We delivered free cash flow of 2.9 billion, an increase of
1.3 billion. The increase was driven by favourable working capital movements, reduced capital expenditure and lower cash tax paid, primarily a result of higher tax on disposals in the prior
year relating to the disposal of the spreads business.
Covid-19 response and support measures: Unilever has put in
place a wide-ranging set of measures to support global and national efforts to tackle the Covid-19 pandemic.
In our own
operations, strict protocols for hygiene and physical distancing are in place for Unilevers sourcing units and distribution centres. Unilevers office-based employees have been working from home since March, with some limited reopening of
office workplaces in selected countries, where stringent requirements have been met.
We are supporting global efforts to tackle
Covid-19, contributing 100 million through donations of soap, sanitiser, bleach and food. We are also working in partnership with others, including a
programme to reach up to a billion people globally with the UK Department for International Development to urgently tackle the spread of the disease through raising hygiene awareness and changing behaviour. We have also made available up to 500 million of cash flow relief for our most vulnerable small and medium sized suppliers, though so far the levels of uptake have been low.
Unilevers financial strength remains robust and we have not sought Covid-19 related financial support from any
governments.
Strategic review of tea: In January Unilever announced a strategic review of its global tea business, which includes leading brands such as
Lipton, Brooke Bond and PG Tips.
This review has assessed a full range of options. We will retain the tea businesses in India and Indonesia and the partnership
interests in the ready-to-drink tea joint ventures.
The balance of Unilevers
tea brands and geographies and all tea estates have an exciting future, and this potential can best be achieved as a separate entity. A process will now begin to implement the separation, which is expected to conclude by the end of 2021.
The tea business that will be separated generated revenues of 2 billion in 2019.
Recent acquisitions: In the first half of the year, we completed the acquisitions of the health food drinks portfolio of GlaxoSmithKline in India, Bangladesh and
20 other predominantly Asian markets. Acquiring the iconic brands Horlicks and Boost is in line with Unilevers strategy to enhance its presence in healthy nutrition.
Beauty & Personal Care
Beauty & Personal Care
underlying sales declined 0.3%, with volume growth of 0.1% and negative pricing of 0.4%.
Skin cleansing saw mid-teens volume-led growth, as we quickly responded to the critical need for hand hygiene to prevent the spread of Covid-19. We rolled out our Lifebuoy hygiene brand to over 50
markets and increased our hand sanitiser capacity by around 600 times across several brands. This helped contribute to double digit growth for Suave. Lock-downs in our markets and reduced personal care occasions amidst restricted living, led
to lower demand for skin care, deodorants and hair care, which each saw volume and price decline. The divisions largest brand Dove remained resilient, with mid-single digit growth. Our Prestige
portfolio was impacted by health and beauty channel closures in many markets. Consumer oral care demand remained robust. However, the category saw negative volumes related to disruption caused by lock-downs in key markets. Turnover decreased by 1.0%
including a 1.3% contribution from acquisitions and an adverse 2.0% currency related impact.
Underlying operating margin in Beauty & Personal Care
increased by 50bps. Gross margin was lower, with negative pricing and an impact from mix, and overheads increased. This was offset by a reduction in brand and marketing investment through lock-down periods.
USG, UVG, UPG, UOP, UOM, underlying EPS, constant underlying EPS, underlying effective tax rate, FCF and net debt are non-GAAP measures (see pages 7 to 10)
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