Unilever's underlying growth undimmed in first half despite 'tougher market'

Group sales decreased by 2.6% at current exchange rates to €26.3bn but increased by 5.4% at constant exchange rates, as consumer demand remained weak and in the markets in which we operate volumes have slowed further, with market volume growth low in emerging markets and negative in Europe and in North America.

While emerging markets grew 8.0%, driven by good volume growth in Asia and price growth in Latin America, developed markets were almost flat as volume growth just about offset price deflation in Europe.

With gross and core operating margins improving thanks to innovation, acquisitions and cost savings programmes, net profit was lifted 2.0% to €2.7bn and core earnings per share 1.3% to €0.92 at current exchange rates or 7.5% at constant rates.

Directors declared a quarterly dividend, payable in September, of €0.3201 per share.

"Our first half results further demonstrate the progress we have made in the transformation of Unilever to deliver consistent, competitive, profitable and responsible growth," chief executive Paul Polman.

"Despite a challenging environment with slower global economic growth and intensifying geopolitical instability, we have again grown profitably in our markets, competitively and driven by strong innovations."

But he cautioned that the board "do not see any sign of an improving global economy" and so continue to drive agility and discipline on costs.

"Our priorities continue to be volume-driven growth ahead of our markets, steady improvement in core operating margin and strong cash flow."