Unilever sees consistent growth in first half

Unilever’s results for the first half of 2019 show underlying sales growth of 3.3%, led by its emerging market business which grew 6.2%.

CEO Alan Jope said: “We have delivered consistent growth within our guided range for 2019, led by our emerging markets. Accelerating growth remains our top priority and we continue to evolve our portfolio and seek out fast growth channel and geographical opportunities, as well as address those performance hotspots where growth is falling short of our aspirations.

“For the full year, we continue to expect underlying sales growth to be in the lower half of our multi-year 3-5% range, an improvement in underlying operating margin that keeps us on track for the 2020 target and another year of strong free cash flow. Our sustainable business model and portfolio of purpose-led brands are key to delivering superior long-term financial performance.”

Growth in Unilever’s markets was mixed. Market growth in Europe and North America was held back by the impact of weather on ice cream sales, while in emerging markets the company continued to see good momentum particularly in China and South East Asia. India saw strong market growth, though it moderated, as expected. Argentina remains hyperinflationary and high levels of pricing continue to weigh on consumer demand.

Unilever overall performance

Underlying sales grew 3.3% with 1.2% from volume and 2.1% from price. Emerging markets grew 6.2%, led by Asia/AMET/RUB, which saw broad-based geographic growth, whilst developed markets were weaker.

Turnover in the first half decreased 0.9% driven by the sale of the spreads business, partially offset by a currency benefit of 1.1%.

Foods & Refreshment

Underlying sales in the Food & Refreshment division grew 1.3%.

In tea, sales declined with volumes impacted by weak consumer demand in developed markets. This was partially offset by black tea in emerging markets and our fruit, herbal and green tea ranges, including Pukka’s premium herbal offering.

Sales in dressings were flat with volumes slightly down as competitive intensity remained high.

Despite poorer weather in the second quarter compared to the previous two years, ice cream grew slightly over the half. Ice cream saw good performance in Asia/AMET/RUB and from innovations such as Magnum White Chocolate and Cookies.

Savoury performance was helped by the launch of new snack pot variants meeting the trend towards convenience.

The introduction of Hellmann’s Burger and Spicy Dipping sauces continue to broaden the brand beyond core mayonnaise, and Sir Kensington’s performed well.

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