Unilever delivers underlying growth despite tough markets

25th Jul 2013 07:23

Consumer products giant Unilever delivered robust growth in underlying sales in the first half and improved margins despite admitting that the economic environment remains tough. "This set of results clearly demonstrates that the transformation of Unilever to a sustainable growth company is fully on track," said Chief Executive Officer Paul Polman.Turnover totalled €25.50bn in the six months ended June 30th, up 0.4% from the year before, but 5.0% higher on an underlying basis as strong growth in Personal Care and Home Care offset weaker performances in Foods and Refreshment.Underlying volumes increased by 2.6%, while pricing improved by 2.3%.The core operating margin rose 40 basis points (bp) to 14%, helped by a strong improvement in Home Care margins (+170bp). Polman said that the firm's focus on margins is starting to "bear fruit": "we are delivering more profitable innovations, improving mix and continuing to apply a rigorous approach to supply chain costs and savings," he said.Profit before tax increased by 14% to €3.66bn.However, Unilever admitted that growth was slowing in emerging markets - its fastest growth region - "as macroeconomic headwinds influence consumer behaviour". Meanwhile developed markets have remained "sluggish" with little sign of any recovery in North America or Europe, the firm said.In Europe in particular, where underlying sales fell 1.9% in the first half, the company said that it continued to see that highly price-conscious consumers are "reluctant to spend unless products offer good value for money".BC