Unilever Shares (LON: ULVR) Move Green: H1 Sales Up, FY Margin To Improve

Unilever shares (LON: ULVR) have moved mildly positive on the day, up 0.47% as the firm reported a resilient first-half performance for 2025. The period was marked by a 3.4% underlying sales growth, yet with profit falling back due to currency headwinds.

The company's turnover reached €30.1 billion, a 3.2% decrease impacted by a 4.0% adverse currency effect and 2.5% from net disposals. However, a strong gross margin of 45.7% allowed for increased brand and marketing investment, rising 40 basis points to 15.5%.

Underlying operating margin stood at 19.3%, down 30 basis points year-on-year. Underlying EPS decreased 2.1% to €1.59, with diluted EPS down 3.7%. Free cash flow was €1.1 billion, reflecting lower operating profit and costs associated with the Ice Cream separation.

CEO Fernando Fernandez highlighted the strength in developed markets and positive interventions in emerging markets.

“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,” he stated.

Unilever's productivity program is ahead of schedule, expected to deliver approximately €650 million in savings by the end of 2025. The company also increased its quarterly dividend by 3% compared to Q2 2024, further boosted by a completed €1.5 billion share buyback.

The consumer goods giant is also continuing to progress with the strategic demerger of its Ice Cream division, slated for mid-November.

The operational separation of the Ice Cream division is complete, remaining on track for demerger. This strategic move aims to unlock value by allowing the Ice Cream business to operate independently.

Looking ahead, Unilever anticipates full-year 2025 underlying sales growth within the 3% to 5% range, with second-half growth expected to outpace the first half. The company projects an improvement in underlying operating margin for the full year, with second-half margins of at least 18.5%.