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How we’re driving growth through our five strategic choices

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Our financial results for the first half of this year – which delivered consistency in challenging conditions – show how we’re continuing to realise the benefits of the strategic choices we’ve made in the Unilever Compass.

Line-up of Unilever’s 13 billion-euro brands.

It’s clear from our second quarter and first half-year results – which we announced on 26 July – that our strategic choices are paying off. Here’s how we’re making progress against each one.

Win with our brands as a force for good

This is about growing our brands by delivering functionally superior products, as well as taking action on social and environmental issues that our consumers care about: improving the health of the planet, improving people’s health and wellbeing, and contributing to a fairer, more socially inclusive world.

Our big brands are in good health, with the 13 brands in our €1 billion+ club growing in aggregate at 10% in Q2, underpinned by bigger, better innovation, a relentless focus on functional product superiority, and continued brand investment. Our €1 billion+ brands now make up over 50% of our turnover.

Rexona, Omo, Magnum and Hellmann’s – also four of our most purposeful brands – were among those which posted the strongest growth. Our challenge now is to commercialise the incredible work we are doing on sustainability even more extensively across our brands.

Develop our portfolio into high-growth spaces

We’re successfully evolving our portfolio into higher-growth spaces, with double-digit growth in H1 from both our Prestige Beauty and Health & Wellbeing businesses.

Prestige Beauty delivered second quarter growth of 14%, helped by the launch of Tatcha in the UK, the return of consumers to offline channels and the expansion of some of our Prestige brands in China.

Health & Wellbeing delivered 28% growth, with another particularly strong quarter for Liquid IV. We announced the acquisition of Nutrafol, the No.1 dermatologist-recommended hair growth brand in the US, underpinned by extremely robust clinical evidence. Sales are almost entirely online, with the largest proportion direct-to-consumer.

We also completed the disposal of ekaterra on 1 July for €4.5 billion – the culmination of a huge amount of work to establish the world’s largest pure play tea business.

Four jars of Nutrafol, the No.1 dermatologist-recommended hair growth brand in the US.

Accelerate our growth in US, India, China and key growth markets

We performed well in the US and India, growing at 8.7% and 19.5% respectively. Growth in the US continues to benefit from our portfolio changes, with Prestige Beauty and Health & Wellbeing both contributing strongly. Growth in India is driven by strong competitiveness and a portfolio that has been built with brands competing up and down the price tiers.

In China, our third priority market, our growth declined by 9.3% as a result of the country being in a strict Covid-19 lockdown. That said, our competitiveness remains strong and we began to see some easing of the restrictions in June.

In addition, we saw good performances from our other key growth markets like Vietnam, Turkey and Argentina. In Turkey, as consumers adapt to the reality of extremely high inflation, we’re adjusting our portfolio to offer the right product formats and pack sizes, and strengthen our position in the right channels. Not surprisingly, we see good growth, for example, in the discounter channel.

Vietnam tells a different story. The economy and consumer confidence are both relatively strong and we’re seeing a continued shift to multi-channel shopping and premium propositions such as Pond’s Age Miracle.

Lead in the channels of the future

Our focus on leading in the channels of the future saw our e-commerce business grow 25% in the first half of this year. In just over five years, e-commerce has grown from 2% of our turnover to 14%.

We continue to invest significant resources in channel expertise, technology and channel-specific innovation. For example, in recent months we launched Dove premium hair treatment masks and the Clear scalp care range, aimed to meet the needs of the younger male consumer, in China, and Lifebuoy bundles in the UK. All designed to achieve high transaction value.

Three packs of Paula’s Choice, a brand from Unilever’s Prestige Beauty portfolio.

Build a purpose-led, future-fit organisation and growth culture

Perhaps the most important progress this year has been the launch of our new Compass Organisation on 1 July. The objective is to make Unilever simpler, faster and more agile, more focused in our categories, and with greater empowerment and accountability.

It is a simple model with five Business Groups, a lean Corporate Centre, and a low-cost, technology-driven transactional backbone, Unilever Business Operations.

The new Business Groups are now in place and are fully responsible for their portfolios – from strategy to monthly performance – and Unilever Business Operations is now responsible for all of our transactional processes which benefit from Unilever’s scale.

As our CEO Alan Jope says: “This major change to Unilever’s operating model is an important further step that will underpin the delivery of consistent growth, which remains our first priority.”


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