Unilever's profit drop has been addressed with an increased focus on personal care products and a slight shift away from food products.
The maker of Magnum ice cream, Dove soap and Axe deodorant reported first-half profit of €2.49 billion (AU$3.72 billion), compared with €2.82 billion for the same period last year, on revenue that rose 1.8% to €26.99 billion.
Its overall profit declined 18 per cent at constant exchange rates.
Chief executive Paul Polman said the company faced intense promotional battles in hair care as well as destocking challenges, and chief financial officer Jean-Marc Huët said the markets in which Unilever operates are still weak.
In North America, he said the company achieved “very little volume growth” and came up against fierce promotions in areas such as dressings and hair care.
Unilever has been pushing more high-end products in Europe and North America as the company works to offset a constrained mass market in these regions.
It said last week the strategy helped first-half sales in its personal care, home care and refreshments divisions.
The personal care arm, which is Unilever’s largest, posted a three per cent rise in sales on increases in volume and price.
Unilever has been taking steps to shift its product portfolio away from slower-growing food and toward higher-margin personal care products.
Underlying sales – which strip out the impact of acquisitions, disposals and currency movements – rose 2.9 per cent, slower than the 3.7 per cent that Unilever logged for the same period last year, but slightly ahead of consensus analyst estimates.
Sales in emerging markets, where Unilever did more than half of its business last year, increased six per cent on an underlying basis, down from the 6.6 per cent growth the company reported last year.
Unilever has been taking steps to shift its product portfolio away from slower-growing food and toward higher-margin personal care products.
