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Unilever Shows Consistent Growth Led by Emerging Markets

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Unilever Shows Consistent Growth Led by Emerging Markets

Unilever Shows Consistent Growth Led by Emerging Markets
July 25
12:18 2019

Unilever has reported a 0.9% decrease in group turnover to €26.1 billion for the first half of 2019, reflecting the sale of its spreads business, partially offset by a 1.1% currency benefit. Underlying operating margin improved by 50bps to 19.3%.

Growth in global markets was mixed. Market growth in Europe and North America was held back by the impact of weather on ice cream sales. In the emerging markets Unilever continued to see good momentum particularly in China and South East Asia. India saw strong market growth, though it moderated, as expected. Argentina remains hyper-inflationary and high levels of pricing continue to weigh on consumer demand. Group underlying sales grew 3.3% with 1.2% from volume and 2.1% from price.

Alan Jope (pictured), chief executive of Unilever, says: “We have delivered consistent growth within our guided range for 2019, led by our emerging markets. 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.”

Underlying sales at Unilever’s Foods & Refreshment business grew by 1.3% to €10 billion, with -0.1% from volume and 1.4% from price. In tea, sales declined with volumes impacted by weak consumer demand in developed markets. This was partially offset by black tea in emerging markets and Unilever’s fruit, herbal and green tea ranges, including Pukka’s premium herbal offering.

Sales in dressings were flat with volumes slightly down as competitive intensity remained high. Despite poorer weather in the second quarter compared to the previous two years, ice cream grew slightly over the half. Unilever saw good ice cream performance in Asia/AMET/RUB and 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. The introduction of Hellmann’s burger and spicy dipping sauces continue to broaden the brand beyond core mayonnaise, and Sir Kensington’s performed well. Underlying operating margin in Foods & Refreshment decreased by 40bps, as a result of an adverse impact on overheads related to the disposal of the spreads business.


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