26th Jul 2022 10:42
(Alliance News) - Unilever PLC raised its sales guidance as part of the Dove soap maker's first earnings report since naming prominent shareholder Nelson Peltz to its board.
The London-based consumer goods firm on Tuesday posted a pretax profit of EUR4.36 billion for the first half of 2022, down 0.2% from EUR4.37 billion a year before, on revenue that grew 15% to EUR26.62 billion from EUR25.79 billion.
Operating profit was EUR4.5 billion, up 1.7% from EUR4.4 billion.
Underlying operating profit growth was 4.1%.
The operating profit margin was 15.2% in the first half, down by two percentage points from a year before, though the underlying operating profit margin was 17.0%.
Unilever cited a positive currency impact of 5.6% and a positive 0.6% impact from acquisitions net of disposals as reasons.
Further, Unilever said it generated underlying sales growth of 8.1% in the first half as the Ben & Jerry's ice cream maker raised prices to counter rising costs and slumping volumes.
Looking ahead, Unilever expects to surpass its underlying sales growth guidance for 2022 of 4.5% to 6.5%.
The company's full year underlying operating margin expectation remains at 16%, which is within its guided range of 16% to 17%.
AJ Bell's Russ Mould commented that "perhaps the Nelson Peltz effect is already at play" at Unilever.
Unilever appointed activist investor Peltz to its board in May, raising hopes among other shareholders for a shake-up at company. Peltz is chief executive officer and a founding partner of Trian Fund Management LP. Funds managed by Trian own 37.4 million Unilever shares, equal to a 1.5% stake.
Unilever's share price is down 3.0% been languishing since Chief Executive Officer Alan Jope took over in 2019.
Investors were also not amused after Jope's miscalculated attempt to try to acquire GSK's consumer health division late last year. This was spun off as Haleon PLC, for GBP50 billion, earlier this month.
"With Peltz on board, investors may have more confidence in a pretty bloated Unilever slimming down. This could streamline decision making and allow Unilever to be the best version of itself – and it certainly has some attributes which make it stand out including a strong footprint in emerging markets and decent returns on capital," Mould added.
Shares in Unilever were trading 2.0% higher at 3,994.00 pence each on Tuesday morning in London.
By Arvind Bhunjun; [email protected]
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