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Unilever PLC on Tuesday guided for strong annual sales growth as it reported double-digit interim profit growth, while volumes stayed steady from the prior year.
The London-based consumer goods firm said pretax profit jumped 21% to £5.27 billion in the first half, from £4.36 billion a year before.
Shares in Unilever were up 5.0% at 4,218.50 pence each in London on Tuesday morning.
Turnover rose 2.7% year-on-year to £30.43 billion, compared to £29.62 billion. This included a currency headwinds of 3.2%, as well as a 2.7% headwind from disposals net of acquisitions.
A strong performance in Beauty & Wellbeing and Personal Care, which rose 8.6% and 7.3%, helped to offset a 7.1% decline in Nutrition sales.
On an underlying basis, sales grew 9.1%, with 9.4% growth in price but a 0.2% slip in volumes.
‘As underlying price growth has sequentially moderated from 13.3% in the fourth quarter of 2022, volumes were virtually flat with a step-up in performance in Beauty & Wellbeing and Personal Care offsetting volume declines elsewhere,’ Unilever said.
It maintained its quarterly interim dividend for the second quarter at €0.43.
Looking ahead, Unilever expects another year of ‘strong’ underlying sales growth of above 5% in 2023, which is ahead of its multi-year range. It’s also ahead of its April guidance for the upper end of a 3% to 5% range. Underlying price growth is expected to continue moderating over the year.
It expects around €2 billion in net material inflation in 2023, with €400 million to come in the second half. Underlying operating margin for the year is expected to see a ‘modest’ improvement, thanks to a higher gross margin and increased brand investment.
‘Unilever’s performance in the first half highlights the qualities that attracted me to the business: an unmatched global footprint, a portfolio of great brands and a team of talented people,’ said Chief Executive Officer Hein Schumacher.
Schumacher, the former Royal FrieslandCampina NV boss, joined as its new chief executive at the beginning of July. He replaced Alan Jope, who announced his retirement back in September.
‘The task ahead is to leverage these core strengths - supported by our simplified operating model - to drive improved performance and competitiveness. This is our absolute priority and it will mean bringing greater focus and sharper execution, with science-backed innovations and investment behind our brands,’ Schumacher said.
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