Unilever is wrapping up Q2 in a better-than-expected position. Underlying operating profit sits at €5.8bn, beating analysts’ forecasts of €5.7bn.
Boosts in volume (1.5%) and price (1.9%) sees underlying sales growth up 3.4% overall. Unilever’s Foods portfolio is up 2.2%, showing improved growth compared to Q1.
But that pales in comparison to the company’s Ice Cream division, which recorded underlying sales growth of an impressive 5.9%, with 3.8% from volume and 2% from price.
Unilever sets ice cream demerger date
Unilever’s ice cream results are good news for The Magnum Ice Cream Company (TMICC), which will spin off in mid-November 2025. Ice cream brands implicated include Ben & Jerry’s, Wall’s, and Magnum.
TMICC has been operating as a separate entity within the company for around one month, in preparation for its incorporation in the Netherlands.
For Unilever’s incoming CEO Fernando Fernandez, the healthy growth of its ice cream business comes as the multinational enhances the “fundamentals” of the business, with “improved execution and impactful innovations”.
Ice Cream’s healthy volume growth is positive news for TMICC, which is currently looking for investors. When the division is officially spun off, it will be listed in Amsterdam, London and New York.
Unilever has confirmed it will maintain an equity interest, with a share holding of just under 20%. The company is required to hold these shares for up to five years, after which it will look to reduce its stake in an “orderly fashion”, says interim CFO Srinivas Phatak. Selling off these shares will help the business cover costs associated with the demerger, as well as paying down its debt.
Food performing amid major brand ‘prune off’
While Ice Cream is leading the charge, Unilever’s Foods division is also showing resilience amid portfolio changes. The company’s Q2 results saw an acceleration in margin growth for its Foods business, which is notable given the company has been ‘pruning off’ a number of brands.
The company sold The Vegetarian Butcher to JBS-owned Vivera, Unox and Zwan to Zwanenberg Food Group, and is rumoured to be planning a Graze sale.
Although underlying sales growth in Foods is largely driven by price (1.9% compared to 0.3% from volume), it’s moving in the right direction. CEO Fernandez is “happy” with the portfolio: “It’s a good performance in foods”.
Much of its success comes down to mayonnaise brand Hellmann’s, which together with Knorr accounts of 60% of the multinational’s Foods business. “Hellman’s is going from strength to strength,” he says, particularly in Brazil and the US where it holds “very strong leading positions”.
After a slightly shakier Q1, Unilever believes it’s now in a good position for the full year. “In the second half, we expect further acceleration in emerging markets, particularly in Asia, and sustained momentum in developed markets,” says Fernandez.
Investors should expect underlying sales growth to sit within 3-5%, with second half growth ahead of the first half. The company is also expecting an improvement in underlying operating margin for the full year. After Q2, it sits at 19.3% – a boost from 18.4% in 2024.
But the CEO warns economic conditions can be difficult to predict. “The macroeconomic and currency environment is uncertain and we will be agile in adjusting our plans as necessary.”
