Half Year 2024 Unilever PLC Earnings Call Transcript
Key Points
- Unilever PLC (UL) achieved underlying sales growth of 4.1% in the first half of 2024, with volume growth contributing significantly.
- Gross margin expanded by 420 basis points to 45.7%, driven by lower material costs and tight cost control.
- Underlying operating profit increased by 17.1% to EUR 6.1 billion, with an operating margin improvement of 250 basis points to 19.6%.
- The company increased brand and marketing investment by nearly EUR 700 million, focusing on innovation and power brands.
- Unilever PLC (UL) made progress in sustainability initiatives, including climate targets, regenerative agriculture, and reducing plastic waste.
- The ice cream business underperformed, particularly in China and Europe, due to market conditions and poor weather.
- Despite operational improvements, the ice cream segment still faces significant challenges and requires further action.
- The Prestige beauty segment experienced a slowdown, particularly in the US market.
- Emerging market currencies and moderate return of commodity inflation pose potential risks to future financial performance.
- The company faces ongoing challenges in Indonesia, exacerbated by geopolitical tensions affecting consumer sentiment.
Good morning, and welcome to Unilever's half-one results announcement. We expect prepared remarks today to take about 25 minutes, leaving around 30 minutes for Q&A. All of today's webcast is available live transcribed on the screen. And in a moment, I will hand over to Fernando to take you through the details of the results. I will then return to give a brief update on the growth and action plan and some of our key priorities as we move into the second half of the year. After that, we will take questions.
First off, let me set out some of the performance highlights from the first half as I see them. Our focus has been and remains on delivering high-quality sales growth and expanding gross margin and thereby enabling a step-up in investment behind our brands. With that in mind, we made progress over the first half. Our underlying sales grew 4.1%. Volume growth was broad-based and accelerated to 2.6% with four of five business groups delivering positive volumes in quarter two.
Growth was led by our power
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