Unilever Sales Rise 8.3% in Q3

Operating profit was €1561 million higher, including a higher level of profits on business disposals. These were the disposals of Boursin cheese in the first half year, and the North American laundry and Lawry’s seasonings in the third quarter.

30/10/08 Unilever has reported underlying sales growth was 7.4% in the first nine months with 8.3% in the third quarter. Despite the price increases necessary to offset higher costs, volumes have held up well. Their business in Europe has grown by 2.4% so far this year, with 2.5% in the quarter despite difficult conditions in Western Europe with lower market volumes.

Central and Eastern Europe continued to grow strongly. The Americas grew by 6.5% in the first nine months, including 3.9% in the US which is in line with their markets, and 11.6% in Latin America, ahead of market growth. Growth in the third quarter was 8.2%, boosted by the effect of the IT systems change last year which had reduced growth last quarter.

Growth in Asia Africa was 15.1% in the first nine months with a further acceleration to 15.7% in the third quarter. Volumes continue to grow, up by 3.2% in the third quarter, notwithstanding the price increases taken. Growth remains broad-based by country.

Underlying sales grew by 7.4%. This was largely offset by the strengthening of the euro against most currencies, and the impact of acquisitions and disposals, to leave turnover 0.2% higher.

Operating profit was €1 561 million higher, including a higher level of profits on business disposals. These were the disposal of Boursin cheese in the first half year, and the disposals of North American laundry and Lawry’s seasonings in the third quarter. In total, disposals have generated a pre-tax profit of €1 579 million in the first nine months, compared with €52 million in the same period last year.

“In the first nine months of the year we have delivered over 7% underlying sales growth. We have strengthened the business in a tough environment. Despite the price rises needed in the light of unprecedented cost increases, our volumes are holding up. Our cost savings programmes are far reaching and on-track to deliver. We have been reshaping the portfolio, allowing us to focus our resources where it matters most; behind our brands and our priority categories. All this leaves us well placed for the future. This year we now expect to deliver underlying sales growth well in excess of our long-term target range of 3-5%, together with an underlying improvement in operating margin for the year”, outgoing Group Chief Executive Patrick Cescau said.

Cescau completed the sale of Lawry's in July and the disposal of North American laundry brands two months later. Shareholders in London and Rotterdam this week elected Paul Polman to the board ahead of his appointment to replace Cescau as CEO.