2012 First half year results
Today (26 July), Unilever released its results for the half year and second quarter 2012. Solid and consistent first half results provide further evidence that we are making progress in the transformation of Unilever to a sustainable growth company.
Turnover up 11.5% at €25.4 billion with a positive impact from foreign exchange of 1.9% and acquisitions net of disposals of 2.2%
First-half underlying sales growth 7.0% comprising volume growth of 2.8% and price growth of 4.1%. Second quarter underlying sales growth of 5.8%
Emerging markets underlying sales growth up 11.4% in the first half; up 11.0% in the second quarter
Core operating margin flat; increased advertising and promotions investment behind our brands
Core earnings per share up 6% at €0.76; free cash flow at €1.5 billion
The first-half results reflect a strong performance in markets that remain challenging. Consumer confidence remains fragile and the competitive environment intense. The value growth of our markets is driven largely by pricing and reflects the combination of strong growth in emerging markets and sluggish growth in the developed markets where volume growth continues to be negative. In this context, all of our Categories grew, driven by strong innovations and the roll-out of our brands into new markets.
Commenting on the results, CEO Paul Polman said: “Despite deteriorating global economic conditions and a competitive environment which remains intense, we again delivered volume growth ahead of our markets and gained value share across the majority of our business. Our performance reflects continued investment in innovation, brand-building and people, whilst keeping discipline on both costs and execution.”
Hair delivered strong double-digit growth driven by Dove, with the continuing success of Dove Damage Therapy, and Clear, benefiting from the continuing success of its relaunch as a premium scalp expert. The expansion of our brands into new markets is also contributing strongly, with the launch of Clear in the US, TRESemmé in Brazil, Dove Hair in the Philippines, and the introduction of Axe Hair in Europe.
Skin cleansing delivered strong growth ahead of our markets, with Dove, Lux and Lifebuoy all performing well. Dove benefited from the continuing success of Nutrium Moisture shower gels and the Dove Men+Care range, which was recently extended to Brazil. Dove bars were launched in Indonesia and Lifebuoy Clini-Care 10 has made an excellent start in India. In skin care, the launch of Simple in the US is making good progress and Vaseline maintained strong momentum, underpinned by the success of the Total Moisture range. Concern Kalina in Russia is performing well.
Deodorants growth reflected a good performance from Dove on the back of successful innovations and consistent advertising and a good performance from Axe Anarchy. Oral care growth was mid-single digit, reflecting in-market activities which are weighted to the second half. In the second quarter our new Expert Protection range was launched under the Signal brand in France and under the Pepsodent brand in India.
Savoury growth was underpinned by strong performances in Knorr cooking products and soups. Knorr jelly bouillon continued to grow as we supported the latest innovation, gravy, and through successful market development programmes such as the “Steak Challenge” initiative in Latin America. Knorr baking bags also delivered good growth and are now available in 40 countries. Our Food Solutions business, which serves professional chefs, is helping drive savoury growth by working with our customers to create healthy menus and through the “wise up on waste” initiatives, working with chefs to reduce energy consumption and food wastage.
In spreads we have increased prices to keep pace with significant commodity cost inflation and this impacted volumes in the second quarter. We delivered positive growth in the first half and we continued to innovate with the successful Latta aerated product now launched in the Netherlands. Liquid margarines continued to do well in Europe. Dressings delivered another quarter of growth, reflecting a strong performance by Hellmann’s in Latin America driven by the ‘Inspire’ campaign to encourage new uses of mayonnaise.
Laundry grew ahead of our markets, reflecting the success of our innovations and the actions taken to improve the product performance. Omo has been reformulated to deliver faster stain removal and is already available in nine countries. Comfort Anti-Bacterial has been launched in Indonesia and Vietnam.
Household care growth reflected the strong performance of Sunlight hand dishwasher. Sunlight was relaunched with an improved degreasing formulation in Vietnam, Indonesia and Malaysia. Domestos was launched in the Gulf, including Saudi Arabia. Cif was launched in Mexico and was extended to affordable pouches in Indonesia.
Ice cream performed well in the quarter despite the adverse weather conditions in northern Europe and the high prior year comparator. This reflects good progress in expanding our global footprint. Magnum delivered high single-digit growth, building on the successful launch in the US with the introduction of Magnum Minis, and with the recent launch of Magnum in the Philippines and Thailand. Cornetto also grew strongly on the back of the Angels & Devils innovation and a successful digital campaign in China. Ben & Jerry’s opened its first premium ice cream shop in Japan.
Beverages saw a strong performance in Africa and the Middle East, improved performance in Russia driven by the Lipton relaunch and a good initial response to the launch of Lipton Tea & Honey powdered ready-to-drink tea sachets in the US.
Go to Investor relations to read the full first-half 2012 results announcement. Find out more on Unilever in the About and The Latest from our brands sections of this website.