Unilever On Thursday morning, the consumer products giant raised its full-year profit guidance and said the spin-off of its ice cream business is expected to be completed by the end of 2025.
The stock was up nearly 8% in the morning, but gains had fallen back to around 6.5% by 12:15 pm in London.
The company owns brands such as Dove, Ax, Hellmann’s, Knorr, Domestos, Marmite and Vaseline, and various market segments. sales have increased. First half results Published Thursday. Beauty and health products grew 7.1%, while ice cream lagged other segments, with sales rising just 0.6% (including price) and volumes down 1%.
Unilever said the performance of its ice cream business, which accounts for 15% of the group’s turnover, was “disappointing”. Back in March, the company announced it would spin off the division, which includes Ben & Jerry’s and Magnum, to streamline its operations in beauty and wellness, personal care, home care and nutrition.
“We’re seeing good sales growth… sequential improvements. But prices are a little subdued, which is also a result of commodity basket inflation being significantly lower than what we’ve seen in the past few years,” said Unilever CEO Hein Hein Schumacher spoke to CNBC’s Silvia Amaro about the results Thursday.
“When we see that we’re also focused on competitiveness. If we can give that back to the consumer, then we’ll do that.”
Unilever raised prices across product categories early in the inflation cycle over the past three years, citing “unusual” input cost pressures in agri-food, energy, transport and logistics.
Underlying price growth in the second quarter of this year was 1%, compared with 8.2% in the same period in 2023.
Unilever’s second-quarter organic sales grew 3.9%, below the company’s consensus forecast of 4.2% growth.
Analysts at Jefferies said the results would be overshadowed by the company’s gross margin growth in the quarter and an increase in profit margin guidance to “at least 18% for the full year.” The company had expected “modest expansion” in operating margins during the period.
“We believe this margin commitment will result in consensus (earnings per share) upside of 7-8%,” the analysts said.
The company said in Thursday’s results that strong first-half gross margin growth reflected sales leverage and net productivity, as well as factors that won’t persist in the second half, such as lower comparative years when input costs are higher.
“We’re very focused on margin expansion, energizing our brands and increasing marketing investment behind our top brands,” Schumaker told CNBC. “That’s what we’ve seen in the first six months of the year.”
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