Unilever half year sales grow 3.3% driven by emerging markets

UK – Unilever has announced its half year 2019 results showing underlying sales growth of 3.3%, led by emerging market business which grew 6.2%.

Revenues during the period decreased 0.9% attributed to divestment of its margarine and spreads business to KKR for €6.825 billion (US$8 billion).

Market growth in Europe and North America was held back by the impact of weather on ice cream sales.

In the emerging markets, Unilever registered good momentum particularly in China and South East Asia while India saw strong market growth, though it moderated, as expected.

The company said in Argentina, performance was impacted by hyperinflation and high levels of pricing which continually impacted on consumer demand.

“We have delivered consistent growth within our guided range for 2019, led by our emerging markets,” said Unilever CEO Alan Jope.

“Accelerating growth remains our top priority and we continue to evolve our portfolio and seek out fast growth channel and geographical opportunities, as well as address those performance hotspots where growth is falling short of our aspirations.

“For the full year, we continue to expect underlying sales growth to be in the lower half of our multi-year 3-5% range, an improvement in underlying operating margin that keeps us on track for the 2020 target and another year of strong free cash flow.

“Our sustainable business model and portfolio of purpose-led brands are key to delivering superior long-term financial performance.”

The second quarter results were weighed down by the 2018 truckers’ strike in Brazil as well as a weak ice cream performance; a result of poorer weather, particularly in Europe.

Turnover in the first half decreased 0.9% driven by the sale of the spreads business, partially offset by a currency benefit of 1.1%.

Sales in the Food & Refreshment division grew 1.3%.

Tea sales declined as a result of weak consumer demand in developed markets, though partially offset by black tea in emerging market and fruit, herbal and green tea ranges, including Pukka’s premium herbal offering.

Sales in dressings were flat while ice cream performed well in in Asia/AMET/RUB from innovations such as Magnum White Chocolate and Cookies.

Savoury performance was helped by the launch of new snack pot variants meeting the trend towards convenience.

In the period, Unilever launched Hellmann’s Burger and Spicy Dipping sauces, which together with Sir Kensington’s performed well.

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