Unilever recently announced its results for the first half of 2024. Hein Schumacher, CEO, Unilever said, “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.”
Power Brands (~75% of turnover) led growth with 5.7% USG and volumes up 4.0% and turnover increased 2.3% to €31.1 billion. Brand and marketing investment went up 180bps to 15.1%, focused on Power Brands. The global FMCG major owns brands like Dove, Sunsilk, Axe, Surf, Knorr, Magnum, Rexona and Lifebuoy.
“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,” Schumacher said.
“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.”
Results highlights
Underlying sales growth in the first half was 4.1%, led by volume of 2.6% and price of 1.6%. The company delivered its third consecutive quarter of positive, improving volume growth, with UVG up 2.9% in Q2, increasing from 2.2% in Q1 and 1.8% in Q4 2023. Four of its five business groups delivered positive volume growth in Q2. As expected, underlying price growth continued to moderate from 2.8% in Q4 2023 to 1.0% in Q2.
The Power Brands performed strongly with 5.7% underlying sales growth, driven by volume growth of 4.0% in H1. Unilever’s other brands also saw a sequential volume improvement to -1.1% in Q2, up from -2.0% in Q1.
Beauty & Wellbeing grew underlying sales by 7.1%, with volume growth of 5.5% driven by continued double-digit growth from Health & Wellbeing and Prestige Beauty combined. In Q2, particularly strong growth in Health & Wellbeing more than offset softer growth in Prestige that reflected a slowdown in the US beauty market. Personal Care grew 5.6% with 2.9% from volume, led by continued strong sales growth of Deodorants. Home Care underlying sales increased 3.3%, with 4.6% volume growth more than offsetting the negative price growth linked to commodity cost deflation in some emerging markets.
Nutrition grew underlying sales by 3.2%, driven by price with flat volume for the first half. Nutrition returned to positive volumes in Q2 at 0.4%, up from -0.4% in Q1. Ice Cream continued to focus on operational improvements. Underlying sales growth was 0.6% with volume down -1.0%, driven by weak sales in China and a softer start to the summer season in Europe.
Emerging markets (59% of Group turnover) grew underlying sales 5.1%, with 3.8% from volume and 1.3% from price. India grew 1.2%, with stronger volumes partially offset by price. Lower input costs led to negative price, while volumes in India sequentially improved throughout the first half, reaching 3.8% in Q2. Latin America grew 8.8%, with continued strong volume growth across the region. Africa and Turkey delivered broad-based, double-digit growth, driven by strong volume and price.
Growth in South East Asia was adversely impacted by a sales decline of -5.7% in Indonesia, where some consumers avoided the brands of multi-national companies in response to the geopolitical situation in the Middle East. China declined mid single-digit, due to market weakness across all categories apart from food service.
Developed markets (41% of Group turnover) grew underlying sales 2.8% with 0.8% from volume and 2.0% from price. The return to positive volume growth reflected a continued resilient performance in North America and a marked volume improvement in Europe, up 2.2% in Q2. As expected, price growth continued to moderate from the peak in Q2 2023.
Unilever’s turnover was €31.1 billion, up 2.3% versus the prior year, including -1.1% from currency and -0.7% from disposals net of acquisitions.