Unilever shareholders have reacted positively as the consumer goods giant outperformed City expectations today, signalling progress with its ongoing turnaround.
A 3.4% rise in underlying sales growth in the first half of 2025 to take turnover to €30.1bn was driven by a 1.5% boost to volumes and the rest coming from higher prices.
Ice cream was the star performer for Unilever in six months to June as sales in the division, which will not be part of the wider group for much longer, shot up 5.9%, significantly ahead of market forecasts. Sales in the second quarter soared 7.1% as volumes jumped 5%.
Across the half, Magnum led the performance with double-digit growth, while Cornetto grew by high single digits. Magnum has become a status symbol for influencers and fashionistas this summer, with Vogue calling the ice cream brand an “It-girl accessory”.
Ice cream, which makes up 15% of group revenues, also benefitted from new product launches, long spells of good weather and an overhaul in its operations as Unilever prepares to demerge the division in November.
Unilever will hold on to a stake of less than 20% in the new business, known as The Magnum Ice Cream Company, which has been operating standalone since July ahead of a new public listing on the Amsterdam Stock Exchange.
AJ Bell investment director Russ Mould said it was ironic that the one area of Unilever doing best was about to be jettisoned.
“The ice cream arm delivered the strongest growth in both sales and volumes in the second quarter,” he added. “That could help to drive investor interest in The Magnum Ice Cream Company which becomes its own listed entity in November.”
Unilever have been under pressure this year as investors navigated turbulence surrounding the unexpected management change as Fernando Fernandez took over from Hein Schumacher in March.
Shares were down about 3% so far in 2025 before Thursday’s first-half results, which led to a small rally and a rise of more than 1% to 4,514p earlier today. However, the stock ended the day 0.6% down as the price dipped towards end of trading.
“This kind of steady eddy delivery is exactly what we need to see for investors to move on, and refocus on Unilever’s improving long-term prospects,” said Callum Elliott of Bernstein.
He noted strengthening gross margins and a step up in advertising investments in the first half to their highest level in decades.
“With recent scanner data showing that Unilever is now consistently gaining share, and as such further increases in investment from here should serve to reinforce confidence in the turnaround,” Elliott added.
Personal care was an area of worry for Unilever in the half as volume growth slowed from 1.4% in the first quarter to just 0.2% in Q2.
“Unilever has discovered that it doesn’t have pricing power across the business,” Mould said. “Like many companies, Unilever has had to put up prices to offset an increase in raw material costs, but shoppers have been reluctant to keep buying certain brands.
“The world’s best-selling germ protection soap Lifebuoy is one example. While the brand is well known, shoppers have been turned off by higher prices and that’s left Unilever nursing its wounds.”
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