Unilever has announced a drop in profit amid expensive disposals and unfavourable currency moves.
Turnover at the FTSE100 firm, which owns brands like Dove, Colman’s and Persil, was €30.1bn, down 3.2 per cent year on year.
Sales rose 3.4 per cent in the first half of the year, helped by a strong performance in Unilever’s ice cream arm, which the consumer goods giant has spun off and will list later this year as part of its simplification plan.
The standalone, listed firm will called The Magnum Ice Cream Company (TMICC), which will house brands like Magnum and Ben & Jerry’s. Unilever will retain a 20 per cent stake in TMICC for up to five years.
Turnover in the ice cream arm, which accounts for 15 per cent of sales, grew 5.9 per cent to €4.6bn, although underlying operating profit dropped 2.2 per cent.
Led by Peter ter Kulve as CEO, the company will have a triple listing, with Amsterdam as the primary listing location and London and New York as secondary listings.
The restructuring costs associated with the demerger have been estimated at around €850m.
Food, home care, personal care and beauty sales – which each account for around 20 per cent of turnover – grew 2.2 per cent, 1.3 per cent, 4.8 per cent and 3.7 per cent, respectively.
Underlying operating profit fell in every segment except food, with underlying earnings per share down 2.1 per cent to €1.59.
Unilever focuses on productivity savings
Unilever said its productivity plan “remains ahead”. The company plans to deliver €650m of savings by the end of 2025 and €150m of savings in 2026.
Previous boss Hein Schumacher’s growth plan was born in a challenging period in which the giant faced lower returns as shoppers tightened their belts amid the cost of living crisis.
Restructuring costs from the plan reached €239m in the first half of the year, a slight decrease from €248m in the prior year.
For the full year, Unilever expects restructuring costs of around 1.4 per cent of turnover.
Free cash flow in the first half of 2025 was €1.1bn, versus €2.2bn delivered in the first half of 2024, due to the cost of separating its ice cream arm and lower profit.
For 2025, Unilever expects underlying sales growth to be between three and five per cent, with second-half growth ahead of the first half despite subdued market conditions.
CEO Fernando Fernandez said: “Our first half performance positions us well for the full year. In the second half, we expect further acceleration in emerging markets, particularly in Asia, and sustained momentum in developed markets.
“We are on track to demerge Ice Cream by mid-November, with the operational separation now complete and competitive performance improving.
“Looking ahead, our priorities are clear: more Beauty & Wellbeing and Personal Care; disproportionate investment in the US and India; and, a sharper focus on premium segments and digital commerce.”