Innovation and High Marketing Spending helps Unilever’s Sales

The spending on Innovation and advertising is the key element according to the company. After boosting promotions and introducing new products, Polman was able to raise total sales by 1 %.

06 Aug 2009 In an interview about Unilever’s second quarter and half year results for 2009, CEO Paul Polman says that the sales volume is growing: “…if you look at the quarter two results, you see that the volume is starting to grow - 2%; and it’s quality growth. It's the first time that we’ve seen consistent growth across all regions, including Western Europe.”

He also mentions that pricing has had a slight compromise on the profit margins: `we're reporting a slightly lower margin -60 basis points - over the quarter but it was driven by 50 basis points more in A&P and 30 basis points from dilution from last year, which would suggest that our gross margin actually is up. Our gross margin has continuously improved over the last three quarters now`.

So what is helping Unilever´s sales? The spending on Innovation and advertising is the key element according to the company. After boosting promotions and introducing new products, Polman was able to raise total sales by 1 % to €10.46bn while earnings per share before restructuring costs fell 12 % to Euro 0, 33.

Unilever shares rose 5% to nearly 20 Euros this morning.