THE WHAT? Unilever has reported its results for the first half of the current financial year. The UK-based FMCG giant reported underlying sales growth of 5.4 percent to €25.8 billion, with a 4 percent volume increase and 1.3 price uptick.
THE DETAILS The manufacturer of Dove saw underlying operating margin drop 100bps to 18.8 percent, which it attributed to investment behind its brands and input cost inflation. Underlying earnings per share were down 2 percent, including a 6.3 percent negative impact from currency.
Beauty and Personal Care saw sales grow 3.3 percent to €10.4 billion, Home Care was up 4.5 percent and Foods & Refreshment soared 8.1 percent. Drilling down on the Beauty and Personal Care unit’s performance, Unilever said that skin care saw growth in the double digits while deodorants returned to growth.
THE WHY? Alan Jope, CEO, stated, “Unilever has delivered a strong first half, with underlying sales growth of 5.4 percent driven by our continued focus on operational excellence. We are making good progress against the strategic choices outlined earlier this year, including the development of our portfolio into high growth spaces. Prestige Beauty and Functional Nutrition grew strongly and we recently announced the acquisition of digitally-native skin care brand Paula’s Choice. The operational separation of our Tea business is substantially complete. Our ecommerce business grew 50 percent and the channel now represents 11 percent of sales. 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 3-5 percent, despite more challenging comparators in the second half. We have seen further cost inflation emerge through the second quarter. 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 underlying operating margin for 2021 around flat.”