23rd Jul 2015 09:19
LONDON (Alliance News) - Unilever PLC Thursday reported a drop in profit in the first half of 2015, although revenue grew in each of its Personal Care, Foods, Refreshment and Home Care divisions and underlying sales growth beat analyst forecasts, making it the highest performer in the FTSE 100 on Thursday morning.
Shares in Unilever were trading up 2.4% at 2,926.75 pence Thursday morning.
The FTSE 100-listed maker of consumer products including Ben & Jerry's ice cream, Lipton tea, Vaseline and Dove beauty products, and Persil washing power, reported a 14% drop in pretax profit to EUR3.6 billion from EUR4.2 billion in the first half, although revenue grew 12% to EUR27 billion from EUR24.1 billion.
Both were at reported currencies. At constant currencies, revenue grew 1.8% and pretax profit fell 21%.
On an underlying basis, which strips out the impact of currency movements and any acquisitions or disposals, sales grew 2.9% which according to Shore Capital was slightly ahead of the 2.7% consensus, while second quarter underlying sales growth, also of 2.9%, beat consensus of 2.6% growth.
"We remain consistent in our view that Unilever will be winner in global [fast-moving consumer goods], with its leading emerging market exposure expected to lead to superior top-line growth in the medium term, supported by the potential for sustained core EBIT margin expansion from initiatives such as ?maxing the mix?, ?project half?, its low-cost business models and the ongoing focus on Home Care and Ice Cream margins, all underpinned by consistent cash flows and strong balance sheet which support corporate ambitions," Shore analyst Darren Shirley said in a note.
By division, growth in the Personal Care part of the business was driven by volume and price, Unilever said, adding that it expects a further acceleration in growth in the second half of the year. Growth in Home Care was led by innovations in higher margin segments like machine specialist detergents and fabric conditioners, it said.
Meanwhile, the Refreshment division "grew solidly in value despite volumes being slightly down against a strong prior year performance," Unilever said, while growth in the Foods business was helped by the success of cooking products in emerging markets and soups in Europe.
Unilever will pay a quarterly dividend for the second quarter of EUR0.302 per share, up from the EUR0.285 paid in the second quarter of the prior year.
"The sharpened strategies across each of our four categories and a step-up in our innovation pipeline are increasingly driving our growth and margin expansion in a continued challenging environment. Equally, on the cost side we continue to exceed the objectives set with project Half, enabling us to strengthen the investment behind our brands and to extend into premium segments and new markets," Chief Executive Paul Polman said in a statement.
"We plan for another year of volume growth ahead of our markets, steady improvement in core operating margin and strong cash flow," he added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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