Unilever share price jumps after sales beat expectations again

 
Joe Hall
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Magnum is one of Unilever's largest-selling brands (Source: Getty)

Unilever's share price jumped this morning after proving its critics wrong as sales beat analyst expectations.

The figures

Consumer goods giant Unilever once again beat revenue forecasts in the second quarter, with total turnover rising by 2.9 per cent to €14.2bn (£9.93bn).

The better than expected results triggered a 2.8 per cent share price rise in early trading.

In the first half of the year, broad sales growth across Unilever's four main categories rose now stands at €27bn, with the biggest jump coming in its home care business where sales rose 4.5 per cent to €5.2bn.

Yet it is still personal care brands - in the division previously headed up by Tesco chief executive Dave Lewis - that are driving much of Unilever's growth. Names such as Dove and Tresemme helped the division retain its key position, with turnover of €5.1bn in the first six months.

Operating profit actually dropped 13 per cent from €4.4bn to €3.8bn, reflecting profits made on disposals of brands such as Bertolli in 2014.

But earnings per share were up 16 per cent to €0.98.

Read more: Weak euro helps Unilever deliver better-than-expected sales growth

Why it's interesting

This was was supposed to be a difficult year for Unilever, which shareholders complained had lost momentum, but once again emerging markets delivered big despite their subdued wider economies.

Turnover in emerging markets rose six per cent to €8.2bn in the second quarter. In contrast, it dropped 1.8 per cent to €6bn to developed markets.

Personal care brands such as Dove and TRESemme are cementing customer loyalty around the world - most recently in Asia - helping the company shrug off challenging conditions.

What Unilever said:

Chief executive Paul Polman said: "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. During the past six months we have also made major progress in the establishment of our Prestige Personal Care business with the announced acquisitions of Dermalogica, Murad, Kate Somerville and Ren."

In short:

Unilever once again exceeds expectations for the second successive quarter, prompting the company to plan for another year of growth.

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