Unilever reports solid growth led by emerging markets for Q1 results

19 Apr 2019 --- Transnational consumer goods company Unilever has announced its results for the first quarter of 2019, which show underlying sales growth of 3.1 percent led by its emerging market business which grew by 5 percent. Commenting on the results, Unilever CEO Alan Jope says: “We have delivered a solid start that keeps us on track for our full-year expectations. Growth was led by emerging markets and was balanced between volume and price.”

Moreover, company turnover decreased by 1.6 percent driven by the disposal of spreads, according to Unilever. Quarterly dividend increased by 6 percent.

“Accelerating growth is our number one priority,” Jope notes. “It requires both great execution and a continued strategic shift into faster growth segments and channels. We saw good performance in key growth channels including out-of-home and e-commerce and benefited from stronger global innovations and faster and more relevant local innovation. The acquisitions we have made since 2015 collectively grew double-digit in the first quarter. With the leadership changes announced in March, we are building the right team to drive our growth agenda.”

“For the full-year, we continue to expect underlying sales growth to be in the lower half of our multi-year 3–5 percent range, an improvement in the underlying operating margin that keeps us on track for the 2020 target and another year of strong free cash flow.”

Unilever estimates that the markets in which it operates are growing by around 3 percent. The emerging markets improved slightly compared with the fourth quarter led by South East Asia and Brazil, says the company. In India, markets grew well, albeit marginally slower than the fourth quarter. High inflation weighed on global market volume growth. Growth remains weak in the developed markets, Unilever notes. 

Foods & Refreshment
Underlying sales in Unilever’s Foods & Refreshment division grew 1.5 percent. Ice cream had a strong start to the year, while sales in tea and savory were flat. Dressings, which were impacted by the continued high promotional intensity and the later timing of Easter, declined.

Unilever’s actions to modernize its portfolio to meet the trends towards authentic, organic and natural, healthy and on-the-go products are working, with good performance on bouillons and snack pots and encouraging early performance of a new range of Knorr protein and fiber-rich soups in Turkey, says the company. Hellmann’s continued to be held back by promotional intensity particularly in the US. Challenges in developed market black tea offset good growth from Pukka, their new organic Lipton range and green tea in India.

Innovation continued to drive strong performance in ice cream helped by the rollout of the Kinder range across Europe, while Magnum was supported by innovations such as a new white chocolate and cookie variant. Sir Kensington’s, Pukka and Weis were all up double-digits, helped by distribution gains, Unilever reports.