Unilever 3Q Sales Beats Hopes On Strong Volume Performance
05 November 2009 - 8:47AM
Dow Jones News
Unilever PLC (UN, UL) beat expectations with its third-quarter
sales performance Thursday as volumes grew strongly for the second
quarter running, and margins edged higher.
The maker of Ben & Jerry's ice cream and household products
such as Dove, Lynx and Cif posted a 2% drop in sales to EUR10.2
billion for its third quarter, after a 1% rise in the previous
quarter. Net profit dropped to EUR1.05 billion from EUR1.64 billion
a year ago, when a number of disposals boosted the bottom line.
Stripping out acquisitions, disposals and currency movements,
second-quarter sales grew 3.4%, after a 4.1% rise in the previous
quarter and ahead of analysts' estimates of 2.7% growth. This
measure of sales is closely watched because it's a directly
comparable measure of how the company's products are selling.
The sales rise was wholly a result of a 3.6% rise in volumes
rather than any price rises, after a 2% volume rise in the previous
three months. New Chief Executive Paul Polman identified volume
growth as his key focus for the group when he joined earlier this
year. The company said all regions and categories showed positive
volumes.
The volume figure compares favorably with rival Procter &
Gamble Co (PG), which saw its volumes fall 3% in its latest
quarter.
"We are on track towards our objective of restoring volume
growth while protecting margins and cash flow for the year as a
whole," said Chief Executive Paul Polman in a statement.
Operating margin was up 0.7 percentage points in the period. The
company said earlier this year its margins would return to growth
in the second half as commodity prices fall.
Polman said there had been good progress across all regions and
the majority of countries and categories, with market shares
responding to strong innovations, greater value and increased
marketing support.
"Market conditions remain challenging and in this environment we
will continue to increase investment behind our brands and build
long-term capabilities in research and development," he said.
The company's shares have grown more than 15% in the year to
date, as CEO Polman's new strategy has borne quick results. They
closed Wednesday at 1829 pence.
-By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278;
michael.carolan@dowjones.com
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