Unilever’s second quarter revenues declined 4.8% year over year to $17.4 billion, impacted by unfavorable currency declines of 8.1%. The company delivered organic sales growth of 3.8% in the quarter, driven by organic volume and pricing gains of 1.9% and 1.9%, respectively.
For the first half of the year, Unilever profits rose 12% to $4.11 billion, despite sales falling 5.5% for the time period.
Paul Polman, Unilever Chief Executive officer, addressed first half performance in a company statement, stating that Personal Care continued to grow ahead of slowing markets underpinned by strong innovation, namely deodorants, which saw the continued success of the compressed aerosol range in Europe, good growth for Rexona with the successful Do:More campaign, the positive impact of new communication behind Dove Invisible Dry and the introduction of new packaging for Axe. In oral care, Unilever introduced a new brand, REGENERATE Enamel Science, in the United Kingdom, a premium proposition. In hair, Clear has been successfully introduced in Japan and re-launched in key markets such as Brazil and China. TRESemmé benefited from the success of the 7-Day Keratin Smooth range, and Dove Oxygen Moisture made good progress in the United States. Skin cleansing saw continued strong growth for Lifebuoy reflecting the success of the proposition to protect against 10 infection causing germs and the introduction of the brand in China. Dove continued to deliver broad-based growth and Lux benefited from the re-launch in China and South East Asia. In skin care Fair & Lovely delivered strong growth and the Dove Purely Pampering range was extended into nourishing body oil.
Market growth continued to slow in emerging countries, particularly in Asia, as macro-economic pressures weighed on consumer spending in Unilever’s categories. Developed markets remained weak with little sign of any recovery in North America or Europe.
Unilever performance: We delivered another quarter of growth ahead of markets. Emerging markets grew 6.6% with price up 4.4% and volume growth of 2.1%. Developed markets grew by 0.3% in the second quarter, with positive volume growth partially offset by declining price. All categories grew with good performances from Home Care, Personal Care and Refreshment.
Gross margin for the half year increased to 41.5% at constant exchange rates primarily due to Unilever’s focus on higher margin products and continued discipline around savings programs, which more than offset higher commodity costs in local currencies in emerging markets.