Overall Sales Growth at Unilever for Q1

20 Apr 2017 --- Unilever has posted its Q1 results which show a solid start to 2017 with projections on track for the rest of the year. Turnover increased 6.1% to €13.3 billion (US$14.3 million), including a positive currency impact of 2.4%, while underlying sales grew 2.9% with price up 3.0% and volume down 0.1%.

Meanwhile in Emerging markets, the underlying sales growth was 6.1% with price up 5.3% and volume up 0.8%.

The Anglo-Dutch consumer goods group said that market conditions remained challenging, however growth in India recovered from the uncertainty experienced due to the removal of the Rs.500 and Rs.1,000 notes in November, while Brazil continued to be adversely impacted by the economic crisis. Meanwhile markets in Europe and North America declined in the first quarter.

In terms of its Food division, Unilever said that although it has been building its presence in emerging markets, underlying sales were flat in the quarter as the category was particularly impacted by a late Easter period. Excluding spreads, underlying sales grew by 1.7%.

A good performance in savory was led by cooking products in emerging markets, driven by the largest brand Knorr responding to key needs such as nutrition deficiency and the increasing demand for time-saving meal makers. Dressings continued to gain market share led by Hellmann’s innovations that highlight the naturalness of the ingredients, but sales were virtually flat against a strong comparator. 

Sales in spreads declined by 5.1% as a result of the market contraction in developed countries which was only partially offset by growth in emerging markets.

Growth in ice cream was helped by strong innovations behind Unilever’s premium brands including the new Magnum pints (chocolate and ice cream in a tub), as well as the coconut and raspberry variants. Ben & Jerry’s grew at double-digit rates, helped by strong performances of the ‘Wich sandwich and the new pint range ‘Topped’ that takes ice cream indulgence to a new level. Unilever has also extended its less than 50 calories offering under Solero and launched vegan and gluten-free variants under Cornetto.

In leaf tea, growth improved further as Lipton is successfully extending its presence in the faster-growing green and matcha segments, while Brooke Bond and T2 had another quarter of strong growth.

Unilever CEO Paul Polman explains how the company has adopted a growth strategy since last fall which is beginning to yield positive results.

“The first quarter shows growth once more ahead of our markets. This reflects our continued investment in both innovations and brand support, and reconfirms the strength of our long term sustainable compounding growth model,” says CEO Paul Polman.

“The change program ‘Connected for Growth’, which we started implementing in the autumn last year, is clearly bearing fruit and is making Unilever more agile and closer to the local markets, unlocking both further growth and margin.

“The actions we are taking keep us on track for another year of underlying sales growth ahead of our markets, in the 3–5% range. We also expect an improvement in underlying operating margin this year of at least 80 basis points and strong cash flow. We are raising the dividend by 12%, reflecting the confidence in our outlook.”