Unilever reports return to sales growth

Consumer goods giant Unilever today reaped the benefits of price-cutting and new products as it grew sales volumes for the first time since last year.

The return to volume growth – up 2% between April and June – was far better than expected and helped by demand for ice cream such Ben & Jerry’s in the hot weather despite “very challenging” European markets.

Unilever – behind a host of brands including Dove soap, Flora spread and Domestos detergent – said underlying sales were up 4.1% in the second quarter.

Chief executive Paul Polman said the group had been helped by higher marketing spend, lower commodity costs – which enabled it to cut prices – and the launch of new products such as Cif cleaner in India.

During the first half as whole, Unilever recovered from a tough beginning to the year to edge up sales volumes by 0.2%. Shares in Unilever rose 5%.

“While conditions remain difficult in many markets, I am encouraged by the return to volume growth across all regions and the majority of countries and categories,” Mr Polman added.

Unilever said consumers were "looking more than ever for good value'' and bolstered this with heavy promotions and advertising spend across its household brands, where underlying sales were up 9.9% in the first half.

Personal care products – which included a new Axe body spray, Dove shower gel, and a Signal mouthwash line – were up 4.6%.

The firm’s best performance came in its fast-growing Africa and Asia region - where it has continued to invest in its Russian and Chinese business. Volumes were up 1.3% during the first half.

Underlying profits across the group as a whole were 3% lower at €2.55bn, with turnover flat at €19.96bn.