Unilever Shares Fall As Inflation Bites Into H1 Profit

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  • Unilever PLC UL reported the first-half FY21 turnover growth of 0.3% year-on-year to €25.8 billion, beating the analyst consensus of €25.7 billion.
  • The company recorded a 5.4% Y/Y underlying sales growth, with 4.0% volume and 1.3% price.
  • The underlying operating profit for the half-year period fell 4.6% Y/Y to €4.85 billion, and the underlying operating margin declined 100 basis points to 18.8%.
  • Further cost inflation emerged through the second quarter, the company said.
  • Net cash flow from operating activities was €3.04 billion in H1.
  • Cash and equivalents totaled €4.2 billion, and net debt amounted to €22.4 billion as of June 30, 2021.
  • Underlying EPS for the first half of €1.33 beat the analyst consensus of €1.25.
  • "Cost volatility and the timing of landing price actions create a higher than normal range of likely year end margin outcomes. We are managing this dynamically and expect to maintain underlying operating margin for 2021 around flat," said CEO Alan Jope.
  • Outlook: The company revealed confidence to deliver underlying sales growth in 2021 well within its multi-year framework of 3-5%, despite more challenging comparators in H2.
  • Price action: UL shares are trading lower by 5.19% at $55.65 on the last check Thursday.
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