Unilever's Q2 2025 Earnings: Key Contradictions on Volume Growth, Ice Cream Strategy, and Pricing Power

Volume growth expectations and strategy, Ice Cream demerger and strategy, pricing strategy and competitiveness, emerging markets volume growth outlook, and pricing strategy and volume impact are the key contradictions discussed in Unilever's latest 2025Q2 earnings call.



Sales and Market Performance:
- Unilever reported underlying sales growth of 3.4% for the first half of 2025, with 1.5% from volume and 1.9% from price.
- The growth was driven by strong performance in developed markets like North America with 5.4% sales growth and Europe with 3.4%, and an improved performance in emerging markets, particularly Asia Pacific Africa with 3.5% growth.

Emerging Markets Recovery:
- In the Asia Pacific Africa region, Unilever experienced sales growth in the second quarter, which strengthened to over 5%.
- The recovery was driven by operational interventions and improvements in key markets like India and Indonesia, with China also expected to accelerate in the second half.

Productivity and Cost Control:
- Unilever achieved gross margin improvement, maintaining a strong gross margin profile and directing 40 basis points increase in brand and marketing investment to over 15.5% of turnover.
- This was supported by significant productivity improvements, with cumulative savings of EUR 650 million expected by year-end, exceeding previous guidance by EUR 100 million.

Ice Cream Spin-off:
- The Ice Cream segment reported sales growth of 5.9% and is planned to operate as a stand-alone business from mid-November.
- The separation is part of a strategy to focus Unilever on higher-growth areas and is expected to result in a stronger gross margin and return on invested capital.