Unilever ups guidance after 8.1 per cent underlying sales rise beats forecasts

Unilever Plc (ULVR.L) raised its full-year sales guidance after beating forecasts with an 8.1 per cent increase in first-half underlying sales as the maker of Dove soap and Knorr stock cubes hiked prices to counter soaring costs.

Analysts had expected growth of 7.2 per cent, a company-provided consensus for the six months ended June 30 showed.

Unilever had previously forecast full-year underlying sales growth at the top end of a range of 4.5 per cent to 6.5 per cent. It said on Tuesday it now expects underlying sales growth to be above that range, driven by prices with some further pressure on volume.

Its half-year turnover rose 14.9 per cent to 29.6 billion euros ($30.25 billion).

One of the biggest consumer companies in the world, making everything from laundry detergent to ice cream, Unilever’s costs have surged since the start of the COVID-19 pandemic created global supply chain logjams.

War in Ukraine has since boosted energy costs and sent prices of raw materials such as wheat, sunflower oil and pulp used in packaging to record highs.

Its first-half operating profit margin fell to 17 per cent from 18.8 per cent a year earlier.

The company previously said it expected its full-year underlying operating margin to fall by between 140 and 240 basis points, or by 16 per cent to 17 per cent, with the bulk of the hit expected in the first half.

“Underlying sales growth of 8.1 per cent was driven by strong pricing to mitigate input cost inflation, which, as expected, had some impact on volume,” CEO Alan Jope said on Tuesday. “The challenges of inflation persist and the global macroeconomic outlook is uncertain, but we remain intensely focused on operational excellence and delivery in 2022.”