Maker of Marmite, Magnums and Ben & Jerry’s ice cream ups sales guidance

Unilever, the maker of Dove Soap and Knorr stock cubes, has raised it sales guidance for the year after reporting underlying sales growth of 8.1% despite the challenges of high inflation and slower global growth.

The group, which operates a key home and personal care manufacturing site at Port Sunlight, Wirral, said strong first half-year  sales were driven by a hike in prices to counter soaring costs.

For the six months to the end of June 2022, turnover increased 14.9% to €29.6bn, which included a currency impact of 5.6% and 0.6% from acquisitions net of disposals.

Underlying operating profit was €5bn, up 4.1% versus the prior year.

During the period the household goods and food conglomerate announced the sale of its global tea business, ekaterra, and completed the acquisition of a majority stake in Nutrafol, a leading provider of hair wellness products.

CEO Alan Jope said: “Unilever has delivered a first half performance which builds on our momentum of 2021, despite the challenges of high inflation and slower global growth.

“Underlying sales growth of 8.1% was driven by strong pricing to mitigate input cost inflation, which, as expected, had some impact on volume. We are now raising our sales guidance for the year. Underlying operating margin was on track at 17% for the first half.

“We have made further progress against our strategic priorities. We are maintaining strong investment in our brands, supporting 9.4% underlying sales growth in our billion+ Euro brands.

“eCommerce sales now represent 14% of turnover, up from 6% in 2019.

“Of our three priority markets, the USA and India again grew strongly, while sales in China were affected by the lockdowns in the second quarter.

“We continue to reshape our portfolio, completing the sale of the global tea business ekaterra, and the acquisition of Nutrafol, a leading provider of hair wellness products. Prestige Beauty and Health & Wellbeing, now 4% of Group turnover, again grew double-digit.”

He added: “Our simpler, more category-focused organisation came into effect as planned on 1 July. This major change to Unilever’s operating model is an important further step that will underpin the delivery of consistent growth, which remains our first priority.

“The challenges of inflation persist and the global macroeconomic outlook is uncertain, but we remain intensely focused on operational excellence and delivery in 2022 and beyond.”

Roberto Rivero, Market Analyst at Admirals said: “Whilst turnover was forecast to increase in the first half of 2022, there were question marks over whether this increased turnover would translate into higher profits, which, impressively, it has.