The maker of Marmite, Persil and Dove said underlying operating profit margins in the first six months of 2021 were down one percentage point from to last year. , at 18.8%. Unilever said this was in part due to capital spending, but also cautioned against "inflation in input costs ".
Unilever said it expects profit margins to be stable throughout the year, after previously forecasting a slight increase, although it seeks to raise prices to offset higher costs.
Economists around the world are looking for signs of inflation , amid the disruption caused by the coronavirus pandemic. OtherConsumer goods companies have also said they are being hit by rising prices on everything from transportation to raw materials and packaging.
Unilever, whose broad product portfolio includes Domestos Bleach and Glace Magnum, margins fell 2.2 percentage points in beauty and personal care products, while margins in personal care home also fell 1.3 percentage points.
Alan Jope, managing director of Unilever, said it was about 'a "strong first half ", but warned that margins would remain stable in 2021 compared to 2020 due to cost increases.
"We saw new cost inflation emerge in the second quarter, "he said. The" cost volatility "and the varying timing of when price increases hit the business meant itthere was higher than usual uncertainty on ed margin expectations for the full year.
Underlying sales increased by 5 , 4% in the first half of the year compared to 2020, with a turnover of 25.8 billion euros (22.2 bn).
Unilever share price fell 4.3% on Thursday to its lowest level since April after the announcement, making it the worst performance on the London blue-chip index FTSE 100.
Graeme Pitkethly, CFO of Unilever, said a sharp rise in commodity prices, especially petroleum oil crude, palm and soybeans, could prevent the company from increasing its profitability. Rising commodity prices have hit the margins of its personal and home care businesses, ahe said.
The results statement came as Unilever faces an argument over the decision of one of its brands, Ben & Jerry 's, to stop ice cream sales in Israel-occupied West Bank and East Jerusalem . The brand retained a great deal of independence to pursue its "cultural and social mission" when it was acquired by Unilever in 2000.
The decision sparked furor Israeli politicians. , including far-right Prime Minister Naftali Bennett, who promised "serious consequences " for Ben & Jerry 's and Unilever after talking to Jope. Unilever executives on Thursday declined to answer questions about the decision.