Statement from Fernando Fernandez, CEO
“Our continued outperformance in developed markets and the positive impact of our decisive interventions in emerging markets, accelerated our growth in the second quarter to 3.8%, with positive volume growth across all business groups.
“This brought first half underlying sales growth to 3.4%, balanced across volume and price. A strong gross margin and productivity gains ahead of plan fuelled increased investment in our brands and premium innovations.
“Our first half performance positions us well for the full year. In the second half, we expect further acceleration in emerging markets, particularly in Asia, and sustained momentum in developed markets.
“We are on track to demerge Ice Cream by mid-November, with the operational separation now complete and competitive performance improving.
“Looking ahead, our priorities are clear: more Beauty & Wellbeing and Personal Care; disproportionate investment in the US and India; and, a sharper focus on premium segments and digital commerce. We are building a marketing and sales machine that drives desire at scale in our power brands and ensures execution excellence across all channels to deliver consistent volume growth and gross margin expansion.”
Outlook
For full year 2025, we expect underlying sales growth to be within our range of 3% to 5%, with second half growth ahead of the first half despite subdued market conditions. This is supported by our continued strength in developed markets and improving performance in emerging markets, notably in India, Indonesia and China.
We anticipate an improvement in underlying operating margin for the full year, with second half margins of at least 18.5%, a significant improvement versus the second half of 2024.
The macroeconomic and currency environment is uncertain and we will be agile in adjusting our plans as necessary.
First half review: Unilever Group
Growth
Underlying sales growth in the first half was 3.4%, with 1.5% from volume and 1.9% from price. Growth improved sequentially during the period to 3.8% in the second quarter, with volume of 1.8% and price of 2.0%. Power Brands contributed over 75% of turnover, growing 3.8% in the first half, with 1.6% from volume and 2.1% from price.
Beauty & Wellbeing grew underlying sales 3.7%, with 1.7% from volume and 2.0% from price, led by the continued strong performance of our Wellbeing business, which more than offset subdued growth in beauty. Personal Care grew 4.8%, with 1.4% from volume and 3.3% from price, with Dove growing high-single digit. Home Care underlying sales increased 1.3%, with 1.1% from volume and 0.2% from price, led by strong momentum in Europe which was partially offset by a decline in Latin America.
Underlying sales growth in Foods was 2.2%, with 0.3% from volume and 1.9% from price, with improved growth in the second quarter. Ice Cream grew 5.9%, with 3.8% from volume and 2.0% from price, as we continue to enhance the fundamentals of the business, with improved execution and impactful innovations.
Developed markets (44% of group turnover) continued to perform well, with underlying sales growth of 4.3%, with 3.4% from volume and 0.9% from price. The second quarter was the fourth consecutive quarter of USG above 4% in developed markets. Volume growth was broad-based, with a strong performance in North America driven by Personal Care and Wellbeing, and volume growth in Europe led by Home Care.
Emerging markets (56% of group turnover) grew underlying sales 2.8%, with 0.2% from volume and 2.6% from price. India underlying sales grew 4% on a consolidated basis[a], with underlying sales growth of 5% in the second quarter as market conditions gradually improved while we continued to gain market share.
China declined low-single digit and Indonesia declined -4.8% in the first half. However, we saw sequential improvement in the second quarter and we expect both countries to accelerate further in the second half. Latin America grew 0.5% with an acceleration of currency related price increases impacting volumes. Argentina growth was offset by Brazil and Mexico, as economic conditions continued to deteriorate in the first half.
Turnover was €30.1 billion, down -3.2% versus the prior year, including -4.0% from currency and -2.5% from disposals net of acquisitions. The currency impact during the first half was primarily driven by Latin American currencies and the Turkish Lira depreciating against the Euro. In the second quarter, the depreciation of the US dollar against the Euro led to elevated currency impact versus the first quarter.
Profitability
Underlying operating profit was €5.8 billion, a reduction of -4.8% versus the prior year. Underlying operating margin of 19.3% was -30bps against the strong prior year comparator.
We delivered a gross margin of 45.7%, which was flat compared to a strong performance in the first half of 2024 and sequentially up versus where we closed 2024. This reflects continued efforts to drive structural gross margin improvements and benefitted from higher than expected net productivity and procurement savings in the first half.
Brand and marketing investment was up 40bps to 15.5% of turnover, as we continue to invest competitively behind our brands and innovations. Overheads improved by 10bps, as productivity and tighter cost control more than offset inflation and costs associated with setting up and running Ice Cream as a standalone business.
Operating profit was €5.3 billion, down -10.6% versus 2024, reflecting higher acquisition and disposal costs and lower profit on disposals.
Ice Cream demerger
Ice Cream began operating on a standalone basis on 1st July. We are on track to complete the demerger in mid-November 2025. This will transform Unilever into a more focused organisation and create a world-leading Ice Cream business, The Magnum Ice Cream Company.
The Magnum Ice Cream Company (TMICC) will be led by Peter ter Kulve as CEO and Abhijit Bhattacharya as CFO. Jean-François van Boxmeer, TMICC's Chair Designate, is in the process of appointing Non-executive Directors of the Board of TMICC, to be announced during Q3.
TMICC will hold a Capital Markets Day in London on 9th September where it will set out its business strategy and investment case. In association with the demerger, Unilever will publish a Shareholder Circular in October which will set out formal information on the demerger. Prospectuses will be published around one week before the demerger and listing date, which we expect in mid-November. The Ice Cream Business Group will be reported on by Unilever as a discontinued operation from the fourth quarter.
Upon demerger, Unilever will retain a <20% stake in TMICC, subject to regulatory approvals, for a period of up to five years. Over time, the retained stake will be sold down in an orderly and considered manner to pay separation costs and maintain capital flexibility through a reduction in net debt. The retained stake demonstrates our support and belief in TMICC.
Subject to shareholder approval, Unilever intends to consolidate its share capital following completion of the demerger. This share consolidation, which will reduce the total number of shares in issue, is designed to maintain comparability between Unilever's share price, earnings per share and dividends per share before and after the demerger.
Productivity programme
Our productivity programme, launched in 2024 to simplify the business and further evolve our category-focused business model, remains ahead of plan in its delivery of €800 million of savings. We expect to realise around €650 million of savings by the end of 2025. The remaining €150 million of savings will be delivered in 2026.
Capital allocation
We continue to undertake targeted acquisitions to enhance focus and growth opportunities in selected areas.
In January, Hindustan Unilever Limited announced it has signed an agreement to acquire the premium actives-led beauty brand Minimalist, as it continues to evolve its Beauty & Wellbeing portfolio towards higher growth and demand spaces in India. The acquisition was completed in April.
In March, Unilever announced it has agreed the sale of The Vegetarian Butcher, a non-strategic asset, given its limited scalability.
Enhancing our Personal Care portfolio in premium and high growth spaces, Unilever acquired Wild in April and announced that it has signed an agreement to acquire Dr. Squatch in June.
The quarterly interim dividend for the second quarter is €0.4528, in line with the Q1 2025 dividend and up 3.0% versus Q2 2024. The €1.5 billion share buyback programme, announced and commenced in February, was completed at the end of May.
Business Groups
Beauty & Wellbeing (21% of Group turnover)
In Beauty & Wellbeing, we focus on three key priorities: premiumising our core Hair and Skin Care portfolios by emphasising brand superiority; fuelling the growth of our Prestige Beauty & Wellbeing portfolios with selective international expansion; and, continuing to strengthen our competitiveness through innovation and a social-first approach to consumer engagement.
Beauty & Wellbeing underlying sales grew 3.7% with 1.7% from volume and 2.0% from price. Growth was led by continued momentum in Wellbeing, which was partially offset by subdued growth in beauty.
Hair Care was flat, with low-single digit price offset by a decline in volume. Dove grew mid-single digit, supported by a significant relaunch featuring fibre repair technology and refreshed packaging. Growth was offset by a decline in Clear, which was impacted by slow market growth in China, and a volume decline in TRESemmé.
Core Skin Care delivered low-single digit growth, with performance varying across brands and markets. Vaseline and Dove grew double-digit supported by innovation and strong execution. Growth was partially offset by declines in China and Indonesia, where we are resetting our business.
Wellbeing delivered strong double-digit growth for the 21st consecutive quarter. Performance was led by Liquid I.V. and Nutrafol, as both brands continued to expand household penetration and deliver successful multi-year innovations, including Liquid I.V.’s sugar free platform.
Prestige Beauty was flat as the prestige beauty market remained subdued. Hourglass, Tatcha, and K18 continued to grow double-digit while Paula’s Choice and Dermalogica declined.
Underlying operating profit was €1.3 billion, down -3.7% versus the prior year. Underlying operating margin decreased -60bps as we increased brand and marketing investment behind key innovations and market development while gross margin remained flat to last year.
Personal Care (22% of Group turnover)
In Personal Care, we focus on winning with science-led brands that deliver unmissable superiority to our consumers across Deodorants, Skin Cleansing, and Oral Care. Our priorities include developing superior technology and multiyear innovation platforms, leveraging partnerships with our customers, and expanding into premium areas and digital channels.
Personal Care underlying sales grew 4.8%, with 1.4% from volume and 3.3% from price. Performance was led by Dove which grew high-single digit with strong volume and positive price. Second quarter volumes were impacted by a decline in Latin America where significant share gains were offset by subdued markets.
Deodorants grew low-single digit with positive volume and price. Volume growth in North America and Europe was offset by a decline in Latin America. Dove grew double-digit with high-single digit volume, supported by the launch of whole-body deodorants.
Skin Cleansing grew low-single digit, led by price. Dove grew mid-single digit, driven by continued success of its multi-year innovations, including its premium serum shower collection. Lifebuoy declined as volumes were impacted by commodity-driven price increases.
Oral Care grew mid-single digit led by mid-single digit growth in Pepsodent and CloseUp.
Underlying operating profit was €1.4 billion, down -9.8% versus the prior year. This included the impact from disposals such as Elida Beauty, which reduced Personal Care turnover by -5.8% in the first half. Underlying operating margin decreased -90bps as a slight improvement in gross margin was offset by a strong step-up in brand investment, particularly in the US and premium segments.
Home Care (20% of Group turnover)
In Home Care, we focus on delivering for consumers who want superior products that are sustainable and great value. We drive growth through unmissable superiority in our biggest brands, in our key markets and across channels. We have a resilient business that spans price points and grows the market by premiumising and trading consumers up to additional benefits.
Home Care underlying sales grew 1.3%, with 1.1% from volume and 0.2% from price. Growth improved in the second quarter, supported by continued good growth in Europe and a sequential improvement in key markets in Asia. This improvement was partially offset by a decline in Latin America.
Fabric Cleaning declined low-single digit, with slight decreases in both volume and price. Performance was impacted by challenging market conditions in Brazil, Home Care’s second-largest market, as volumes declined due to headwinds from recent price increases and some destocking. Wonder Wash continued to perform well, having now launched in 22 markets.
Home & Hygiene grew mid-single digit, with strong performances from Cif and Domestos. Cif was supported by the launch of its Infinite Clean range in key European markets. Infinite Clean is a multi-purpose reloadable cleaner powered by probiotics that break down dirt for up to three days.
Fabric Enhancers grew high-single digit, led by volume, as Comfort continued to perform well.
Underlying operating profit was €0.9 billion, down -11.2% versus the prior year. Underlying operating margin decreased -80bps due to a decline in gross margin as we lapped a particularly strong prior year comparator which benefitted from carryover pricing and easing commodity costs.
Foods (22% of Group turnover)
In Foods, our strategy is to deliver consistent, competitive growth by offering unmissably superior products through our biggest brands. We do this by reaching more consumers and focusing on top dishes and high consumption seasons to satisfy consumers’ preferences on taste, health and sustainability; while delivering productivity and resilience in our supply chain.
Foods underlying sales grew 2.2%, with 0.3% from volume and 1.9% from price. Growth improved in the second quarter, led by continued momentum in Hellmann’s and volume gains in Unilever Food Solutions.
Cooking Aids grew low-single digit, driven by price with flat volume. Volume turned positive in the second quarter, led by Knorr, which represents the majority of Cooking Aids’ turnover.
Condiments delivered low-single digit growth, driven primarily by Hellmann’s, which grew mid-single digit with positive volume and price. Flavoured mayonnaise remained a key growth driver, with strong performances from several new variant launches and continued global expansion, now in over 30 markets.
Unilever Food Solutions was flat with positive volume offset by negative price. Performance was supported by good growth in North America, which was offset by a decline in China. China was flat in the second quarter following a mid-single digit decline in the first quarter, which lapped a particularly strong 2024 that benefitted from a later Chinese New Year.
Underlying operating profit was €1.5 billion, up 2.8% versus the prior year. Underlying operating margin increased 100bps, with improved productivity supporting improvements in gross margin and overheads.
Ice Cream (15% of Group turnover)
In Ice Cream, we are focused on continuing to strengthen the business in preparation for Ice Cream’s demerger by mid-November 2025. We are doing this by developing an exciting product pipeline, designing more efficient go-to-market strategies, optimising our supply chain, and building a dedicated sales team globally. The separation will create a world-leading business, operating in a highly attractive category with five of the top ten selling global ice cream brands.
Ice Cream underlying sales grew 5.9%, with 3.8% from volume and 2.0% from price, as strong innovations and improved execution continue to enhance the fundamentals of the business.
In-home and Out-of-home Ice Cream both grew mid-single digit, with positive volume and price. Magnum led performance with double-digit growth, supported by the successful launch of its Utopia range and continued momentum of its Bon Bons range. Cornetto grew high-single digit, benefiting from the launch of Disc cones and its relaunch in H2 2024 with enhanced formulation and new packaging.
Underlying operating profit was €0.7 billion, down -2.2% versus the prior year. Underlying operating margin was down -40bps due to a gross margin decline. Operational improvements and pricing offset most of the significant cost inflation of key commodities, particularly cocoa.
As of 1 July, the Ice Cream Business Group transitioned into a standalone operating company within Unilever: The Magnum Ice Cream Company. We remain on track to demerge and separately list the business by mid-November 2025.