€1.1 billion free cash flow and resilient margins underscore financial strength despite currency headwinds
LONDON: Unilever posted underlying sales growth of 3.4% for the first half of 2025, bolstering investor confidence for stronger full-year performance.
First half highlights:
- Underlying sales growth (USG) of 3.4%, with volume growth of 1.5% and price of 1.9%
- Turnover of €30.1 billion, down (3.2)%; with adverse currency (4.0)% and net disposals (2.5)%
- Strong gross margin of 45.7% fuelled increased brand & marketing investment up 40bps to 15.5%
- Underlying operating margin of 19.3%, down (30)bps against the strong prior year comparator
- Underlying EPS decreased (2.1)% to €1.59, diluted EPS decreased (3.7)%
- Free cash flow €1.1 billion, reflecting lower operating profit, Ice Cream separation costs and higher working capital
- Productivity programme ahead of plan, delivering a cumulative c.€650 million savings by end 2025
- Quarterly dividend up 3% vs Q2 2024; €1.5 billion share buyback completed
Despite external headwinds including adverse currency movements and net disposals, the consumer goods giant delivered volume-led growth, maintained robust margins, and completed the operational separation of its Ice Cream division, now on track for a November demerger.
Second-quarter growth accelerated to 3.8%, propelled by Power Brands which contributed over 75% of turnover. Gross margin held firm at 45.7%, enabling brand and marketing investment to climb 40bps to 15.5%. Productivity initiatives remain ahead of plan, with cumulative savings approaching €650 million.
Fernando Fernandez, Chief Executive Officer, credited “decisive interventions” in emerging markets and continued strength in developed economies, particularly in North America and Europe. The company anticipates margin recovery in H2 and reiterated expectations of 3–5% underlying sales growth for the full year.
“The marketing and sales machine we’re building will drive desire at scale, expand margins, and sustain volume growth across our Power Brands,” Fernandez said.
Segment Performance Beauty & Wellbeing and Personal Care drove gains, with Ice Cream rebounding 5.9%. Home Care showed resilience in Europe despite Latin American softness, while Foods recovered in Q2.
Regional Highlights Developed markets advanced 4.3%, their fourth consecutive quarter above 4%, while emerging markets grew 2.8%—India up 4%, China and Indonesia showing second-half promise.
The operational separation of the Ice Cream business is complete and competitive performance continues to improve.