Anglo-Dutch consumer goods juggernaut Unilever reported good all-around performance of its businesses despite some challenging market conditions.
Announcing its first half 2018 results, the maker of the Flora and Becel brands said on 19 July that its underlying sales growth (USG) – excluding spreads which Unilever sold off in December 2017 – was 2.7%, driven almost entirely by volumes growth across all of its divisions.
“Our first half results show solid volume-driven growth across all three divisions, which was achieved despite the effect of an extended truckers’ strike in Brazil, one of our biggest markets. Growth was driven by strong innovation and continued expansion in future growth markets,” said Unilever CEO Paul Polman.
The Brazil strike reduced USG in first quarter 2018 by approximately 0.6% and 1.2% in the second quarter, said Unilever.
“As part of the continued portfolio evolution, we completed the exit from spreads on 2 July. In anticipation of the disposal proceeds, we have already returned €3bn (US$3.5bn) as part of our €6bn (US$7bn) share buyback programme that will complete before the end of the year,” Polman added.
Emerging markets grew by 4.1% with an improved contribution from volume of 3.3%, but price growth was modest in a lower inflation environment, the firm said.
In developed markets, Unilever’s sales were up slightly, but volume growth was mostly offset by competitive price deflation in Europe and North America.
The company reported a 5% decrease in turnover to €26.4bn (US$30.9bn), which included an adverse translation currency impact of 8.9% and 1.9% from acquisitions net of disposals.
Within its three divisions, the Foods & Refreshments division continued developing a strong presence in emerging markets and sustained a good performance in food service channels, Unilever said.
It added that it continued to modernise its portfolio in response to fast growing demand segments, such as organic, natural, vegan, health and wellness.
In particular, ice cream delivered strong growth with the launch of new brands and the introduction of the non-dairy Ben & Jerry’s product line in Europe.
In other food brands, Knorr grew ahead of Unilever group average, driven primarily by cooking products in emerging markets.
The Beauty & Personal Care division expanded its portfolio in “attractive segments and channels”, which led to an improvement in volumes in the first half of the year, although growth in the second quartered was hindered by the Brazil truckers’ strike and “challenging conditions” in Europe and Southeast Asia.
The Unilever Home Care division increased its emerging market footprint, with fabric solutions continuing to expand its core brands in fast growing segments, the firm said.