Over the first six months of 2017, Unilever’s profit and turnover grew substantially, mainly thanks to price increases and a positive evolution in the care and ice cream divisions.
Long-term strategy
The group’s turnover grew 5.5 % to 27.7 billion euro and net profit shot up 22.4 % to 3.3 billion euro, much better than the market averages. However, its growth comes on the back of price increases, not because of increased volumes. Its faster pace of innovation did help it create more value.
According to CEO Paul Polman, these results prove its long-term strategy is working. Its Connected 4 Growth strategy has made the group more agile and less complex, so that it can now meet altered consumer trends much faster. Polman forecasts even faster growth in the second half of the year.
Margarines lag behind
Unilever performed well in just about every category: Signal and Dove did very well in the care division; Latin America and Asia contributed the most growth in the household product division; Knorr and Hellmann’s are top of the class in the food division and Ben & Jerry’s and Magnum led the pack in the ice cream division.
The margarine division is the odd one out and is not even profitable, which is also why the board decided to sell it following Kraft Heinz’ failed take-over bid. The autonomous turnover growth would have reached 3.4 % (instead of 3 %) without the margarine division. It still remains to be seen whether investors will be satisfied once the division has been sold, because analysts expect Kraft Heinz to launch a hostile take-over bid soon.
