Unilever (ULVR) Q2 2026 earnings summary

Executive summary

• Achieved strong, accelerating volume-led growth in H1 2026, with Q2 underlying sales up 5.8% and volume up 5.5%, marking the best quarterly volume performance since 2010.

• Power Brands, now 78% of turnover, outperformed with Q2 underlying sales growth of 6.9% (6.8% from volume), driven by innovation and focused marketing investment.

• Emerging markets delivered strong momentum, with Q2 growth of 8.3% (7.4% from volume), led by India, Indonesia, and Latin America, while developed markets saw robust 2.8% volume growth.

• Margin expansion of 10 bps and underlying EPS growth of 2.4% to €1.61, despite cost volatility and commodity inflation.

• Foods separation and combination with McCormick progressing, supporting portfolio transformation.

Financial highlights

• H1 2026 underlying sales growth of 4.8% (4.2% from volume, 0.6% from price); Q2 growth accelerated to 5.8% (5.5% volume).

• H1 turnover was €25.6bn, up 0.5% YoY; acquisitions added 0.7%, currency reduced turnover by 4.9%.

• Underlying operating profit €5.2bn (+0.9% YoY); underlying EPS up 2.4% to €1.61.

• Free cash flow €1.5bn, up €0.5bn YoY, driven by operating profit and working capital.

• Underlying operating margin up 10 bps to 20.3%; gross margin declined 70 bps YoY due to inflation but improved sequentially.

Outlook and guidance

• Upgraded FY 2026 outlook: underlying sales growth of 4%-6%, with ~3% volume growth.

• H2 2026 growth expected at 4%-5%, led by pricing as inflationary pressures persist.

• Modest improvement in underlying operating margin expected versus prior year.

• Currency headwinds to moderate in H2; full-year finance cost expected below 3%.

• Underlying effective tax rate guidance remains around 26%.