Unilever Reports Strong, Broad-Based Growth in 2012, Food Growth Weak in Q4

Unilever has released its results for the fourth quarter and full year 2012 which show good quality, profitable growth ahead of our markets. Underlying sales growth 7.8% with volume growth of 4.8% and price growth of 2.9%.

24 Jan 2013 --- Commenting on the results, CEO Paul Polman said: “These results have been achieved in tough economic conditions, with volatile commodity costs and in an intensely competitive environment. They reflect the progress made in delivering bigger, better innovations and rolling them out faster, improving our execution in the market place and increased discipline driving savings in all areas of the business.”

“We remain focused on achieving another year of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow.”

Throughout 2012 markets experienced markedly different dynamics as emerging markets grew in both volume and value terms whilst developed market value remained subdued, with volumes lower than prior year.

In this context Unilever delivered another quarter of solid growth. All categories grew, driven by the combination of strong innovations, sharpened in-market execution and the rollout of brands to new markets.

Emerging markets underlying sales growth was 10.8% in the quarter, evenly split between volume and price, taking the full year underlying sales growth to 11.4%. The developed markets grew 4.0% in the quarter and were up 1.6% in the full year.

Foods growth in the quarter was weak, in part due to difficult markets. In spreads Unilever saw a decline in sales although volume shares improved in response to actions we took to ensure that our pricing was competitive. “There is still more to do to drive category growth, for example our successful liquid margarines for use in cooking,” the company reported. During the quarter, Becel Gold was extended to the Nordics and Bertolli Gold was launched in the UK. Dressings continued to perform well despite a step-up in competitive intensity. The company continued to benefit from its campaign to inspire new uses of mayonnaise and we are also seeing the impact of successful digital activities.

Despite sluggish growth in the core savoury business, new product innovations continued to perform well. Knorr jelly bouillon grew strongly driven by new variant launches such as Borsch and White Mushroom in Russia and Herbs and Spices in Austria and Switzerland. Knorr baking bags also grew rapidly and gained share in most markets despite intense competition. The Food Solutions business, serving professional chefs, delivered solid results despite challenging developed markets, underpinned by double digit growth in key emerging markets.

In the Refreshment division, ice cream saw double-digit growth in the quarter, primarily driven by volume. Magnum completed a successful year by passing the €1 billion milestone on the back of Magnum Infinity and the recent launches into new countries such as the Philippines. Cornetto and Max both grew strongly in 2012. Ben & Jerry’s also performed well although we saw intense competition in take home ice cream, particularly in the US.

Beverages growth continued to improve in the quarter with Lipton progressing well, underpinned by the success of teapot bags in Turkey and the relaunch of the brand in Russia. India delivered a strong performance on Brooke Bond with double-digit growth in both the premium and value segments of the market.