Unilever (UL) Q2 2026 Earnings Report

Overall the call was positive: management reported sustained, accelerating volume-led growth (best quarterly volumes in over a decade), stronger performance from power brands, robust emerging market momentum, improved cash generation and an upgraded full-year outlook. Notable challenges remain — meaningful currency headwinds, commodity-driven gross margin pressure, underperformance in Foods (U.S. condiments) and near-term risks (Brazil tax reform and potential volume sensitivity as pricing lands). On balance, the operational momentum, margin discipline and cash strength outweigh the headwinds, supporting an optimistic outlook.

Unilever upgraded its full‑year outlook, now guiding underlying sales growth of 4–6% with around 3% volume growth (UVG) for 2026 and second‑half growth of 4–5% led by pricing; management expects pricing to build in H2 as commodity inflation lands (≈€550m in H2, ≈€850m full year, range €800–900m). Gross margins are expected to be broadly similar to H1 (≈46.8%) while delivering a modest full‑year improvement in underlying operating margin versus 2025 (H1 margin 20.3%, +10bps); H1 turnover was €25.6bn, free cash flow €1.5bn (+€0.5bn), underlying EPS €1.61 (+2.4%), brand & marketing at 16.1% of turnover (normative 15–16%), overheads improved ≈70bps and the €800m productivity program was completed. Finance costs ran at ~2.5% of average net debt (expected <3% FY), underlying effective tax rate is ~26%, and currency was a headwind in H1 (−4.9% turnover, ~−6pp EPS) but is expected to moderate to ~−3% for the full year.