Benzinga | Jul 22, 2021 11:12AM EDT

Unilever Shares Fall As Inflation Bites Into H1 Profit

* Unilever PLC (NYSE:UL) reported the first-half FY21 turnover growth of 0.3% year-on-year to (euro)25.8 billion, beating the analyst consensus of (euro)25.7 billion.

* The company recorded a 5.4% Y/Y underlying sales growth, with 4.0% volume and 1.3% price.

* The underlying operating profit for the half-year period fell 4.6% Y/Y to (euro)4.85 billion, and the underlying operating margin declined 100 basis points to 18.8%.

* Further cost inflation emerged through the second quarter, the company said.

* Net cash flow from operating activities was (euro)3.04 billion in H1.

* Cash and equivalents totaled (euro)4.2 billion, and net debt amounted to (euro)22.4 billion as of June 30, 2021.

* Underlying EPS for the first half of (euro)1.33 beat the analyst consensus of (euro)1.25.

* "Cost volatility and the timing of landing price actions create a higher than normal range of likely year end margin outcomes. We are managing this dynamically and expect to maintain underlying operating margin for 2021 around flat," said CEO Alan Jope.

* Outlook: The company revealed confidence to deliver underlying sales growth in 2021 well within its multi-year framework of 3-5%, despite more challenging comparators in H2.

* Price action: UL shares are trading lower by 5.19% at $55.65 on the last check Thursday.