Unilever Sales Up 4.8% in Q1

All categories grew, with the top 13 ‘billion euro’ brands showing faster pick-up, being among the first to benefit from the increased customer and consumer focus.

11/05/09 Unilever has reported underlying sales growth of 4.8% in Q1 with 6.8% coming from carry-over pricing and volumes lower by 1.8%. Turnover was 0.7% below last year including currency movements (-2.0%) and disposals/acquisitions (-3.3%). All categories grew, with the top 13 ‘billion euro’ brands showing faster pick-up, being among the first to benefit from the increased customer and consumer focus.

Paul Polman, Chief Executive Officer said: “First quarter results were solid given today’s trading environment, with growth of 4.8% and underlying margins maintained, before dilution from disposals. We have made good progress implementing plans to reignite volume growth, building on existing strengths and correcting competitive gaps. We will further step up innovation and brand support from the second quarter and expect this to drive an improved volume performance. This will be achieved while protecting cash and margins for the year.”

Asia Africa CEE was up + 9.5% with underlying sales growth was again broad-based across all major developing and emerging countries. Despite the strong price increases taken last year, and slowing economies, consumption of the company’s categories has continued to grow in both volume and value. There was further trade de-stocking in the quarter in a number of countries.

The Americas grew by + 7.2% as underlying sales continued to grow strongly with volumes improved quarter to quarter through most of the region. In the US underlying sales grew 3.8% and the company consumer business returned to positive volume growth. US foodservice was down mainly due to the exit from unbranded business. Operations in Latin America have performed well with growth of 11% despite weakening economies.

Western Europe was down -2.8% with market growth more affected by the global economic downturn than the rest of the world, and slowed further. There has been some down-trading to private label brands, the company reported. As a result Unilever said they are stepping up on innovation, for example with the roll-out of new Dove products such as ‘hair minimising’ deodorant and damage repair shampoo, and strengthening support levels.

By category Savoury, dressings and spreads reported underlying sales growth of + 2.9%, with good performances for the Knorr savoury brand in most countries. In Germany we have lost share and are now refocusing on the core of the brand to improve our competitive position. We have been introducing Knorr stock-pots throughout Europe. In the US we are capitalising on more in-home eating with Bertolli frozen meals, ‘feed your kids well’ advertising for Ragú pasta sauces and encouraging the use of Hellmann’s mayonnaise in sandwich making. Strong growth for Hellmann’s globally is driven by the roll-out of the new ‘light’ version with citrus fibre and by ‘goodness of mayonnaise’ activities featuring natural ingredients. Volumes of margarine have been affected by falling butter prices and competition from private label. Unilever’s ‘goodness of margarine’ campaign has started to deliver good results and is being rolled out further.

Ice cream and beverages reported Underlying sales growth of + 4.3%. The company have seen good growth in their indulgence ice cream brands – Magnum, benefiting from the recent ‘temptation’ and ‘minis’ ranges, and Ben & Jerry’s. There was continued double-digit growth in developing and emerging markets, including a particularly strong performance in Brazil, while sales in Western Europe were maintained at around last year’s level. In the US, consumption of ice cream is up, but private labels have gained some share at the expense of brands. Good growth in tea underlines the strength of the Lipton brand, with sales over €3 billion including those made by the Pepsi/Lipton joint venture. “We continue to drive the move to more added value products with the roll-out of Lipton pyramid fruit tea and infusion ranges, and Lipton Linea slimming teas are building well,” the company reported.