Unilever chief bullish despite profits fall

Unilever reported a 5% drop in operating profits for the second quarter of the year. The company says that the strong Euro, restructuring costs and rising commodity prices have hit figures.

The consumer goods giant, which owns the Lynx, Dove and Persil brands, says its operating profits fell to £1.08bn, on sales down 1% to £8.19bn. Despite this, Unilever chief executive Patrick Cescau confirmed the company’s outlook for delivering growth ahead of the 3-5% target range.

The company’s commodity costs rose by £472m in the second quarter but it says efficiency programmes are on track to deliver almost £800m in savings over the full year.

Cescau, who is set to retire next year, says Unilever’s performance has been “good in what has been a challenging environment” and has delivered an underlying sales growth of 7%. He pointed to the streamlining implemented under the One Unilever programme, which aimed to make the company nimbler and better able to respond to market conditions.

Unilever says investment in advertising increased by almost £80m over the first half of the year.

Cescau confirmed Unilever’s commitment to leveraging its strongest brands, concentrating on innovation opportunities in health and wellness, underlining many of its brands “vitality” positioning.

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