Unilever Q2 2025 Earnings Call Highlights Solid Performance with 3.4% Underlying Sales Growth and 1.3% Volume Growth

Unilever reported a 3.4% underlying sales growth for H1 2025, driven by a good balance of volume and price. Volumes improved sequentially despite subdued markets, with first-half market volume growth at around 1.3%. The company highlighted five key elements of its solid performance and expressed confidence in delivering in the full year.

Unilever PLC (NYSE:UL) has reported a robust first half of 2025, with underlying sales growth of 3.4%, driven by a balanced approach of volume and price. Despite subdued market conditions, the company achieved first-half market volume growth of around 1.3%, indicating resilience and strategic positioning.

Fernando Fernandez, Unilever’s acting Chief Financial Officer, highlighted five key elements contributing to the company’s solid performance. These include:

1. Balanced Growth: Unilever delivered underlying sales growth for the half with a good balance of volume and price. Volumes improved sequentially despite market challenges, with broad-based positive volume growth across all business groups.

2. Structural Gross Margin Strengthening: The company continued to enhance its gross margin, which allowed for increased support of its brands. Brand marketing investment was highly competitive, at 15.5% of turnover.

3. Market Performance: Unilever outperformed markets in developed economies, with North America and Europe showing strong growth. North America’s underlying sales grew 5.4%, while Europe’s growth was 3.4%.

4. Improving Emerging Markets: The company saw a steadily improving picture in emerging markets, particularly in Asia Pacific Africa, which accelerated to over 5% growth in the second quarter. India and China showed sequential improvements, and Indonesia is expected to accelerate further.

5. Ice Cream Business: The ice cream business performed well, both competitively and in preparation for a future demerger.

Srinivas Phatak, Unilever’s acting CFO, provided detailed insights into the company’s performance. He noted that underlying sales growth in the second quarter was 3.8%, with balanced volume and price growth. All business groups delivered positive volume growth on a 2-year CAGR basis, and Power Brands contributed over 75% of the group turnover, growing 3.8% in the first half.

Geographically, developed markets accounted for 44% of group turnover and delivered a first half USG of 4.3%. North America’s underlying sales grew 5.4%, driven by 3.7% volume growth. Europe grew 3.4%, with broad-based share gains across top markets. Asia Pacific Africa, representing 43% of turnover, delivered 3.5% growth, with India showing strong performance and Indonesia and China expected to accelerate further.

Latin America, representing 13% of turnover, grew 0.5% despite a 4.6% decline in volume, reflecting pricing actions to offset currency movements. The company remains confident in the strength of its portfolio and operations in the region, expecting recovery later in the year.

Unilever’s Beauty & Wellbeing business grew 3.7%, with strong momentum in the Wellbeing segment. Power Brands like Liquid IV and Nutrafol continued to perform exceptionally. Personal Care delivered 4.8% growth, with Dove and Deodorants leading the way.

Overall, Unilever’s first half results provide a solid foundation for confidence in the second half of the year and beyond. The company’s strategic focus on balanced growth, market performance, and emerging markets underscores its resilience and future prospects.

References:
[1] https://www.insidermonkey.com/blog/unilever-plc-nyseul-q2-2025-earnings-call-transcript-1581896/