Sizzling climate boosts gross sales at Unilever as demand for ice cream soars, however boss sounds the alarm over rising prices
Surging demand for ice lotions as temperatures rise and lockdown restrictions are eased has lifted gross sales at Unilever – however rising prices are squeezing earnings.
The patron items large, which owns Magnum, Ben & Jerry’s, Marmite and Hellmann’s, mentioned ice cream gross sales grew by ‘double digits’ within the first half of 2021.
And as individuals ate out extra usually, the agency mentioned gross sales of restaurant provides grew as nicely, together with magnificence merchandise comparable to Dove deodorants and pores and skin lotions.
Unilever boss Alan Jope (pictured) mentioned the corporate’s overheads had been going up ‘throughout the board’, with costs of uncooked supplies comparable to crude oil, palm oil and soy bean oil on the rise
However shares tumbled 5.9 per cent, or 252.5p, to 4050.5p – wiping £6.6billion off the corporate – because the sunny image was clouded by fears of quickly rising prices.
Unilever boss Alan Jope mentioned overheads had been going up ‘throughout the board’, with the costs of uncooked supplies comparable to crude oil, palm oil and soy bean oil on the rise, in addition to the price of freight transport and packaging.
He mentioned the agency had been unable to cushion the blow via financial savings alone – with the underlying revenue margin falling from 19.8 per cent to 18.8 per cent – and warned that worth rises had been on the way in which.
Unilever beforehand fell out with main buyer Tesco when it hiked costs in 2016. However Jope insisted yesterday there was no different sensible choice.
As pandemic restrictions ease the world over, demand for freight companies and uncooked supplies from companies has spiked once more – triggering worth rises.
Jope mentioned this had led to ‘very materials price will increase’ for Unilever the like of which it had not seen for a decade. He burdened that any hikes within the UK and Europe had been prone to be ‘within the low single digits’.
General Unilever mentioned its turnover within the first half of 2021 rose 0.3 per cent in comparison with final 12 months, together with a 1.2 per cent rise within the second quarter.
In meals, gross sales of Magnum and Ben & Jerry’s jumped by ‘double digits’ as Europeans more and more ventured open air and loved the nice and cozy climate.
And in private magnificence, Unilever mentioned gross sales of skincare merchandise grew by ‘double digits’ as nicely.
Regardless of the rosier image, nonetheless, rising prices solid a shadow over the outcomes. And the agency can also be scrambling to include an issue over Ben & Jerry’s choice to cease promoting ice cream in Israeli settlements in occupied Palestinian territories.
Naftali Bennett, Israel’s prime minister, has condemned the ‘clearly anti-Israel step’ and warned Unilever it could have ‘extreme penalties’.
Jope distanced Unilever from the choice by Ben & Jerry’s and burdened Unilever was ‘dedicated’ to Israel.