Consumer goods giant Unilever reported a jump in first-half underlying sales on Tuesday after raising prices to tackle higher costs, as it lifted its sales growth guidance for the year.
First-half underlying sales rose 8.1%, driven by strong pricing to mitigate input cost inflation, which had some impact on volume.
Unilever said growth was broad-based across all divisions. It said price has sequentially stepped up over the past two quarters, reaching 11.2% in the second quarter, which had some negative impact on volume, as expected.
This was more pronounced in Home Care, which was particularly exposed to rising input costs and took the highest pricing action, leading to underlying sales growth of 10.7%. Sales in Beauty & Personal Care grew 7.5%, driven by price and continued strong growth in Prestige Beauty and Health & Wellbeing, which is Unilever’s vitamins, minerals and supplements business. Foods & Refreshment sales grew 7.3%.
The company said it now expects underlying sales growth for 2022 to exceed the previous guidance range of 4.5% to 6.5%, “driven by price with some further pressure on volume”.
Meanwhile, the company’s full-year underlying operating margin expectation remains at 16%, within its guided range of 16% to 17%.
“The medium-term macroeconomic and cost inflation outlooks are uncertain and volatile, but delivering growth remains our first priority. Against this backdrop, we continue to expect to improve margin in 2023 and 2024, through pricing, mix and savings,” it said.
