Unilever’s half year results hit the Walls

Unilever says its underlying sales growth in the first half of 2024 was 4.1%, led by volume of 2.6% and price of 1.6%. Nutrition, which makes up 22% of group turnover, grew underlying sales by 3.2%, driven by price with flat volume for the first half. The segment returned to positive volumes in the second quarter at 0.4%, up from -0.4% in the first quarter

Ice cream, which amounts to 15% of the group turnover, continued to focus on operational improvements, according to the company. Underlying sales growth was 0.6% with volume down by 1%, driven by weak sales in China and a softer start to the summer season in Europe.

Separation activity for ice cream is underway and on track to complete by the end of 2025. “We are working at pace on the legal entity set up, the standalone operating model and carve-out financials. In July, we communicated internally on the planned changes to simplify our business and further evolve our category-focused operating model. We have started consultations with the respective works councils,” Unilever said in its statement.

Wall’s grew mid-single digit with positive volume and price, Ben & Jerry’s was slightly up, while sales of Cornetto were adversely affected by the decline in China. Magnum launched its new Pleasure Express range with three variants: Euphoria, Wonder and Chill.

Underlying operating profit for the ice cream was €0.7 billion, which was flat versus the prior year. The underlying operating margin declined -40bps as gross margin improvement was offset by an increase in brand and marketing investment. The cost inflation of key commodities continued, driven by cocoa and sugar.

Hein Schumacher, CEO at Unilever, notes, “We are focused on driving high-quality sales growth and gross margin expansion, led by our power brands. Over the first half, we made progress on those ambitions.

“Underlying sales grew 4.1%, driven by a third consecutive quarter of positive, improving volume growth, while pricing continued to moderate in line with our expectations. Strong gross margin progression fuelled increased investment behind our innovations, and resulted in a step-up of our profitability.

“We continue to embed the growth action plan, doing fewer things, better and with greater impact. The implementation of a comprehensive productivity programme and the separation of ice cream are key to delivering on that commitment and we are progressing at pace.

“There is much to do, but we remain focused on transforming Unilever into a consistently higher performing business.”

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