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Food & drink

Unilever reaping 'very powerful' cost tailwinds, Barclays suggests

Unilever PLC (LSE:ULVR)'s second quarter might see it beat expectations for a third period running, suggest analysts at Barclays.

This ‘hat-trick’ would be represented by organic sales growth (OSG) of 4.4% split between volumes of 2.9% and price hikes of 1.5%.

Star performers have been Latin America, up 8.6%, and Beauty & Wellbeing, up 6%, with the laggards nutrition and ice cream.

Europe is also a problem area suggested the bank, though a hot spell in May might have boosted ice cream sales there.

Indonesia, comprising 6% of group-wide sales, is another weak spot due to persistent consumer boycotts, though Barclays is hopeful sales recover to flat in the second quarter.

Finally, Barclays believes Unilever might even report material costs deflation (NMI) of as much as €0.8 billion, which would imply a benefit over 2023 of €2.3bn or “a very powerful gross margin tailwind”.

Barclays adds that Unilever’s India business (11% of sales) reports on Tuesday (23 July) with PLC results on Thursday (25 July).

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