Sumary of Unilever expects flat profit for the year after being hit by rising costs:
- The consumer goods giant Unilever has said cost increases could hit its profits, despite a rise in sales during the first half of 2021.The maker of Marmite, Persil and Dove said underlying operating profit margins in the first six months of 2021 fell by one percentage point compared with last year, to 18.8%.
- Unilever said it expected profit margins to be flat over the full year, having previously forecast a small increase, even as it seeks to raise prices to make up for higher costs.
- Other consumer goods companies have also said they are being hit by higher prices on everything from transport, to raw commodities and packaging.
- Unilever, whose vast product portfolio includes Domestos bleach and Magnum ice-cream, said margins were down by 2.2 percentage points in beauty and personal care products, while margins in home care also fell by 1.3 percentage points.
- Alan Jope, Unilever’s chief executive, said it was a “strong first half”, but warned that margins would remain flat during 2021 compared to 2020 because of cost increases.
- “Cost volatility” and the variable timing of when price rises will reach the company meant there was higher uncertainty than usual over the expected margin for the full year.
- Unilever’s share price dropped by 4.3% on Thursday to its lowest since April after the announcement, making it the worst performer on London’s blue-chip FTSE 100 index.