Unilever has upgraded its sales outlook for the year after reporting a sharp acceleration in underlying volume growth in the second quarter, the consumer goods group said on Tuesday, as it moves to spin off its foods arm into a joint venture with US rival McCormick.
Volume-led performance drives upgrade
The maker of Dove soap and Marmite said second-quarter sales rose by 5.8%, powered by a 5.5% increase in sales by volume — its strongest quarterly volume performance for more than a decade. That momentum prompted the company to lift its expectations for full-year sales growth to sit within its medium-term guidance of 4%–6%, rather than at the bottom of the range as previously signalled.
For the six months to 30 June, Unilever reported:
- Overall sales up 0.5% in the first half.
- Pre-tax profit: €4.66bn (£3.98bn), up 1.8%.
- Operating profit: €4.89bn (£4.17bn), a 2.6% rise; underlying operating profit of €5.2bn (£4.44bn), 0.9% higher on an underlying basis.
- Full-year underlying volume growth now expected to be around 3%, versus previous guidance of at least 2%.
Division performance and portfolio implications
The half-year numbers expose a divergence across Unilever’s portfolio. Food performed noticeably weaker than the rest of the group, with underlying growth of 1.2% in the first half. By contrast, beauty and wellbeing expanded by 5.9%, personal care by 4.8% and home products by 7.6%.
A compact summary of the reported growth:
| Measure | First half / Q2 |
|---|---|
| Overall sales (H1) | +0.5% |
| Sales growth (Q2) | +5.8% |
| Volume growth (Q2) | +5.5% |
| Food (H1) | +1.2% |
| Beauty & wellbeing (H1) | +5.9% |
| Personal care (H1) | +4.8% |
| Home products (H1) | +7.6% |
The results come as Unilever prepares to combine its foods business with McCormick in a transaction announced in March that values the food portfolio at about £33.8bn. The deal will merge brands such as Marmite with McCormick’s condiment range, creating a sizeable food group distinct from Unilever’s stronger-performing personal care and homecare divisions.
“We have delivered a strong volume-led performance in the first half, with a significant step-up in the second quarter – the best volume quarter at Unilever in over a decade,” said chief executive Fernando Fernandez.
Shareholder and strategic considerations
Investors rewarded the upbeat update: Unilever’s shares jumped around 6% in morning trading. Yet the strategic course has not been without controversy. Some shareholders protested at the annual general meeting after the board approved the McCormick joint venture without submitting the transaction to a shareholder vote.
The split leaves Unilever focused on higher-growth beauty, personal care and homecare categories while creating a standalone foods group that could be scaled under McCormick’s stewardship. Management argued the move will "unlock significant value" as the two businesses pursue different priorities and attract different investor appetites.
For the market, the combination of a renewed volume recovery and a major portfolio restructure will be watched closely. The stabilised underlying volumes suggest consumer demand has improved in key categories, but the weaker performance in foods highlights why Unilever sees strategic sense in separating the businesses ahead of further value realisation.
As the year progresses, performance trends in food and the delivery of synergies from the McCormick tie-up will determine whether the upgraded guidance is sustained and how investors re-price the two newly distinct groups.
