Unilever's global sales increased in the first half of the year, and the Chinese market declined by single digits

Recently, Unilever released its first half of 2024 results, showing that global sales increased by 2.6%, driving turnover to increase by 2.3% to 31.1 billion euros in the first half of 2024, and net profit increased by 3.5% to 4 billion euros. However, sales in the Chinese market fell by a mid-single digit in the first half of 2024. Among them, the decline in China's ice cream business became an important reason for the 1% decline in sales of Unilever's global ice cream business.

Unilever CEO Statement Schumacher said, "We are focused on driving high-quality sales growth and gross profit margin expansion. Driven by three consecutive quarters of sales growth, underlying sales increased by 4.1%, while prices continued to increase moderately. Unilever will continue to implement the Growth Action Plan, do less, do better, and have a greater impact. The implementation of the comprehensive productivity plan and the separation of the ice cream business are key to achieving this commitment."

The report shows that Unilever's sales increased by 4.1% in the first half of the year, with sales increasing by 2.6% and prices increasing by 1.6%. Four of Unilever's five business units achieved positive sales growth in the second quarter.

Among them, the potential sales of the beauty and health business increased by 7.1%, of which the sales volume increased by 5.5%, mainly due to the continued double-digit growth of the health and wellness luxury beauty business. In the second quarter, the strong growth of the health and wellness business offset the slowdown in the luxury beauty business due to the slowdown in the US beauty market.

Personal care business sales increased by 5.6%, an increase of 2.9% year-on-year, among which deodorant sales continued to grow strongly.

The potential sales of home care increased by 3.3%, and the 4.6% sales growth offset the price declines related to the tightening of commodity costs in some emerging markets.

Driven by prices in the first half of the year, the potential sales of nutritional products increased by 3.2%. In the second quarter, the sales volume of nutritional products rebounded from a decline of 0.4% in the first quarter to a positive growth of 0.4%.

The ice cream business, which has attracted much attention from both inside and outside the industry, increased sales by 0.6% and sales volume decreased by 1%, mainly affected by weak sales in China and the beginning of the weak summer in Europe.

Unilever said that the spin-off of the ice cream business is expected to be completed by the end of 2025. It is understood that the ice cream business accounts for 15% of Unilever's total business. In March 2024, Unilever said it would divest its ice cream division, including Ben & Jerry's and Magnum, to streamline its beauty and health, personal care, home care and nutrition businesses.

CNBC reported that Unilever was "disappointing" with the performance of its ice cream business.

For the full year of 2023, Unilever's ice cream business had a potential sales growth of 2.3%, of which 8.8% came from price, and sales volume fell by 6%.

In terms of regional markets, developed markets were mainly driven by price, with potential sales growth of 2.8%, including a 0.8% increase in sales and a 2% increase in prices. Emerging markets, which accounted for 59% of turnover, were mainly driven by sales, with sales growth of 5.1%, including a 3.8% increase in volume and a 1.3% increase in price.

Among them, except for food planning, all other categories of Unilever showed a weak performance, and sales in China fell by a mid-single digit.

However, Unilever still raised its full-year expectations for 2024. We continue to expect underlying sales growth (USG) to be in the multi-year range of 3% to 5% through 2024. Most of the growth is driven by volume. With continued investment, we expect full-year underlying operating margins to be at least 18%