Unilever first half 2015 results: Good performance in challenging conditions
- Turnover increased 12% to ?27.0 billion including a positive currency impact of 10%
- Underlying sales growth at 2.9% with emerging markets up 6.0%
- Underlying volume growth at 1.1% and pricing up 1.7%
Commenting on the results, Unilever CEO Paul Polman says: "The first half demonstrates again the progress we have made in the transformation of Unilever to deliver consistent, competitive, profitable and responsible growth, now in the seventh year.
"During the past six months we have also made major progress in the establishment of our Prestige Personal Care business with the announced acquisitions of Dermalogica, Murad, Kate Somerville and REN.
"We plan for another year of volume growth ahead of our markets, steady improvement in core operating margin and strong cash flow."
Our markets
Consumer demand remains weak and volumes are flat in the markets in which we operate. Emerging markets continue to be subdued, while in Europe and North America growth is negligible.
Unilever performance
Underlying sales growth in the first half was broad-based across our four categories. While growth in Refreshment was due to price, volumes drove the performance in Home Care and Foods.
Emerging markets grew by 6.0% with an increased contribution from volume. We held volumes in developed markets as pricing continued to decline in Europe.
The first-half results show how all our categories are contributing to the overall performance as we implement the sharpened strategy.
Personal Care
Personal Care growth was driven by volume and price. We have a strong innovation pipeline and expect an acceleration in growth in the second half of the year. Innovations are both growing the core of our brands and extending into new segments.
Good growth in deodorants has been supported by the successful dry spray launch in North America and our compressed formats, which we are now rolling from Europe into Latin America. The Dove Advanced Hair Series, is establishing itself well across the world, most recently in Asia. TRESemmé is extending its reach to more premium ranges with the Perfectly (Un)done and Runway collections.
The new Lifebuoy with Activ Naturol offering superior germ kill is helping to grow the brand.
Foods
Savoury showed broad-based growth helped by the success of cooking products in emerging markets and soups in Europe. Growth was driven by innovations and market development campaigns behind our global and local brands. We are introducing more natural products like Knorr wet soups and healthier ones such as fortified stock cubes in Africa which help address iron deficiency.
In dressings, Hellmann's demonstrated good growth driven by a strong performance in Latin America and by the successful squeezy packaging which we have brought from Europe to North America. Spreads performance was impacted by the sustained contraction in developed markets.
The new Baking, Cooking & Spreads unit, which went live on 1 July, will benefit from future focus as it continues to reposition the business to more attractive segments like mélanges and premium cooking oil blends.
Refreshment
Refreshment grew solidly in value despite volumes being slightly down against a strong prior year performance.
We upgraded the mix in ice cream with innovations behind the premium brands, such as Magnum Pink and Black variants, Ben & Jerry's Cores range and the new flavours of Breyer's Gelato. The recent acquisition of Talenti started off well, benefiting from increased distribution in the United States.
In leaf tea we refreshed the Lipton brand with new packaging and extended the premium tea boutiques T2. At the same time we are building our presence in faster growing segments where we are underrepresented like green tea.
Home Care
Home Care delivered broad-based growth led by innovations in higher margin segments such as machine specialist detergents and fabric conditioners.
The roll-out of the new Omo with enhanced formulation and improved cleaning technology continued in Latin America and Asia while Omo pre-treaters have built further market share in Brazil. Fabric conditioners performed strongly helped by the launch of Comfort intense, a super-concentrated product that delivers long-lasting freshness.
In household care we took Cif's improved 'Power and Shine' formulation into 15 European countries.
