Unilever released its first-half 2016 results on 21 July, reporting underlying sales growth across its grocery and ice cream brands, but continued decline with spreads, just-food said.
The consumer goods giant reported group-wide underlying growth of 4.7% in the six months to end of June.
“Despite a challenging environment with slower global economic growth and intensifying geopolitical instability, we have again grown profitably in our markets,” CEO Paul Polman said.
Unilever conceded that its spreads business continued to decline, attributing this to continued market weakness but stressing that it was working to turn around its brands, just-food said.
"In spreads, Flora highlighted its plant-based health credentials with a new advertising campaign and introduced a dairy-free variant in the UK."
According to the Wall Street Journal, Unilever is the world’s largest margarine maker and a large big part of the problems for spreads is the revival of butter, considered to be more wholesome and natural.
Unilever has tried to stem the decline of its margarine division – said to be worth around US$7bn – by splitting it into a standalone baking, cooking and spreads subsidiary in December 2014, after two years of disappointing growth.
The spreads unit – which includes brands such as Flora, I Can’t Believe It’s Not Butter and Promise – accounted for about 4% of Unilever’s US$58bn in sales in 2015, according to Bloomberg. A new chief was appointed to the unit in January 2016, amid speculation that the company might sell it.
Unilever's total turnover for first-half 2016 was hit by currency exchange headwinds, dropping 2.6% to €26.3bn, just-food said. Operating profit was down 0.1% at €3.8bn. However, net profit increased to €2.7bn, up 2%.
Commenting for the rest of 2016, Polman said: "We have been preparing ourselves for tougher market conditions in 2016 and do not see any sign of an improving global economy. Our priorities continue to be volume-driven growth ahead of our markets, steady improvement in core operating margin and strong cash flow."