Unilever sales were better than expected in the first half of the year, driven by its personal care products and ice cream.
The FTSE 100 company reported underlying sales growth of 3.4%, ahead of analysts’ expectations. This was driven by a volumes boost of 1.5% and price hikes of 1.9%.
The rise helped keep its underlying operating profit at €5.8bn, ahead of analysts’ expectations of €5.7bn. Unilever now anticipates an improvement in profit margins for the full year.
Unilever’s ice cream division – which it will spin off by the end of the year – performed particularly well, with sales up 5.9%.
The ice cream business will be known as The Magnum Ice Cream Company when it lists on the Amsterdam stock exchange, with Unilever set to retain a 20% stake for up to five years.
Unilever is undergoing a turnaround since new CEO Fernando Fernandez took over in March, refocusing on higher-growth divisions and selling underperforming food brands.
Fernandez said on Thursday: “Our priorities are clear: more beauty & wellbeing and personal care; disproportionate investment in the US and India; and a sharper focus on premium segments and digital commerce.
“We are building a marketing and sales machine that drives desire at scale in our power brands and ensures execution excellence across all channels to deliver consistent volume growth and gross margin expansion.”
Personal care remains one of Unilever’s standout performers, with sales up 4.8% in the first half. Dove led the way with “high-single digit” growth.
Beauty & wellbeing was up 3.7%, while foods and home care lagged the rest of the pack.
The company is expecting sales growth to accelerate in the second half of the year due to its improving performance in emerging markets such as India, Indonesia and China.
Unilever said its productivity programme launched in 2024 “remains ahead of plan” to deliver €800m of savings. It expects to have cut €650m by the end of 2025 and the remaining €150m through 2026.
However, its free cash flow has halved to €1.1bn since last year, raising questions about the financial impact of tariffs and the demerger of its ice cream business.
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