24th Jul 2014 07:35
LONDON (Alliance News) - Unilever PLC said Thursday that revenue in its first-half declined as sales and pretax profit rose, as the company continues to face a slowdown in emerging markets.
Unilever said revenue in its first-half decreased 5.5% to EUR24.1 billion from EUR25.5 billion last year. The company said its revenues also took an 8.5% currency hit. Pretax profit rose to EUR4.22 billion in the first-half, up from EUR3.66 billion last year.
"The first half again shows consistent top and bottom line progress despite significant headwinds. Our markets have been challenging and we have experienced a further slow-down in the emerging countries whilst developed markets are not yet picking up," said CEO Paul Polman.
Developed markets grew by 0.3% in the second quarter, said the company, with positive volume growth partially offset by declining price.
The FTSE 100-listed company said underlying sales rose 3.7%, with emerging markets sales rising 6.6%. Despite this rise, Unilever said market growth continued to slow in emerging countries, particularly in Asia, as macro-economic pressures weighed on consumer spending across its categories. Developed markets remained weak with little sign of any recovery in North America or Europe, it said.
Unilever reported a 13% rise in operating profit for the half-year, which it said reflects profits earned on disposals including the Ragu and Bertolli pasta sauces brands in the United States and the disposal of Slim.Fast announced earlier this month.
On a divisional basis, Personal Care revenue in the first-half came in at EUR8.6 billion, with growth in slowing markets attributed to a strong innovation programme and good perfoamnces by the Dove, Rexona and TRESemmé brands.
Revenue in the Foods business came in at EUR6.1 billion for the period; growth in the second quarter reflected the impact of the late Easter and improved market shares. However, the markets in North America and Europe remained challenging whilst emerging markets continued to grow in mid single digits, said FTSE 100-listed Unilever.
Refreshment revenues for the six months were EUR4.9 billion, supported by a strong programme of activities, including the 25th anniversary campaign by Magnum. The ice cream division fared well; Ben & Jerry's grew well, supported by innovations such as Cores and the introduction of a mini cup format in Japan whilst Cornetto responded well to re-launches in North Asia and Europe, said the company.
Laundry growth remained competitive and well-balanced between volume and price during the period, said Unilever, recording revenues in its Home Care business of EUR4.5 billion.
Unilever's CEO remains confident on the company's progress and potential, "In a tougher cost environment, project Half is on track and is enabling us to drive cost savings and simultaneously increase organisational agility," said Polman.
"We remain focused on achieving another year of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow," he added.
Shares in Unilever dropped at the open, trading 2.20% lower at 2,624 pence per share Thursday morning, one of the biggest decliners on the FTSE 100.
By Alice Attwood; [email protected]; @AliceAtAlliance
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