• Underlying food sales up 1.4%
  • Refreshment LFL sales up up 2.7% but volumes down
  • Margin improvements on lower overheads, mix improvements

Unilever has booked higher sales in its food and refreshment units, with both businesses also reporting improved margins in the first half.

The company said this morning (23 July) first-half underlying sales increased 1.4% to EUR6.4bn (US$6.99bn) at its foods business. Growth was supported by savoury cooking products in emerging markets and soup in Europe.

Underlying volumes from Unilever's food division were up 1.5%.

The company said innovation is focusing on "natural" products, like Knorr wet soups, and healthier products, such as fortified stock cubes. Hellmann's also demonstrated "good growth" with higher sales in Latin America and the introduction of squeezy packaging in North America.

In spreads, a business Unilever separated out into a stand-alone unit at the start of this month, sales continued to by hit by a "sustained contraction" in developed markets. The group was, however, upbeat on its outlook as a stand-alone unit with additional "focus" and a drive to reposition its portfolio in more attractive segments like melanges and premium cooking oil blends.

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Lower overheads lifted foods' core operating margin by 30 basis points, the company added.

Refreshments, which includes Unilever's ice cream brands, saw underlying value sales growth of 2.7% to EUR5.5bn. Sales value was supported by mix shifts as the company focused on innovation behind its premium brands, including Magnum and Ben & Jerry's. Sales volume declined 0.5%. Margins at the unit were up 60 basis points, with "strong" overhead reduction.

Both businesses' sales trailed Unilever's group top line performance, with group underlying sales up 2.9% including the higher growth personal and home care interests. Group sales totaled EUR27bn in the half and reported sales – lifted by currency exchange – rose 12%.

Commenting on the results, Unilever CEO Paul Polman said: "The first half demonstrates again the progress we have made in the transformation of Unilever to deliver consistent, competitive, profitable and responsible growth, now in the seventh year.

"We plan for another year of volume growth ahead of our markets, steady improvement in core operating margin and strong cash flow."