €30.4 billion (US$33.61 billion), which included a negative currency impact of -3.2% and a negative impact of -2.7% from disposals net of acquisitions. The company’s underlying operating profit was €5.2 billion (US$5.75), up 3.3% versus the prior year. 

Edited by Marc Cervera