Unilever reported that Knorr jelly bouillon continued to grow, supported by innovation in the gravy sector and through successful market development programmes.
Good growth was also reported for Knorr baking bags, which are now available in 40 countries.
Unilever’s Food Solutions business, which serves professional chefs, is helping drive savoury growth by working with customers to create healthier menus and through its ‘wise up on waste’ initiatives, working with chefs to reduce energy consumption and food wastage.
Turnover grows to €25.4bn
Unilever announced that across the group turnover was up 11.5% at €25.4bn for the first half of 2012 with a positive impact from foreign exchange of 1.9% and acquisitions net of disposals of 2.2%. It reported first half underlying sales growth of 7%, comprising volume growth of 2.8% and price growth of 4.1%. Second quarter underlying sales growth was 5.8%. Net profit was up 1% at €2.4bn.
Emerging markets witnessed underlying sales growth up 11.4% in the first half – up 11% in the second quarter. However, its core operating margin was flat, reflecting increased advertising spending and promotions investment behind its brands. It reported core earnings per share up 6% at €0.76, with free cash flow at €1.5bn.
"Solid and consistent first half results provide further evidence that we are making progress in the transformation of Unilever to a sustainable growth company,” said chief executive Paul Polman, commenting on the results.
“Despite deteriorating global economic conditions and a competitive environment which remains intense, we again delivered volume growth ahead of our markets and gained value share across the majority of our business. Our performance reflects continued investment in innovation, brand-building and people, whilst keeping discipline on both costs and execution.”
Looking forward, Polman said Unilever expected continued volatility, especially in commodity costs and economic conditions.
“We remain focused on profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow, driven by increased capital discipline,” he added. “For 2012 we remain on track to deliver a modest improvement in core operating margin."
Price increases for spreads
In spreads the muliinational giant has increased prices to keep pace with significant commodity cost inflation and this impacted its volumes in the second quarter.
Unilever delivered positive growth in the first half and continued to innovate with developments such as its Latta aerated product now launched in the Netherlands. Liquid margarines continued to do well in Europe, said the company. Dressings delivered another quarter of growth, reflecting a strong performance by Hellmann’s in Latin America driven by the ’Inspire’ campaign to encourage new uses of mayonnaise.
Ice cream performed well
Ice cream performed well in the last quarter despite the adverse weather conditions in northern Europe and the high prior year comparator.
Unilever attributed this to progress in expanding its global footprint.
Magnum delivered high single-digit growth, building on the successful launch in the US with the introduction of Magnum Minis, and with the recent launch of Magnum in the Philippines and Thailand. Cornetto also grew strongly on the back of the Angels & Devils innovation and a successful digital campaign in China. Ben & Jerry’s opened its first premium ice cream shop in Japan.
Beverages saw a strong performance in Africa and the Middle East, improved performance in Russia driven by the Lipton re-launch and a good initial response to the launch of Lipton Tea & Honey powdered ready-to-drink tea sachets in the US.