Unilever second quarter revenues freeze as ice cream sales falter

Unilever’s second-quarter results were tempered by poor spring weather in Europe and North America, with faltering ice cream sales leading to stagnant revenue growth in the quarter.

Unilever recorded net revenues of €13.7 billion for the quarter, a 0.1% decline when compared to the same period last year.

However, the owner of brands including Ben & Jerry’s, Magnum and Marmite claimed that its underlying sales rose 3.5% in the second quarter, but that was lower than the average forecast from analysts, who had predicted a 3.7% rise.

In Europe, wet weather dampened ice-cream sales following two years of unusually hot early summers, while growth in India slowed, which the company attributed to a late monsoon season and lower food inflation.

For the first half of the year, the company’s turnover decreased by 0.9%, as the company continues to be affected by overhead costs from the sale of its spreads business in 2017, though this was partially offset by a currency benefit of 1.1%.

In the company’s foods and refreshment division, underlying sales grew 1.3%, largely boosted by price increases.

Despite weaker performances in Europe, ice cream sales in Asia were boosted by new product releases such as Magnum white chocolate and cookies.

The performance of savoury products was also helped by the launch of new products, as snack pot variants met the increasing consumer preference for convenience foods.

Unilever registered strong growth in developing markets, with underlying sales growing 6.2% In Asia/AMET/RUB and 4.9% in Latin America, offsetting a 1.6% sales decline in developed markets.

Unilever reiterated that growth acceleration remains its core priority, and that it was still on target to achieve its 2020 growth target.

Unilever CEO Alan Jope said: “We have delivered consistent growth within our guided range for 2019, led by our emerging markets.

“Accelerating growth remains our top priority and we continue to evolve our portfolio and seek out fast growth channel and geographical opportunities, as well as address those performance hotspots where growth is falling short of our aspirations.

“For the full year, we continue to expect underlying sales growth to be in the lower half of our multi-year 3-5% range, an improvement in underlying operating margin that keeps us on track for the 2020 target and another year of strong free cash flow.

“Our sustainable business model and portfolio of purpose-led brands are key to delivering superior long-term financial performance.”