Sales lower-than-expected at Unilever as Brazilian truck strike bites

Sales lower-than-expected at Unilever as Brazilian truck strike bites

Unilever has reported its results for the second quarter of the current financial year. Underlying sales growth (excluding spreads, which was officially divested on July 2) came in at 2.7 percent for the first half, around 60 bps lower than expected thanks to the truckers’ strikes in Brazil, according to the Anglo-Dutch FMCG giant. First half turnover fell 4.8 percent to €24.9 billion, a drop attributed to currency fluctuations.

Within the beauty and personal care segment, there was an improvement in volumes, however, despite growth being negatively affected by events in Brazil and ‘challenging competitive conditions’ in Europe and South East Asia’ in the second quarter. Skin care and the prestige business stood out, the latter demonstrating broad-based growth of more than 6 percent.

“Our first half results show solid volume-driven growth across all three divisions, which was achieved despite the effects of an extended truckers’ strike in Brazil, one of our biggest markets. Growth was driven by strong innovation and continued expansion in future growth markets. The margin improvement was of high quality and in line with our strategy, driven by further gross margin progression, increased investment behind our brands and strong savings delivery,” said Paul Polman, CEO.

“Our expectation for the full year is unchanged. We expect underlying sales growth in the 3 percent – 5 percent range, an improvement in underlying operating margin and strong cash flow. We remain on track for our 2020 goals.”

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