Unilever Reports Robust H1 2026 Growth with Decade-High Volume Surge and Advances Foods Division Spin-Off

Decade-Best Quarterly Volume Growth Propels Sales Momentum

Unilever recorded 4.8% underlying sales growth in H1 2026, with volume contributing 4.2 percentage points and pricing 0.6 points. The company accelerated growth in Q2 to 5.8%, driven by an outstanding 5.5% volume increase—the strongest quarterly volume performance in over a decade—reflecting solid execution and market traction, especially in emerging markets such as India, Indonesia, and Latin America.

This volume-driven growth highlights strong consumer demand beyond pricing strategies. On a two-year average, H1 volume growth reached 2.7%, signaling sustained consumer purchasing across regions and categories. All four business groups—Beauty & Wellbeing, Personal Care, Home Care, and Foods—achieved volume-led growth, with Q2 showing amplified momentum.

Power Brands Drive Expansion with 6.0% Underlying Sales Growth

Unilever's Power Brands, representing 78% of turnover, posted 6.0% underlying sales growth and 5.4% volume growth in H1. Key brands such as Dove, Sunsilk, Vaseline, Cif, Domestos, Comfort, and Hellmann's contributed significantly. The Power Brands’ outperformance underscores Unilever’s strategy of focusing on fewer, larger, and more investable brands, with Q2 underlying sales growth estimated at 6.0%, reflecting strengthening momentum.

Beauty & Wellbeing Power Brands—Dove, Sunsilk, and Vaseline—delivered double-digit volume growth in H1. Dove, the segment’s largest brand, achieved high-single digit growth in deodorants and skin cleansing, supported by premium innovations and FIFA World Cup 2026™ marketing in Q2. K18, the ultra-premium hair care brand acquired during prestige beauty expansion, showed strong double-digit growth driven by biotech innovations, validating Unilever’s strategy of blending mass-market scale with premium positioning.

Beauty & Wellbeing Segment Generates €6.5 Billion with 5.9% Growth

The Beauty & Wellbeing segment, accounting for 25% of turnover, achieved €6.5 billion in H1 revenue with 5.9% underlying sales growth—4.5% volume and 1.3% price growth. This segment includes hair care, skin care, and wellbeing categories, with hair care posting high-single digit growth fueled by premium Dove Fibre Repair innovations. Q2 growth accelerated to 8.1% underlying sales and 6.9% volume, reflecting strong market traction from marketing and product launches.

Growth was broad-based across geographies and premium tiers. Emerging markets sustained high-single digit growth, while developed markets accelerated to mid-single digits in Q2. Wellbeing brands Liquid I.V. and Olly expanded notably, with Liquid I.V. achieving double-digit Q2 growth. Prestige beauty brands Paula's Choice, Hourglass, and Tatcha accelerated, though Asia Pacific Africa growth remained softer. Underlying operating profit reached €1.3 billion, up 1.0% year-on-year, with operating margin expanding 10 basis points to 19.5%.

Personal Care Achieves €6.8 Billion Turnover with Strong Category Performance

Personal Care, representing 27% of turnover, generated €6.8 billion in H1 revenue, delivering 4.8% underlying sales growth—4.1% volume and 0.7% price growth. Deodorants and skin cleansing, the largest categories, posted mid-single digit growth. Dove led with high-single digit growth in both categories, supported by share gains and premium innovations. FIFA World Cup 2026™ campaigns boosted Q2 results, with 5.9% underlying sales and 6.8% volume growth.

Geographically, the US and emerging markets grew mid-single digits, while Europe grew low-single digits amid softer conditions. North America improved to high-single digit volume growth in Q2, driven by Dove. Brazil saw high-single digit deodorant growth in Q2 following pricing and shelf space adjustments. Price growth reflected strong prior-year comparators and planned Q2 promotions; acceleration is expected in H2 due to commodity cost inflation. Underlying operating profit reached €1.5 billion, up 4.8% year-on-year, with operating margin up 10 basis points to 22.2%.

Home Care Leads with 7.6% Growth Fueled by India and Brazil

Home Care, 23% of turnover, delivered the highest growth among business groups with 7.6% underlying sales—7.4% volume and 0.2% price growth—generating €6.0 billion in H1 revenue. Performance was broad-based, with India achieving its highest-ever Home Care market share and double-digit growth, and Brazil posting high-single digit growth following 2025 pricing corrections. Q2 growth accelerated to 9.1% underlying sales and 8.8% volume.

Fabric cleaning saw high-single digit growth, including double-digit expansion in India, Brazil, and Indonesia. Home & Hygiene achieved mid-single digit growth, with Cif and Domestos growing double- and high-single digits respectively, driven by premium innovations. Fabric enhancers like Comfort grew high-single digit volume-led. Emerging markets grew high-single digits; developed markets grew low-single digits. Underlying operating profit was €0.9 billion, up 3.2% year-on-year, with operating margin up 30 basis points to 15.8%, despite commodity and FX pressures offset by brand investment discipline and overhead improvements.

Foods Division Posts €6.3 Billion Revenue with 1.2% Growth Amid Market Challenges

Foods, 25% of turnover, generated €6.3 billion in H1 with modest 1.2% underlying sales growth—1.2% volume and flat pricing. Growth was driven by emerging markets, notably India’s mid-single digit growth led by double-digit Horlicks expansion through innovation and execution. However, developed markets faced softness and increased US condiments competition, prompting corrective measures in premium and avocado mayonnaise segments. Q2 growth slowed to 0.2% underlying sales.

Cooking aids including Knorr were flat; Knorr’s low-single digit emerging market growth was offset by developed market declines. Condiments grew low-single digits by volume, with Hellmann’s maintaining momentum in emerging markets. Unilever Food Solutions grew low-single digits in volume, with China and US markets expanding. Foods growth is expected to accelerate in H2 via innovation and commodity-driven price increases. Underlying operating profit was €1.5 billion, down 4.3% year-on-year; operating margin remained flat at 23.3%, as commodity inflation and increased customer investment offset overhead gains.

Operating Margin Rises 10 Basis Points to 20.3% Despite Currency Challenges

Unilever’s underlying operating profit reached €5.2 billion in H1 2026, up 0.9% year-on-year, with operating margin expanding 10 basis points to 20.3%. This was achieved despite 4.9% currency headwinds and commodity inflation pressures. Gross margin declined 70 basis points to 46.8%, reflecting volume leverage and productivity benefits offset by inflation and pricing strategies, notably in Home Care. FIFA World Cup 2026™ promotions impacted Q2 gross margin.

Brand and marketing investment remained stable at 16.1% of turnover, down 10 basis points year-on-year, supporting Power Brands. Operating overheads improved 70 basis points due to early completion of the €800 million productivity programme and disciplined cost management. GAAP operating profit rose 2.6% to €4.9 billion, aided by operational performance and lower restructuring costs. The company expects modest full-year 2026 operating margin improvement over 20.0% in 2025.

Strong Growth in Asia Pacific Africa and Emerging Markets Offsets European Weakness

Geographically, Asia Pacific Africa (44% of turnover) generated €11.3 billion with 7.3% underlying sales growth—6.1% volume and 1.2% price—accelerating to 8.8% in Q2. India posted 8% consolidated growth with 6% volume, accelerating to 10% in Q2, gaining market share across business groups. Home Care and hair care reached record market shares in India during Q2. China achieved mid-single digit growth driven by premium innovation. Indonesia grew 7%, fueled by high-growth segments and go-to-market transformation.

The Americas produced €9.7 billion turnover with 4.6% underlying sales growth—4.2% volume and 0.4% price—accelerating to 5.7% in Q2. North America (40% of developed markets turnover) grew 2.7% underlying sales with 3.2% volume, outperforming the market. Q2 growth improved to 3.6% with 4.4% volume. Latin America grew 7.6% underlying sales with 5.7% volume and 1.7% price, driven by Brazil’s corrective actions and Argentina’s strong growth. Europe generated €4.6 billion but declined 0.9% underlying sales with flat volume and 0.6% price headwinds, affected by soft markets and Foods pricing challenges, though Beauty & Wellbeing, Personal Care, and Home Care gained share. Emerging markets (60% of turnover) achieved 7.0% underlying sales growth with 5.8% volume, accelerating to 8.3% and 7.4% volume in Q2.

Capital Returns Include €1.5 Billion Buyback and 3% Dividend Increase

During H1 2026, Unilever returned significant capital to shareholders, completing a €1.5 billion share buyback announced in February 2026. The Q2 2026 dividend was set at €0.4664 per share, a 3% increase from Q2 2025 and consistent with Q1 2026. The company reaffirmed capital allocation priorities: investing in growth and productivity, portfolio reshaping through acquisitions and disposals, shareholder returns via dividends, and deploying surplus cash for buybacks.

Looking forward, following the Foods business separation with McCormick expected by mid-2027, cash proceeds and operational performance are projected to support €6 billion in share buybacks from 2026 to 2029. Strategic acquisitions and divestments in H1 included acquiring Grü̈ns, a US-based vitamin and mineral supplement leader, in June 2026, and divesting Graze, Indonesia Tea Business, and stakes in ice cream operations including Kwality Wall's (India) and Portuguese joint venture to TMICC.

Unilever Foods Spin-Off with McCormick Progresses Toward Mid-2027 Completion

Unilever advanced its Foods division separation via combination with McCormick in March 2026, with dedicated teams managing carve-out financials, tax, antitrust, synergies, and integration. On 23 July 2026, McCormick announced the combined company’s operating model, executive team, and London as the secondary listing venue. Completion is expected by mid-2027, pending shareholder and regulatory approvals and customary conditions.

Works Council consultation is ongoing and will conclude before closing. The merger aims to create a focused health, personal care, and hygiene pureplay from Unilever, while establishing a global flavor leader by combining Foods portfolios. This aligns with Unilever’s "Desire at Scale" framework emphasizing scaling fewer, larger, investable brands. The transaction’s cash proceeds are expected to underpin the €6 billion share buyback programme through 2029.

€800 Million Productivity Programme Completed Ahead of Schedule

Unilever finalized its €800 million productivity programme early, initiated in 2024 to streamline operations and eliminate overheads linked to the Ice Cream Business Group separation. Early completion contributed to a 70 basis point reduction in operating overheads in H1, showcasing effective cost discipline. These savings enabled competitive Power Brands investment while expanding margins, with operating margin rising 10 basis points to 20.3% despite currency and commodity pressures.

This success highlights Unilever’s operational execution and supports confidence in upgraded 2026 guidance. The combination of structural cost cuts, volume-driven operational gains, and disciplined brand investment positions the company to manage inflation while sustaining pricing discipline and volume growth. Brand and marketing spend remained at 16.1% of turnover, down only 10 basis points, indicating savings stemmed from operational efficiencies rather than reduced marketing support.

Upgraded Full-Year 2026 Guidance Reflects Strong H1 Performance

Following a strong first half, Unilever raised its full-year 2026 outlook, now forecasting underlying sales growth within its multi-year 4%-6% target and approximately 3% volume growth. The company anticipates 4%-5% underlying sales growth in H2 2026, driven by pricing as commodity-related price increases continue. A modest improvement in full-year underlying operating margin over 20.0% in 2025 is expected, reflecting operational discipline and growth investments.

CEO Fernando Fernandez stated: "We delivered a strong volume-led H1, with a remarkable step-up in Q2—the best volume quarter in over a decade. Our Power Brands outperformed, with all Business Groups posting volume-led growth. Emerging markets showed momentum, including India, Indonesia, and Latin America, while North America outperformed its market. Despite macroeconomic uncertainties, our consistency, discipline, and strong H1 performance position us well to achieve our upgraded full-year outlook."