Unilever 1Q Organic Sales +4.8%, Sees Improved 2Q Volumes
07 Mai 2009 - 8:54AM
Dow Jones News
Unilever PLC (UN, UL) posted a 4.8% rise in first-quarter sales
Thursday as price rises offset the effect of lower volumes, and
said it was taking action to arrest its volume declines in the
second quarter.
The maker of Ben & Jerry's ice cream and household products
such as Dove, Lynx and Cif posted a 1% drop in sales from
continuing operations to EUR9.5 billion in the first three months
of the year.
Stripping out acquisitions, disposals and currency movements,
underlying first-quarter sales growth - a keenly watched figure -
was 4.8%, down from 7.3% for the previous quarter and slightly
ahead of analysts' estimates.
"First-quarter results were solid given today's trading
environment," said newly-installed Chief Executive Paul Polman in a
statement.
Polman, a former Nestle SA (NESN.VX) executive, replaced Patrick
Cescau at the turn of the year.
"We have made good progress implementing plans to reignite
volume growth, building on existing strengths and correcting
competitive gaps," he said.
The 4.8% rise in first-quarter sales was purely a result of
price rises - made to offset commodity cost inflation. Volumes in
the period actually fell 1.8%, compared with a 1.6% fall the
previous quarter.
Polman has made tackling the volume decline a key priority this
year.
"We will further step up innovation and brand support from the
second quarter and expect this to drive an improved volume
performance," he said.
In February, the company disappointed the market by scrapping
its sales and profit targets, citing the uncertain economy and said
it would be inappropriate to give an outlook for 2009. It didn't
provide an outlook Thursday.
Unilever previously had a long-term target of growing organic
sales by between 3% and 5% annually and was targeting underlying
operating margin of 15% or above by 2010, compared with 14.6% in
2008.
Operating margin dropped 30 basis points in the period -
slightly less than feared, while gross margin was down 190 basis
points due to higher commodity costs.
Uncertainty surrounding the company's sales and profit prospects
have seen the group's shares decline 23% in the past year.
Net profit for the first quarter dropped 45% to EUR731 million
from EUR1.14 billion. Profit was reduced by restructuring costs,
while last year's figure included profits from businesses since
sold off.
Company Web site: www.unilever.com
-By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278;
michael.carolan@dowjones.com