Solid First-Half Results From Unilever

LONDON -- Good news for long-term buy-and-hold investors -- Unilever (ISE: ULVR.L) this morning reported that it was making progress in its transformation to a sustainable growth company in its first half-year results with robust sales from emerging markets. Emerging-markets underlying sales grew 11.4% in the first half, up 11.0% in the second quarter.

The company, which has a strong portfolio of global brands from food to fabric softener, said turnover was up 11.5% at 25.4 billion euros. First-half underlying sales rose 7.0%, comprising volume growth of 2.8% and price growth of 4.1%. Second-quarter underlying sales growth increased 5.8%.

Core earnings per share are up 6% at 0.76 euro; free cash flow at 1.5 billion euros.

Chief Executive Officer Paul Polman commented:

Despite deteriorating global economic conditions and a competitive environment which remains intense, we again delivered volume growth ahead of our markets and gained value share across the majority of our business. Our performance reflects continued investment in innovation, brand-building and people, whilst keeping discipline on both costs and execution.

The Unilever Sustainable Living Plan is increasingly bearing fruit by accelerating innovation and helping us build stronger relationships with consumers, customers and communities, energising our people and reducing costs. It lies at the heart of our strategy to double the size of the business whilst reducing our overall environmental footprint.

We continue to prepare the ground for future growth. The first half saw the completion of the acquisition of Concern Kalina, Russia's leading local personal care business, Tresemme made excellent progress in Brazil and we launched Magnum in the Philippines, all evidence that we are further strengthening our position as the emerging markets consumer goods company. We are also investing in developed markets: during the first half we successfully launched Clear in the United States and Axe Hair in Europe.

Looking forward we expect continued volatility, especially in commodity costs and economic conditions. We remain focused on profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow, driven by increased capital discipline. For 2012 we remain on track to deliver a modest improvement in core operating margin.

At this afternoon's share price currently trading around 2,255 pence, the company has a prospective dividend yield of 3.8.

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