Good morning. Welcome to Unilever's half year results. As in Q1, we're presenting our results to you from our respective homes, please bear with us if things are not as smooth as normal. I will begin with an overview of the business and performance, and we will cover each of our three divisions before asking Graeme to cover the regions in much more detail. Alan will then wrap up with some concluding remarks. We will keep the prepared remarks to around 30 to 40 minutes, leaving plenty of time for Q&A. We also let word-outs available live from the type on screen as part of our Accessibility Program. First, can I draw your attention to the disclaimer to forward-looking statements and non-GAAP measures. With that, let me hand over to Alan.
Thanks, Richard, and good morning, everybody. The performance in the first half, particularly Q2 , I think, has shown the true strength of Unilever in these most demanding conditions. We demonstrated the resilience of the business in our portfolio, in our continuing step up in operational excellence, and in the financial position of the business. We've unlocked new levels of agility in responding to these unprecedented fluctuations in demand, and we've continued to strengthen the strategic future of the company. I would like to use this moment to thank every member of the Unilever team for the outstanding commitment and hard work that they've shown in these most difficult of circumstances. Thanks, guys. To the results themselves.
Underlying sales declined 0.1% in the first half, volumes down 0.3% and price growth of 0.2%. Essentially flat growth in aggregate masks some very big positives and negatives across our categories and geographies. We'll explain those in the course of this call. Underlying sales growth was led by our developed markets, which grew 2.4%, while emerging markets declined by 1.9%. Graeme is going to share more about what's happening at a country level. This DM versus EM aggregation needs decomposition to understand what's really going on. Underlying operating profit was EUR 5.1 billion, which is a 3.8% increase versus the same period last year on a constant rate basis. This generated underlying free cash flow of EUR 2.9 billion, which is up EUR 1.3 billion versus last year. That was led by working capital improvements as we focus on managing our receivables with vigor.
I explained during our Q1 update that we're targeting the business on delivering competitive growth, absolute profit, and cash. To avoid any doubt, I'm repeating again that our margin target outlook is withdrawn, both for this year and beyond. Our focus for the year will continue to be volume-led competitive growth, absolute underlying operating profit, and cash delivery. Margin is simply a by-product of this. Underlying EPS increased by 6.4%, and we are maintaining our quarterly dividend in line with the prior period. Now, from the start of this COVID-19 crisis, we've been guided by a clear set of priorities that are very much in line with our multi-stakeholder business model to protect our people, safeguard supply, respond to new patterns of demand, obviously support our communities, and preserve cash and balance sheet strength. That has demanded that we move with tremendous agility.
Let me just call out a few examples in each of these spaces. We've redeployed 8,300 of our people to focus on areas of high demand space. We've also unlocked 300,000 hours of people's time through our internal digital talent marketplace that we call Flex. What that does is it matches employees who have capacity with projects and opportunities to do interesting new types of work. Data from our personal productivity suites of software shows that we have become more collaborative and productive. We've seen a 41% increase in overall productivity, a 20% increase in internal collaboration time, and interestingly, a 19% increase in external meeting time. Use of our learning system has increased by 150%. We've had over 1,000 leadership town halls, including a weekly global town hall open to everyone. I think as a result of all of that, we've seen record levels of employee engagement.
In fact, our employee well-being score is up by 14%. I think there's been two extraordinary achievements from our supply chain in the last few months. The first is how we've managed to keep all 221 of our factory sites running despite fairly radical lockdowns in many countries. As I'll show in a minute, we've also been able to scale up to support massive surges in demand in some categories and pull back where we've seen major drops. An important part of this responsiveness has been to reduce our overall complexity. Again, I want to thank our supply chain colleagues for their amazing work. On demand, our teams have reacted very quickly to capture the new growth opportunities that this crisis has presented. We'll go into that in a lot more detail, but I want to just give you three examples.
With Unilever's next EUR 1 billion brand, Lifebuoy, which has been launched now in over 50 new markets in 100 days. We've tapped the opportunity in foods that's been presented by radical shifts in home meal consumption. You'll see numbers in a sec. You know that our ice cream business has been hit hard by a sharp drop in out-of-home consumption. Our teams have moved at speed to drive strong in-home consumption. We've unlocked the innovative Ice Cream Now home delivery e-commerce business. We're busy activating our 100 Days of Summer campaign as lockdowns lift, although looking out the window here in Edinburgh, the 100 Days of Summer are a bit scarce. Communities. We've benefited from our product donations. We're working through the Hygiene and Behaviour Change Coalition to tackle COVID-19 in low income countries through hand hygiene and surface hygiene interactions with Lifebuoy and Domestos.
Listen to this, the first phase of the program will reach 330 million people, including more than 100 million healthcare workers in around 40 countries. These are great examples of brand do and the clear role of purpose during a pandemic. Adding on cash, the H1 number speaks for itself. We maintain our financial strength, and I want to underscore that we have not sought COVID-19 related financial support from any governments. The step up in operational excellence that we're seeing is directly attributable to the five growth fundamentals that we set out back in January. They're as important as ever, and they are our blueprint for excellent execution. Improving penetration has a direct positive impact on volume growth and volume market share. We know from experience, many crises over the years, that protecting volumes during a recession is the key to long-term competitive growth.
Brands which grow volume during recessions tend to grow value share over the subsequent five years, 1.4x faster than those that don't. We've seen strong recent increases in our household penetration for our brands. We're now just over 50% of our business winning volume market share. Now is not the time for a lot of complexity in our innovation program. During this crisis, we're focusing on the innovations that bring higher incremental turnover. For example, in hygiene, in driving healthy in-home eating, offering better value products, and innovations that are designed for some of the faster channels, in particular e-commerce. We've already cut over 20% of the tail of innovations, and we've reassessed all of our innovation plans in the light of COVID-19. Online shopping, especially online grocery shopping, will not revert to pre-COVID-19 levels once social restrictions are no longer in place.
I'll give a few more headlines on e-commerce in a moment. In a recession, the role of price, value, and affordability is of course key, and consumers are switching brands and pack sizes as people look to shop smart. It's never been more relevant for brands to demonstrate their positive contributions to society and address the issues that our consumers care about in an authentic way. We're investing more of our marketing spend on communication, which is explicitly purposeful. I've already talked to our brands like Lifebuoy and Domestos, which are communicating their hygiene message. In doing so, they're providing information that's very relevant to COVID-19. We're seeing that purposeful brands matter more to consumers and perform better. We believe that's going to be during the end of the crisis.
At the same time as demonstrating our resilience and agility, we've been taking actions to strengthen Unilever for the longer- term and drive our strategic change agenda. We've announced the proposals to unify our legal structure to create a simpler company with greater strategic flexibility. After a comprehensive review over the last 18 months, the board continues to believe that it is in the long- term interest of Unilever and our many stakeholders to modernize our complex legal structure. It's 90 years old, and it's time to put Unilever on a level playing field with other companies so that we're best positioned for future success. As part of shaping our portfolio, it was actually in the second quarter that we completed the acquisition of GSK's health food drinks portfolio in India, Bangladesh, and 20 other predominantly Asian markets.
We've acquired those iconic brands, Horlicks and Boost, and it's very much in line with our strategy of enhancing our presence in healthy nutrition. In January, we announced, as a conclusion of our overall portfolio review, that we would conduct a strategic review of our global tea business. It includes leading brands like Lipton, Brooke Bond, and PG Tips and the review is every imaginable. We will retain the tea business in India and Indonesia, and the partnership interest in our ready to drink tea joint ventures, the balance of Unilever's consumer geographies, and all of the estates, but very exciting future. This potential can be best achieved, we believe, as a separate entity, and a process will now begin to achieve this separation, which is expected to conclude by the end of 2021.
Just for noting, the tea business that will separate should make between zero and EUR 2 billion. In addition, while the world continues to grapple with the devastating effects of COVID-19 and issues of escalating inequality, it's more important now that we don't lose sight of the climate crisis and the very real and serious risks that it creates for all of us. Climate change, nature degradation, biodiversity decline, water scarcity, they're deeply interconnected problems, and we're committed to finding ways to tackle them simultaneously. In June, we announced a wide-ranging set of commitments to help fight climate change and to protect and regenerate nature. These commitments, they build on our target to halve the greenhouse gas footprints of our products across the entire value chain by 2030.
They include achieving net zero emissions from all of our products by 2039, which is 11 years ahead of the 2050 Paris Agreement deadline. To accelerate action around, over the next 10 years, we'll collectively invest EUR 1 billion in a new dedicated climate and nature fund. These commitments are the next step in our vision to boost sustainable global business impact. Our multi-stakeholder model remains as important as ever. Getting core out to the performance of the divisions. I'd like to show how COVID-19 is impacting the different categories in our portfolio using category groupings, which are the best way to understand our performance in the period. This chart shows our H1 and Q2 growth rates.
In the following slides, we'll focus in on Q2, but here we're giving both these points because Q2 is the first full quarter that's seen the complete impact of COVID-19 on the portfolio. The variations in the demand are stark. Our hygiene portfolio, which is made up of home cleaning and skin cleansing, had a turnover of EUR 4 billion in the first half. It grew by 17% first half and 26% in Q2. The other parts of the portfolio where we were able to deliver strong Q2 growth is the sizable in-home Foods & Refreshment business. You see that at the bottom, that grew by 17%. The contrast though, on the right-hand side of the chart, our food solutions and out of home ice cream businesses together declined 42%, and those are severely impacted, obviously, by lockdown restrictions.
You can see underneath this rather bland, flat top line impact, huge volatility at category level, and Graeme will give a similar flavor of the dynamics by country. Let's move to our divisional performance. Within Beauty & Personal Care, our skin cleansing business grew by 27% as we quickly responded to the demand for hand hygiene products, and that being liquid hand wash and hand sanitizer. We had a very small hand sanitizer business prior to the outbreak of COVID-19, and we only had two manufacturing sites. By the end of the first half, our hand hygiene business is already larger than that of the market leader last year in the whole of 2019. It really is a truly remarkable example of speed and teamwork. We now have over 60 sites producing hand sanitizers.
We've stepped up capacity across multiple plants by a factor of, believe it or not, 600x in just five months. We've launched sanitizers in 65 new markets. Our prestige portfolio did decline by 10% in the quarter. That was impacted by health and beauty channel closures in many markets and on 2/3 of our sales. Our prestige business has been pivoted to e-commerce at pace and has grown strongly, but not enough to offset the impact of retail store closures. For the rest of Beauty & Personal Care, there has been a decrease in usage in some of the discretionary examples. Hair washing, hair styling, colorants have all been impacted by the lockdown living as people have not been socializing or going out to work. There's simply been fewer personal care occasions.
With such big variations, and especially when looking at competitive performance, we really need to look at subsegment levels because there's such a wide range of market growth rates across categories and subsegments. On the right you'll see we break down skin cleansing into bars, body wash, and hand hygiene, which is made up of liquid hand soap and sanitizers. We have been able to grow ahead of the market in all of those subsegments, but just look at the incredible variation in growth rates. Similarly, in the hair care category, we're seeing different impacts in different subsegments with particularly sharp drops in hair styling segment where we opened next. Right, moving to Foods & Refreshment. As anticipated, out of home food and refreshment declined in fact by 42%.
That was due simply to the closure of out-of-home channels during lockdown, restaurants, canteen, leisure sites, travel hubs, tourist destinations, and so on. Our foodservice business declined by 56%, and out of home ice cream by 35%. Though I have to stress that these remain fundamentally strong and strategically attractive businesses that we do expect will return to good levels of growth when leisure and eating out habits return to normal. In contrast, I think the hidden jewel in the portfolio has been our in-home food and refreshment portfolio that has grown by 17% in the quarter as consumers have eaten more soups, used more meal kits, and accompanied their meals with mayonnaise and a nice ice cream as dessert.
Restricted living has meant that consumers are spending more time at home, we saw an increase in sales of food for scratch cooking as well as in-home tea and ice cream, that's been especially true in our U.S. business. Reflecting the shift that I already mentioned to online shopping and media consumption, Knorr's digital recipe inspiration campaigns and our recipe websites really helped drive e-commerce conversion and strong double-digit sales growth. In fact, our Foods & Refreshment e-commerce business to consumer business grew by 139% in the second quarter, that was driven by our ice cream home delivery, Ice Cream Now e-commerce business. Lastly to Home Care, where home and hygiene sales were up 24% in the quarter with increased consumer demand for household cleaning products such as Cif surface cleaners, which grew by 20%.
Working with environmental health experts, Domestos bleach is educating consumers about the targeted cleaning of high-touch surfaces in the home to help prevent the spread of COVID, Domestos grew by 37%. Within laundry, fabric solutions declined slightly, impacted by the geographical lockdowns in Asia, although interestingly, future formats such as capsules and liquids continue to grow. I have to give a shout-out to our cleaning brand, Seventh Generation, which saw strong double-digit volume-led growth. Fabric softeners did decline in low- single digits. The last chart before I hand over to Graeme. We're also, as I mentioned, seeing significant channel shifts as consumers' behavior changes as a result of COVID-19. I want to just give a little bit of a drill down on e-commerce, which continues to accelerate. Online shopping is here to stay even after social restrictions are no longer in place.
E-commerce represented over 8% of the business in the first half. That's up from 6% in 2019. Sales on e-commerce grew by 49% in the half, 62% in the second quarter. That includes the drag on growth from foodservice e-commerce. We've really seen strong growth across all e-commerce channels, with acceleration coming in the second quarter. eB2B, for example, the Compra Agora business in Brazil that we've explained several times, that grew by 78% in Q2. Pure-play e-commerce grew by 58%. Omni-channel grew by a remarkable 120%. Through a geography lens, we saw e-commerce growing strongly in all of the key markets, particularly in the second quarter, up 48% in Brazil, 59% in China. I think 177% in North America. E-commerce now represents 12% of North American sales in the first half. That's doubled from 6% in just 2018.
In line with the five growth fundamentals that I mentioned earlier, we are ensuring that our innovation and marketing activity are well-designed for e-commerce. You can see a few examples here. Our Cif ecorefill range does provide the value density that makes it perfect for e-commerce. As I mentioned a couple of times, we're tapping into the eat-at-home meal delivery occasions with our Ice Cream Now program. We have changed almost all of our advertising messages, both the content and the media choices. We've stopped out-of-home advertising. We've eased back advertising to people in severely locked down areas who are unable to shop. By contrast, our brands are communicating digitally with messages that are relevant for lockdown living. Things like Stay Inspired, home barbecue seasons, and the summer staycation messages that I'm sure many of you will be familiar with.
With that, let me hand over to Graeme to talk in a bit more detail about the regions and our financial results in a bit more detail. Graeme.
Thanks, Alan. Before I cover our geographies, I would like to say a few words about the current environment. The WHO has again reported a record increase in COVID-19 cases across the globe, with confirmed daily cases per million still trending up in geographies of the world. There are now more than 12 million cases globally, with over 5,000 people a day losing their lives to this terrible disease. The risks presented by the pandemic have not reduced, and many experts are warning of the risks of a second wave. While the search for a vaccine goes on, we will perhaps all need to be prepared for a sort of two steps forward, one step back dynamic in the months ahead.
With our wide geographic breadth, we're often asked how we see the macro environment developing over the coming months and years. Let me offer a few comments on that subject. The only certainty at the moment in economic forecasting is that there's a huge range of possible outlooks, each containing differing assumptions, mostly driven by the scale and duration of lockdowns, the impact of restricted living conditions on consumer spending as lockdowns are eased, as well as ultimately the timeline for a vaccine. Unilever's in-market agility and the strength of local leadership is an important asset as we navigate through this widely varied picture of uncertainty and volatility. We believe that talk of a quick recovery is definitely at the optimistic end of the scale. A deep global recession has already started. Consumer habits are changing quite dramatically.
We're seeing a rapid rise in unemployment across markets, and even for those with jobs, we know some consumers will choose to save more. In a recession, the role of price, value, and affordability will be paramount in driving the penetration of our brands, and we know that this is frankly an area of strength and deep experience for Unilever. Currencies and commodities have been very volatile in the first half, and we've seen an acceleration of currency depreciation through the second quarter. I'll come back to the impact of currency on our first half results and our currency outlook for 2020 a little later on. The spread of COVID-19, combined with the lockdowns and restrictions that have been implemented in many countries, has led to significant changes in the operating environment in our markets.
As Alan has just said, the performance during the first half really shows the true strength of Unilever. Although it's of varying severity, with some having more acute impact on the supply and accessibility of goods, particularly those in India and in China. China was the first of our markets to be impacted by COVID-19, entering lockdown in January. Sales slowed significantly during the lockdown period, but with some recovery after April as the economy in China opened back up. In most other major markets, sales patterns in January and February were quite normal, and COVID-19 didn't impact until March onwards. Brazil was impacted later than other major markets, with the effects primarily being felt in the second quarter, exacerbating conditions in a region where they were already very challenging. Let me turn now to the regions in a little more detail.
Underlying sales declined by 2.7% in Asia/AMET/RUB, with volume decline of 2.9% and positive pricing of 0.2%. Volumes were impacted by lockdowns of varying severity imposed across the region. China was the first market to enter lockdown, as I said, back in January. It was eased in April. China declined in the first quarter. Following the relaxation of restrictions, China returned to mid-single digit growth in the second quarter, although food service remained challenging. India and the Philippines declined as strict lockdowns were imposed from March onwards, disrupting the flow of goods and negatively impacting consumption of discretionary personal care categories as consumers stayed at home.
Market growth in India had already been slowing prior to the spread of COVID-19, and the market was further impacted by the introduction of a strict national lockdown at the end of March. This national lockdown continued until early June, when it was then followed by further regional lockdowns. Thailand was particularly negatively impacted from reduced tourism. Regional lockdowns were imposed in Indonesia as COVID-19 spread, and while growth was positive over the half year, sales declined in the second quarter. Latin America grew by 1.9% with volumes down 0.8% and pricing 2.8%. The impact of COVID-19 in the region was concentrated in the second half of the period. Brazil and Mexico grew in the first quarter, but volumes declined in the second quarter as COVID-19 spread. Mexico declined low- single digits in the first half of the year, following a mid-single digit decline in the second quarter.
Brazil grew low- single digits in the first half with a low- single digit decline in the second quarter. Volumes grew in Argentina throughout the first half of the year, driven by in-home foods consumption against a backdrop of a prolonged and quite strict lockdown. Underlying sales growth in North America was 7.3%, with 7.7% from volume and a decline of 0.4% from price. This H1 growth includes a negative impact of around three percentage points from our food service and prestige businesses, which were impacted by channel closures. The decline in these businesses was more than offset by increased consumption of in-home foods and ice cream, as well as hygiene products, consumption which was sustained throughout the second quarter. Our Foods & Refreshment division, excluding the impact of food service, grew by 23% in Q2 as the supply chain responded quickly to increase products experiencing big surges in demand.
In Europe, underlying sales declined 1.8% with negative volumes of 1% and price down 0.8%. Negative volumes in Europe were a result of significant declines in the out-of-home ice cream and food service channels, as well as some reduced demand for personal care products. The most severely impacted countries were Italy and Spain, where increased demand for in-home eating and hygiene products only partially offset the negative impact of prolonged lockdown periods on tourism and out-of-home consumption, especially for ice cream. In the U.K. and Germany, however, increased demand in in-home eating and hygiene products more than offset declines in negatively impacted categories. Turnover for the first half was EUR 26 billion, a decline of 1.6% versus prior year, driven by currency. Underlying sales growth declined by 0.1%. Acquisitions and disposals increased turnover by 1.1%, with acquisitions contributing 1.2%.
In the second quarter of the year, we completed the acquisitions of the health food drinks portfolio of GlaxoSmithKline in India, Bangladesh, and around 20 other predominantly Asian markets. During the second quarter, we also closed the transaction to buy out the minority shareholders of our subsidiary in Malaysia. Net currency related items reduced turnover by 2.5% and based on spot rates, we would expect a negative currency translation impact of around 4% on turnover. Underlying operating margin increased by 50 basis points to 19.8%. Gross margin reduced by 30 basis points with some impact from volume deleverage in our out-of-home businesses. The major fluctuations between countries and category rates, which we've talked through earlier, resulted in a negative mix impact on gross margin of around 40 basis points in the half and 90 basis points in the second quarter.
We've also incurred additional costs to adapt and run our supply chain safely and hygienically and ensure the continuity of our operations with new sourcing routes and increased distribution costs and additional temporary labor to cover absenteeism. Taken together, these impacts reduced gross margin by around 40 basis points in the first half and 65 basis points in the second quarter, and we expect that they will continue at least for the balance of this year. Brand and marketing spend was down 100 basis points. We've been adapting and reallocating our BMI spend very dynamically on a weekly basis as the status of country lockdowns has changed and as consumer habits have altered. We reduced spend in channels, geographies, and categories where local conditions meant that investment would have been wasted, but have diverted investment to support the many growth opportunities.
For example, in Q2, we dialed back BMI food service by 40% due to restaurant closures and in ice cream by 30% due to the significant declines in out-of-home ice cream consumption. We protected and, in some cases, increased our investment in skin cleansing and home and hygiene. Taking a geographic lens, we dialed back BMI by 15% in China in Q1, but then increased spend by 16% in Q2 as the country came out of lockdown. We've been very focused on ensuring that the quality of our communication has not been compromised. For example, we've used more agile asset creation techniques, re-editing existing advertising to be more relevant for the current environment. This, combined with a softening in total advertising spend across markets, has increased efficiency in advertising. Let me be clear, we are in no way BMI constrained.
We've been very dynamic with our investment and have deliberately kept some of our powder dry in managing the challenges of Q2. In the second half of the year, we plan to invest heavily as lockdowns ease, consumers learn to live with COVID, and we expect significant investment to support brand campaigns and product innovations tailored to this environment. Overheads increased by 20 basis points. That included an adverse currency mix. Underlying earnings per share increased by 6.4% at current rates and by 10.1% at constant rates. Operational performance contributed 3.9% to EPS. Finance costs positively impacted EPS by 2.4%, driven by lower debt, one-off interest income in Brazil and India, and higher interest costs in the prior year as a result of a EUR 40 million impact from the revaluation of cash balances that we held in Zimbabwe following the devaluation of the new Zimbabwe dollar.
We expect the interest rate on net debt to be below 3% in 2020. Reduced tax costs contributed 5.4% to EPS, with our underlying effective tax rate declining to 22.6%. This was helped by a number of tax settlements compared with 26.2% in the first half of 2019. The favorable impact was driven by a reduction in the India tax rate and the replacement of Indian distribution tax with a dividend withholding tax. We expect that our tax rate will be around 25% for the full year in 2020. These movements were slightly reduced by an increase in net profit attributable to minority interests following the completion of the merger between Unilever's listed subsidiary in India and GlaxoSmithKline's consumer healthcare business there.
Currency movements reduced EPS by 3.7% in the first half. Based on spot rates, we would expect a negative currency translation impact of around 5% on EPS in 2020. Alongside competitive volume-led growth, absolute profit, and cash, that's our three simple but important KPIs. They really are the cornerstone of how we are managing our performance during the pandemic. Free cash flow in the first half of 2020 was EUR 2.9 billion, up EUR 1.3 billion from EUR 1.6 billion in the first half of 2019. The improvement was primarily led by working capital improvements, in particular, a reduction in receivables year on year. To make sure that we convert absolute profit into cash, we've set up specialist teams in every market to focus on receivables.
Whilst we will bring in the cash on time, we will also pay our suppliers on time and even early for small suppliers where they need it. This is part of our commitment to make available up to EUR 500 million of cash flow relief for any vulnerable small and medium-sized suppliers. Cash tax paid was lower as the prior year included payments relating to the disposal of the spreads business together with other tax settlements. Unilever has a very robust balance sheet and a strong liquidity position, which is reflected in our credit ratings, which are currently A1/single A for long-term debt. It is critical that we maintain our strong balance sheet in these uncertain and challenging times. Our net debt remains 1.9x EBITDA, in line with our long-term leverage target of around 2x .
We have U.S. and European commercial paper programs with around EUR 1.3 billion of outstandings at the end of June, backed up by around EUR 7 billion of undrawn committed facilities. In the first quarter, we secured EUR 2 billion of additional funding in the debt capital markets. This was a prudent move to take advantage of the relative market stability at that time to bolster our headroom and our financial flexibility. At the end of June, our cash and undrawn facilities totaled EUR 11.9 billion, which is 2.7x the amount of debt that we have maturing over the next 12 months. Our pension deficit has increased by EUR 0.2 billion since the 31st December of 2019 to EUR 0.4 billion, that was a result of falling discount rates, partially offset by positive investment returns. With that, I'll hand back to Alan to wrap us up.
Apologies, guys. Lesson learned not to hit hang up when you're trying to hit unmute. There's, I think, little doubt that the first half of 2020 has seen some of the absolute most testing conditions that most businesses have ever encountered. We do feel that Unilever has demonstrated the resilience of our business in our portfolio, in our continued step up in operational excellence, and in the financial strength of the company. We've unlocked new levels of agility as we responded to record levels of growth, and frankly, record levels of decline in some countries and categories, all at the same time. Our supply chain has shown that it can switch off, switch on, and adapt at pace.
To strengthen the strategic future of the company through our unification portfolio, the evolution of our portfolio, and the climate and nature commitments that we made as part of Sustainable 2030. We know it is possible to delay the COVID-19 as a permanent feature. There is no quick fix, and a new normal will emerge. Only expansion of 30%, so we are not income constrained in the second half of the year or beyond. We have planned to invest heavily behind the FA through the first half, and are optimists. As Graeme said, there's a huge range of possible macroeconomic outcomes. We believe in a quick recovery is optimistic.
Cash is what they invest, our balance sheet is what people see. I think from a growth mindset, what is important is that we continue to drive operational excellence through the fundamentals and leverage our capabilities to drive volume-led competitive growth alongside absolute profit, including profit and cash. With that, thanks for listening. Let's make the most of the period behind us and look to the future. Thank you.
Hi, Alan. I have online questions. As a reminder, please use the Q&A function for any business-related questions. To engage with the conference call and speak with a host, please raise your hand if you want to ask a question. Finally, please limit questions to a maximum of two questions.
Question in from Warren Ackerman at Barclays Investment . You had a very much longer company, certainly a lot of competitors penetration for increasing geographics, top 65 salespeople, doesn't play for those, and maybe going further toward market share generally, whether it's previous or only 20%, given a good quarter, and secondly, on margins, for Graeme, down a bit from brand and marketing in the first half. Can you say to it, Graeme, about what are the immediate reflections you are seeing, whether you expect margins in the second half to be down with the gross margins of OMO being quite stepped up in the second half? Did I get it right, 20% high target is after today when the results are also released? Thank you.
Well, thanks very much, Warren. As you directed, I'll take the first question, and I'll let Graeme take the second one. Firstly, thank our listeners for indulging us with a slightly longer than usual set of introductory remarks. It is because we wanted to give you the composition of the business and again, the first question. I'll commence with the point. I just know that penetration is increasing, volume share increases, and that volume share increases are a very good indicator of lasting value share increases through and beyond recessions. Secondly, on value share, it's actually a very similar picture. Throughout most of last year, our market shares were bouncing around at around 40% of the business winning. Again, we're now over 50%.
Actually, that doesn't vary very much between the top 62 category country sales that we are laser focused on and the total United States. One mathematical anomaly that I laid down a marker for you on was skin cleansing, where believe it or not, despite dramatically growing share in each of sanitizers, hand wash, body wash, and bar soaps, given our different market shares in those segments, so typically lower shares in hand hygiene, higher shares in bars and body wash, coupled with the different growth rates, we actually didn't gain share in aggregate in total skin cleansing. If we were to look at it subcategory by subcategory and aggregate that rather than at a total category level, the number would be much higher than 50%, but we decided not to change the basis of measurement. We felt that it'd be more straightforward to keep repeating.
Trending in the right direction and the reason why you're not seeing an even higher number is that sub-segment difference. I hope that answers the question clearly. Over to Graeme on margins.
Hi, Warren. Let me start with your question on BMI. I hope you got the message in the prepared remarks that in the second half, we expect to be investing more BMIs. The lockdowns start to ease. We've certainly kept some powder dry in managing the first half challenges. We do expect a step up there. On the question of softening in media rates, yes, there has been a softening in media rates across markets. It's been very varied. It's ranged from nothing in some places to 40% in other places. Broadly, across the piece, it's been maybe in the range of 20%-25%. Actually, if you think about our 3.5% or so of turnover that we spend on media, and you apply that across it, that accounts for at least some part of the benefit that we saw from BMI in the first half.
Yeah, that's the landscape on brand and marketing investment. One other thing to say, actually, we do track, obviously, our share of voice over the period that we're above 100 year to date, that gives us some reassurance. We're investing in the right place, even though it was a very dynamic environment with dial backs and areas of specific investment in specific places. On the question of overall margins up or down, what can I say? I'll give you a comment on gross margin in particular. We were down 30 basis points, as you saw, on the first half. We are seeing, and we expect to see mid-single-digit commodity inflation.
As we called out in the presentation, there are some meaningful ongoing on-costs from COVID in gross margin, and there's some meaningful ongoing negative mix impacts from the places where we're seeing surges in demand and the places where we're seeing dial backs in demand. We expect that those trends will continue. That's really all I'm going to say on margin because as Alan was very clear on the call, yes, we are not giving any margin guidance for 2020, and we are not giving any margin guidance beyond 2020. We're managing the business focused on competitive volume growth, absolute underlying operating profit delivery, and converting that underlying operating profit into cash, and the margin will just be an outcome of that, Warren.
Thank you, Warren. For our next question, can we go to Guillaume Delmas, now at UBS. Go ahead, Guillaume.
Good morning, gentlemen. I hope you can hear me okay. Couple of questions for me. The first one is on North America. You achieved, I think, one of your best quarterly or underlying sales growth there in more than a couple of decades. How should we think about it? Is it down to strong category growth rates in the quarter, or is it also reflective of significant share gains? I guess any indications around a potential discrepancy between sell-in and sell out in the first half of the year. I guess what could be quite helpful would be also any indicators around the exit rate in this region. The second question is on mix, which had an adverse impact on your gross margin. Are you already seeing some evidence of downtrading in some parts of the world, in some part of your portfolio?
At this stage, is this negative mix effect essentially the consequence of COVID-19 disproportionately affecting your higher gross margin distribution channels? Thank you.
Okay, Guillaume. Why don't we stick with the pattern, Graeme? I'll take the first one, you take the second one. On North America, yeah, let me try and be very simple. The exit rate remains strong. There was no kind of fast start in the quarter and then tailing away. North America has remained more or less constant through the quarter. Secondly, there's no discrepancy between sell in and sell out. I think we're well beyond us loading up the shelf and in anticipation of some sort of panic buying. If anything, we're struggling slightly to keep up with demand, North America, and service levels are slightly below where I'd like them to be with the, and particularly buying in some sub-segments. I think it's fair to say that our market shares in North America reflect a competitive performance. We've addressed the hot spots.
We're doing well in ice cream, we're doing well in dressings. Actually we're doing well in Beauty & Personal Care competitiveness, although that market's not growing as quickly as the other parts. The reason why we're seeing such strong growth in North America is partly also related to mix. We have a very strong in-home foods business in North America, and our ice cream business in the U.S. is more driven by in-home than out of home. We're seeing tremendous strength in hygiene, in skin cleansing, in in-home consumption of food, and that includes ice cream, where it's not such a big out of home component. Short answer, I think it's us participating in strong category growth with competitive market shares, no mismatch between sell in and sell out.
We're certainly not selling in ahead of sell out, and the exit rate was more or less the same as the ingoing rate. On that, I'll hand over to Graeme to share some perspectives on mix.
Guillaume, there are many ways and axes through which you can look at mix, of course. You can look at it through a divisional mix, a category mix, a country mix, or even at the level of SKU and pack mix. I'll try and stay at the level of category mix, though. I'll give you an example. Growth in skin cleansing, which has been enormous versus the other parts of our BPC business. Our skin cleansing business has a lower relative gross margin within BPC, but a very healthy bottom line operating margin. You see that show up in the mix. Another example is reduction in out-of-home ice cream, which is a higher relative gross margin than in home ice cream. It is driven at that fundamental level of where we're seeing surging demand and where we are seeing declines in demand or indeed channel closure.
On the question of consumer pricing and recessionary consumer behavior, of course it seems inevitable, I think, that there's a global economic downturn. What we don't know is the depth and length of that. We don't know which countries are going to be hit hardest as yet. Of course, when we hit a recession, consumers are going to look for value. It's important to distinguish that from cheapness. Consumers are looking for value and affordability. The role of price, value, and affordability is going to become very important. We think we are good at reading and delivering affordability and value in Unilever. We don't tend to react by radical price slashing. You think about the fundamental value equation in our brands, pack sizes, for example, that's a good example of it.
Now, our value portfolio in Unilever, which is described as less than 80 average price index, is pretty well positioned. We've got about 20% of the Unilever portfolio in the value segment, about 45% is in the mid-Tiers, and about 35% is in premium. That's a good start and a lot of branded players don't play at all so it's a pretty good start for us, but we're not done yet. We have set up a number of targeted squads around the business working to identify and plug gaps in the value portfolio market by market, particularly in low unit price packs and lower Tier brands. Of course, that value portfolio has a different P&L profile. It typically has a lower gross margin, but it also has lower BMI requirements, and it does still contribute strongly to the bottom line and typically doesn't impact bottom-line margin, et cetera.
I think we're well-placed. We're starting to see the effects of trade down. We're planning for it, and we're doing a lot of work within the business to make sure that we're ready for the recession ahead and we're strong on the value portfolio.
Okay, thanks, Guillaume. I'll go straight to the next question, which is Alan Erskine from Credit Suisse. You're on, Alan.
Hi, good morning. Can you hear me?
Yep.
Yes, Alan. Yeah, we can.
Hello? Perfect. Okay. Perfect. Sorry. Okay. Most of my question has been asked. Just two quick ones. One, Graeme, can you just go through the other moving parts in the gross margin? Obviously it's 130, but you're saying 80 bps is down to mix and COVID, and there's also some fixed cost deleveraging within the gross margin. What is the offsetting benefit? Is that lower raw material prices, higher pricing, less trade promotions? Can you just give me some of the feel for that and maybe how that might play out in the second half? Then just a very quick question just on two hotspots, specifically, U.S. and China haircare. How did your shares perform there in Q2? Thank you.
Okay, Graeme, you crack on gross margin decomp. I'll talk about U.S. haircare.
Yeah. Hi there, Alan. We had the You picked up the points on negative mix and the on-costs of operating our factories safely through the crisis. The other two moving parts are essentially, what's happened in terms of raw material costs, input costs, et cetera, and what happened with pricing. That was slightly positive in the gross margin. In terms of how that. Oh, one other comment, actually. Obviously, in any given year, we have a number of strong savings programs in the supply chain. They have been slightly curtailed from the normal performance we would expect to see in peacetime, so to speak, because it requires things like factory changeover, line changeover.
It requires innovation change-out to land some of those savings, and that's obviously been curtailed through the first half of the year, as we've been focusing on the A and B SKUs, softening the demand signal, concentrating on the products with the greatest level of demand. As I said, there are many moving parts within it. At a fundamental level, I just go back I think to the answer to Guillaume's question. I think we will see the main movements in gross margin being driven by the mix impact as we move into more of a value position portfolio over time. That's how I would summarize that.
Thanks, Graeme. Warren, U.S. hair, our market share there is down very slightly, and it's largely because of the portfolio mix. We are over-indexed in styling in the U.S., which has seen radical reductions, growing very slowly. I think it's down 30%. We're disproportionately hit by that. We have a secret weapon, which is called Suave, and we know that when downturns kick in, the biggest penetration using personal care brand in all and we fully anticipate strong performance from that because of the great value that it offers. The channel and value proposition on Suave will be great for the coming months. China is the opposite direction. I think Graeme mentioned, or somewhere we mentioned that China was growing mid-single digits. China hair is up 2 to 3x that. Growing market share, benefiting a little bit from re-pipelining after the China lockdown.
Our China hair business is extremely strong. Growing share and growing volumes and growing revenues.
Okay. Thanks, Alan. Our next question is from James Targett at Berenberg. We're going to let the call run for about 10 minutes to try and get one or two more questioners in, but we can't do it for much longer than that. Over to you, James.
Oh, hi. Thank you. Really appreciate all the subcategory color. It's very helpful. Two questions. Just on the innovation pipeline. Alan, at the start, you talked about the rationalized approach, maybe sort of fewer, bigger launches. Do you expect the total value of your innovation pipeline to fall or its contribution growth? Is it just about focusing the efforts on bigger projects? Does that focus reduce your local competitiveness at all? Before you were planning to sort of be more agile and responsive to local competitors. Secondly, just on foodservice and prestige, I wonder if you could comment at all about the exit growth rates in the quarter you were seeing in those two channels. Thank you very much.
Okay. Graeme, do you want to have a crack at the first one? You can talk about food solutions and prestige.
Thanks, James.
First question is, we believe focusing the portfolio innovation will drive higher overall incremental turnover. It sounds ridiculous, but it is, as we try and constantly strike this balance between global and local, I do think that we got carried away on too long a tail of small innovation, trying to address every opportunity locally. Concentrating our resources, buying fewer, bigger, seems to have the impact of better growth. We've got a role model for that, which is Actually, we have two role models for that. One is our Home Care business, and the other is deodorants, which typically set the pace on having focused innovation agendas. It definitely does not compromise local relevance.
In a way, I wish I could call up a few slides that I used with our board yesterday to show how we were responding in skin cleansing, home hygiene, and retail foods with making new mixes that tap the zeitgeist. We've got a huge array of hand wash products, not just antibacterial Lifebuoy, but skin caring in the form of Dove, because everyone's hands are red raw from overwashing. Great sensory hand washes from Lux and so on. A huge assortment of hygiene issues in skin cleansing actually, so sanitizers, but also professional hygiene solutions, which is growing really quickly. On the home and hygiene, alongside rolling out Domestos for a few markets, we've got naturals mixes that we launched, for example we're launching in some big emerging markets where people for chemicals came the money for the times that we're in right now.
I think in foods, we've been very focused on. Let me describe it in three different ways. The first is affordable at-home eating solutions, and we've got lots of interesting new products in that space. The second is the continuing macro trend toward plant-based, which is where we've focused disproportionately. The third is solutions specifically designed for e-commerce delivery. It's not just chopping off the tail, that's the easy bit. It's actually retooling the innovation program to be relevant for the times that we're in. That will definitely generate more incremental turnover, not less. Graeme, maybe you can cover a few points in the presentation.
Hi, James. Let me just dimensionalize for everybody once again, the food service businesses. It's 5% of Unilever in total, 20% of the business is in China, 25% of the business is in the EU. Sorry, Europe, I should say. 10% of the business is in the U.S. It's important to give that mix because, as we said in the presentation, the growth rate very strongly impacted by the impact of lockdown and recovery, et cetera, across different geographies. Yes, there's been very strong sequential improvement month-on-month, James, as the lockdowns have eased. We were down 70% in April in UFS, 60% in May, but only 38% in June. I don't know whether you can extrapolate that trend or not, that at least gives you a sense of the exit momentum as we came out of the second quarter. Prestige, a similar trend.
Prestige was in 10% in the quarter. I think Q2 is the toughest quarter for the business there. Just to dimensionalize that, it's about a 600 million business. It is quite a U.S. business, actually. Two-thirds of the business is in the States, about 1/3 outside the States. It sells through a channel structure, which is very dependent on health and beauty channels. Sephora, Ulta, department store sales, et cetera. That's about 2/3 of the sales. It was, I should say, because there's been a tremendous shift in demand in Prestige from the bricks and mortar channels, which were closed during the second quarter into online. There's been some really strong growth in e-commerce sales in Prestige, a number of the brands within the portfolio actually continued to grow.
One of the biggest drivers of the decline in Prestige was our color cosmetics business because, of course, color cosmetics is something where the consumer typically wants to try the product, typically wants to be working with a physical experience. Hourglass Cosmetics was down quite significantly, but we understand the reasons for that. Overall, I think our Prestige business is on a very improving trend as stores begin to open up again. I think we will be able to hold on to the shift that we've seen moving into e-com for the brands, and that is a very positive trend.
Just one other thing to mention, you might have seen that in China, the regulations regarding animal testing are now being resolved. We are building some exciting plans, multi-year plans, to start to bring more of our beautiful Prestige portfolio into the big market of China.
Okay. Thank you, James. Graeme, we've just moved your next meeting by 10 minutes, so you can take a few more questions.
Thanks for that.
Is from Martin Deboo at Jefferies. Over to you, Martin.
Yes, morning, everyone. Two quick and unconnected ones from me. First of all, you didn't mention the West Africa business, I don't think. I raise it because it was part of the sales warning in December. Where was that business, Nigeria, Ghana, trending in H1? Can I reconfirm, I think it's got a very easy comp in H2, hasn't it? That's the first question. Second question, on the tea demerger, I get the hold on to India and Indonesia bit. Can you just talk a little bit about why you're holding on to the JV, the rationale for that? What happens to the IP of the Lipton brand? Do you sell that? Just how does all that work? That's the second question. Okay. That's it.
Right. Thanks, Martin. I actually want to put a footnote on what Graeme said about the relaxation of animal testing requirements in China. That didn't just happen. That happened because Unilever has been working with the Chinese FDA for a decade on making that amendment and persuading them that the alternative models to animal testing are reliable and safe. We're very proud of that, and it will open up an opportunity for us. Now, Martin, to your question. West Africa is still not in good shape. Just as we start to get our inventory in balance, the oil markets are collapsing. That's maybe a bit dramatic, but they're certainly not strong. I think we'll see year-over-year growth in the second half in West Africa because of the dreadful comps last year. I still don't think it's a business that's in real good shape.
We've got new leadership in there. We've got a sort of opportunity to rebase, which we've done. We're updating our route to market systems, but it's in the most difficult circumstances. Yeah, mathematically, there'll be a year-on-year comparison improvement. I don't want to start celebrating prematurely that we're out of the woods in West Africa. Graeme, tea.
Yeah. The first thing to say, Martin, is our announcement is that we'll take EUR 2 billion of the business excluding India, Indonesia, and the joint venture with Pepsi, and we'll separate that, and we'll take our time to work out what happens with that business, what the best way to have that business thrive in future is going to be. As usual, we'll be highly guided by value creation in everything that we do. I just wanted to reassure everybody of that.
When it comes to the joint venture with Pepsi, interestingly, from a market perspective, the ready to drink tea market is 2/3 of the global tea market. It's much bigger. It's nearly twice the size of the leaf tea market around the world, and it's been an extremely successful joint venture between ourselves and Pepsi. It's one of those joint ventures where each party brings a unique experience.
Unilever in terms of the brand and marketing capability, and Pepsi in terms of their expertise in bottling and distribution, and it has worked very well for a long period of time. That principally is the reason why we've left that out of the conclusion of the strategic review. You're right to point out that it does present a change going forward, potentially, with regard to the Lipton brand, because if there is a different owner or a more separate operation of the Lipton brand in hot tea or leaf tea rather, then there'll be some need for some form of split arrangement. Given the essential difference between the two categories of ready to drink tea and leaf tea, we're sure that that's very manageable, so no real concerns there.
Thanks, Martin. Next question from Alicia Forry at Investec. Go ahead, Alicia.
Hi, good morning, everyone. I just wanted to ask about your expectations for an India rebound in H2 that you've kind of alluded to in the past. We saw Hindustan Unilever had some pretty strong results, relatively speaking, and you've got easy comps there too in H2. Just curious, anything you can say about India in the second half. Secondly, you've mentioned consumers have embraced eco-friendly packaging perhaps even more rapidly than before the crisis, during the crisis. I'm curious which areas of the business are seeing the greatest impact of this change, and has there been any effect on gross margins as a result of this?
Thanks very much, Alicia. Graeme, which of these questions would you like to have a crack at?
I'll take India, please, Alan.
Thought you might.
Is that okay? Alicia, let me tackle the India question first. Just a few comments on the Indian market. As you know, the market was slowing from very strong rates of growth a couple of years ago. It was on a downward trajectory from a market growth perspective even before COVID hit us. I think the markets were growing about 6% in 2019, down to about 4% in March of 2020, and below 2% into the first quarter. Then the lockdown hit. I think any thinking around an Indian rebound, we'll know what's the answer because it will depend on the status of lockdown in India state by state, locality by locality. I think that's going to be the main driver on what happens in India. Having said that will be what it will be.
What I can say is that our business in India is extremely competitive. We have more than 80% of the business winning market share right now, and we're seeing share gains in the last three months reached. 80% of our business in India is in the health, hygiene, and nutrition space, so it's very well positioned. Can't give you a sense of what might be because it will be determined by the progress of the virus and lockdowns. What I can say is that our business in India is performing very well through the crisis, and as I said, is very competitive and has a well-positioned portfolio going forwards.
Yep. I'm going to pinch a bit more on India and just say I'm very worried about the disease conditions in India. I think it's important that we think of India as winning. We talk about winning in many India. That's how we'll be managing the business. I think there'll be parts of India at any given point in time that are kind of booming, and there'll be other parts that are under lockdown, and the government have shown their tremendous ability to respond at a state or city level to the disease conditions. I think the combination of an agile government and an agile business will serve us very well from a competitive perspective. It's anybody's guess what way the disease will move.
As regards sustainable packaging, let me just say that our sustainable living brands continue to grow much faster than the rest of the portfolio. There are headwinds and tailwinds on consumer adoption of sustainable packaging. The headwind is that eventually lower oil prices will pass through to low virgin resin pricing, and that makes the differential between virgin resin and post-consumer use recycled material greater. We welcome the European legislation that starts to put cost against virgin material in order to give an advantage to recycled material, and we hope that that will accelerate the adoption of more sustainable packaging, particularly plastic packaging. As regards to your very specific question about detailed consumer growth or decline based on sustainability, that's so precise a data point in a environment where we're seeing gigantic swings.
The honest answer is that I have no idea what impact it's having on sales in the short- term, but we know that over time, sustainability drives growth, and packaging is a very demonstrable part of sustainability. All of our divisions have got big pieces of work going on moving towards less plastic, better plastic, and no plastic options for the packaging.
Okay. Thanks, Alicia. Go over to David Hayes at Société Générale, if you could ask a question, David.
Thanks, Richard. Good morning, gentlemen. I hope you're well. Just give me one on the U.S. sales, one on the margins. The U.S. sales, just to come back to this discussion on exit rates and obviously very impressive performance in the quarter. Is there still an element of pantry loading in that market? Obviously, there are pockets of uncertainty and surges in COVID-19 rates. I'm just trying to understand whether there is still a dynamic that within March and April, that's just gone on for longer, or whether when you talk about that exit rate, you see there continuing a high single-digit growth into the third quarter. If not, what kind of things change that? Why would it slow, given that exit rate? Then on the margin side, just restructuring costs not massively different to last year first half. You talked about less closures and savings.
Is there some COVID-19 one-off cost that you're able to book as restructuring because it is effectively an organizational process change? I guess related to the cost savings side of it, should we expect quite a step up in cost savings second half as you say, come out of the sort of reactionary phase and now into more controlling the situation phase? Thanks so much.
Great. Thanks, David. I'll repeat the points on the U.S. Let me try and be even more direct. Our categories were not particularly impacted by pantry loading. You need to go talk to the paper guys about that. We have seen sustained high levels of consumption. I think, the question that we're trying to get our heads around on how quickly or how long that will carry on for, and we see no signs, quite frankly, of it slowing down at the moment, is comes back to two questions. How long will U.S. consumers remain preoccupied with hygiene? We think probably for quite some time. This is how long will meals continue to be consumed at home at a differentially higher rate than normal versus consumed at home. Again, after China, at the time of the second wave of pandemics, the H1N1, the so-called SARS.
We saw it took ages for the Chinese consumer to become comfortable going back to the level of restaurant eating that they exhibited prior to that wave. I think we're kind of seeing that actually in the rest of the world. Bad news for our food solutions business, where we're planning on a slower recovery. Good news for our retail foods business. Given the mix that we have in the U.S., we're really benefiting from preoccupation on hygiene and in-home eating much more so than the unusually large size of American pantries. That's not been a particular asset for us. Graeme.
Hi, David. You're quite right. We normally have a lower restructuring spend in the first half. Projects tend to get accelerated through the second half, and usually the second half phasing is a little bit more. We spent just around about EUR 400 million on restructuring in the first half, which was pretty similar, as you said, to the first half last year. For the full year, we think we'll come in maybe EUR 900 million-EUR 1 billion, something around that sort of range. That's less than we expected. We have slowed down a number of restructuring projects through the first half as we focused on just managing the business going forward. There'll be a delay there, and that's reflected in that sort of outlook of maybe EUR 900 million-EUR 1 billion. On the impact of COVID, no, we haven't taken anything into restructuring from COVID.
You saw in gross margin the impacts of mix, the impacts of all the on costs in the factory. That's all in the P&L. Even the commitments we made to support communities around the world with donations, that's sitting in the P&L as well. We've just taken that all through the P&L. To the extent, though, that we have to reshape some parts of our business going forward, depending on the world that we face, thinking about the channels which are most impacted out of home ice cream and food service are examples. If we have to reshape those businesses for the longe- term to put them back in a healthy position and to reflect the reality of the sort of future, then that would be done through the normal discipline process on restructuring business proposals.
That would be taken as restructuring, but there's nothing in there in the first half.
Okay. Thank you, David. Right. We've got time for one last quick question. John Ennis at Goldman Sachs, if you can make it one and make it very quick, we can squeeze it in.
Yeah. Hello, good morning, everyone. Thanks for taking it. I'll keep it to one on Latin America. The message on LatAm at the start of the year was quite cautious relative to the flat performance you delivered. I just wondered if you could quickly provide some color on how that region trended through the quarter to get you to that flat performance. That's it from me. Thanks.
Can't hear you, Alan.
I can see Alan. Can't hear you, Alan.
All right, I'll give a headline and then I'll ask Graeme to give a bit more bloody copy. Latin America has been quite a challenging story for us. Pardon me for getting a bit personal on this. Ecuador was where we saw the first Unilever fatality from COVID-19, and Central America got absolutely smashed early on in the outbreak. I've been surprised at the resilience of Brazil and Argentina, where the business has continued to do well. We believe we're gaining competitively. Some of the innovation that we put in place on business model, like B2B route to market is helping us. Mexico, Brazil, Argentina will not be growth markets, I don't think, for the next quarter. I'll hand over to Graeme to give a little bit more detail on that.
John, let me just size Latin America broadly by country for you. Brazil is about 40% of the region for us. Argentina is less than 15 now. Mexico is about 15, similar size, and Chile inside single- digits, high- single digits. That's the size of things. Really, the bit of an epicenter of the crisis in Latin America, four out of the top 10 countries by number of COVID cases are actually in Latin America. It's Brazil, Chile, Peru, and Mexico. You can expect, I think, the peak of cases to be not yet reached. You'd expect to maybe reach that in Q3 or even Q4. Brazil, which in the second quarter for us was down by low- single digits. We expect a very deep and prolonged recession there. Unemployment forecast is to reach 17% GDP - 10%, seeing a lot of devaluation.
A tough situation to manage on the ground there. As Alan said, we have an unbelievably strong business in Brazil, which has actually become stronger through the economic crisis of the last three years. We fundamentally changed our route to market with tremendous work done with our eB2B capabilities called Agora in Brazil. We've also taken a lot of activity through the economic crisis to position the portfolio with Tier 3, Tier 4 brands, et cetera. It's value and recession ready. It is going to be tough, particularly in Brazil, I think, over the course of the second half and beyond, because they're not yet at the peak of the crisis.
Okay, thanks, Graeme. Thanks for the question, John, for keeping it short. We must stop there. I know there's been quite a number of people who haven't been able to get their questions in. Please email the IR team, and we'll arrange a time to talk to you this morning. Please get in touch. Apart from that, thank you very much for listening, and enjoy the rest of the day. Thanks. Bye-bye.