Unilever (ULVR) H1 2024 earnings summary

Executive summary

• Underlying sales grew 4.1% in H1 2024, with volume up 2.6% and Power Brands delivering 5.7% USG and 4% volume growth, now accounting for 75% of turnover.

• Gross margin expanded by 420bps to 45.7%, enabling nearly €700 million in additional brand and marketing investment.

• Underlying operating profit rose 17.1% to €6.1bn, with operating margin up 250bps to 19.6%.

• Underlying EPS rose 16.3% to €1.62, and net profit increased 3.5% to €4.0bn.

• Productivity programme and Ice Cream business separation are progressing, with completion targeted by end of 2025.

Financial highlights

• Turnover for H1 2024 was €31.1bn, up 2.3% year-over-year.

• Underlying operating profit: €6.1bn (+17.1%); underlying operating margin: 19.6% (+250bps).

• Underlying EPS: €1.62 (+16.3%); diluted EPS: €1.47 (+5.4%).

• Free cash flow was €2.2bn, down from €2.5bn in H1 2023 due to higher working capital outflow and capex.

• Net debt/EBITDA ratio at 2.0x; net finance cost as a percentage of average net debt was 2.9%.

Outlook and guidance

• Full-year 2024 underlying sales growth expected within 3%-5% range, led by volume.

• Underlying operating margin for the year expected to be at least 18%, with continued investment behind brands.

• Margin progression in H2 expected to be smaller due to tougher comparators and moderate commodity inflation.

• Underlying effective tax rate guidance raised to ~26% for FY 2024.