Unilever sales rise on higher prices

20 April, 2017, 13:42 | Author: Leticia Walters
  • Paul Polman Unilever CEO

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.

Underlying sales of Home Care and Personal Care increased 3.4 percent.

The maker of Dove soap and Knorr soups said underlying sales rose 2.9 percent in its financial first quarter.

Turnover increased 6.1 per cent to €13.3bn (£11.1bn), and the firm said this included a positive currency impact of 2.4 per cent.

Improved pricing power at both companies provided an early sign of recovery for the food and beverage market after years of deflationary pressure in Europe, slowing sales in China and economic crises in Brazil and Russian Federation.

In London, Unilever shares were trading at 3,983.50 pence, up 1.17 percent. The company also lifted its quarterly dividend, and said it is on track for underlying sales growth in fiscal 2017.

"We're starting to see some inflationary pressures in the United Kingdom from the depreciation of the pound", Chief Financial Officer Graeme Pitkethly said in a phone interview, adding that the company's competitors are also raising prices in the country.

With news that Unilever will sell its spread brands - including Bertolli, Flora, Stork and I Can't Believe it's So Good - the question turns to who will swoop in and take the brands over.

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.

Unilever, which rebuffed a takeover approach by Kraft Heinz (KHC) earlier this year, reported an underlying sales decline of 0.9% in North America, compared with an underlying sales growth of 2.9%.

Unilever also predicted improving profit margins for the rest of the year. Again, price increases gave a boost to the division, with Unilever reporting a 2.2% increase in prices.

Polman added that the company would deliver sales growth in the 3-5% range for the whole year. The quarterly dividend has been raised by 12 percent.

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