Unilever Sales Rise, But Cautions On Prices
03 Februar 2011 - 8:52AM
Dow Jones News
Unilever PLC (UN, UL), the world's third-largest maker of
branded household products, Thursday posted a rise in
fourth-quarter sales driven by volume gains in emerging markets,
but cautioned that commodity prices are putting pressure on its
margins.
The Anglo-Dutch maker of Ben & Jerry's ice cream, Knorr soup
and Bertolli olive oil spreads and household products such as Dove,
Lynx and Cif said fourth-quarter underlying sales--which strip out
acquisitions, disposals and currency movements--grew 5.1%
year-on-year.
This measure of sales, which compares with growth of 1.8% in the
same period last year and a 3.6% rise in the previous three months,
is closely watched as a directly comparable measure of how the
company's products are selling.
Total sales in the quarter rose 12% to EUR10.82 billion compared
with a year earlier, while net profit increased 15% to EUR1.04
billion. In the full-year, net profit increased 26% to EUR4.6
billion.
However, Unilever's underlying operating margin in the quarter
was down 20 basis points, hit by increased costs as prices for
commodities such as palm oil, soy beans and corn are continuing to
rise.
Unilever--which sells goods in 170 countries and competes with
U.S.-based market leader Procter & Gamble Co. (PG) and
Switzerland's Nestle SA (NESN.VX)--is facing rising commodity costs
and a challenging consumer outlook in its mature economies, where
discretionary income is under pressure from austerity measures such
as tax hikes and public spending cuts as governments rein in
borrowing.
Last week, U.S. rival P&G stuck by its financial targets,
but said its commodities bill will cost $1 billion for the fiscal
year that ends in June, more than double what it had expected.
Unilever is stepping up its investment to build its brands in
Asia, Africa and the Middle East in the face of intensified
competition.
Group underlying volumes in the quarter rose 5.1%, up from 5%
growth recorded in the same period last year and a 4.8% increase in
the third quarter.
Unilever reiterated its guidance of profitable volume growth,
steady and sustainable underlying operating margin improvement and
strong cash flow.
Unilever shares closed Wednesday at 1857 pence, valuing the
company at GBP52.28 billion.
By Simon Zekaria, Dow Jones Newswires; +44 207 842-9410;
simon.zekaria@dowjones.com
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