Unilever H1 profits up 3.3%, sees price growth moderating

Consumer goods giant Unilever delivered a 3.3% rise in interim earnings driven by higher prices and said it expected underlying price growth to moderate through the year.

Underlying operating profit at the maker of Dove soap and Ben and Jerry's ice-cream came in at €5.2bn as underlying sales grew 9.1% to €30.4bn.

“In a volatile and high-cost environment, we will deliver another year of strong underlying sales growth in 2023,” said chief executive Hein Schumacher.

“We expect underlying sales growth for the full year to be above 5%, ahead of our multi-year range, with underlying price growth continuing to moderate through the year.”

Sales in the personal care sector grew 10.8%, while beauty and wellbeing products were up 9.1%, home care 8.4%, nutrition 10.4%, and ice-cream 5.7%.

AJ Bell analyst Danni Hewson noted that group sales growth "has come entirely from putting up prices, not shifting more units of products".

"The sign of a good business is one that can grow prices and volumes. Unilever’s group volumes actually declined in both the first and second quarter periods," she said.

“Second, chief executive Hein Schumacher is still new in the role and it’s easy to get excited when a new leader delivers messages of optimism."

"He talks about bringing greater focus, sharper execution and a simplified operating model. We’ve heard all of this before and the proof of the pudding will be in the execution, not simply sweet-talking investors into thinking a new CEO automatically equates to greater success.”

Reporting by Frank Prenesti for Sharecast.com