Today, Unilever released its results for the first quarter of 2017.
- Turnover increased 6.1% to €13.3 billion, including a positive currency impact of 2.4%
- Underlying sales growth 2.9% with price up 3.0% and volume down 0.1%
- Emerging markets underlying sales growth 6.1% with price up 5.3% and volume up 0.8%
- Quarterly dividend raised 12% to €0.3585 per share
Comment from CEO Paul Polman
Commenting on the results, CEO Paul Polman says: “The
first quarter shows growth once more ahead of our markets. This reflects
our continued investment in both innovations and brand support, and
reconfirms the strength of our long term sustainable compounding growth
“The change programme ‘Connected for Growth’, which we
started implementing in the autumn last year, is clearly bearing fruit
and is making Unilever more agile and closer to the local markets,
unlocking both further growth and margin.
“The actions we are
taking keep us on track for another year of underlying sales growth
ahead of our markets, in the 3–5% range. We also expect an improvement
in underlying operating margin this year of at least 80 basis points and
strong cash flow. We are raising the dividend by 12%, reflecting the
confidence in our outlook.”
Market conditions remained challenging. In the markets in which we
operate growth was around 2% with negative volumes. Growth in India
recovered from the uncertainty experienced due to the removal of the
Rs.500 and Rs.1,000 notes in November, while Brazil continued to be
adversely impacted by the economic crisis. Markets in Europe and North
America declined in the first quarter.
Personal Care continued to grow the core while
expanding in high-growth segments and building in premium positions.
Oral care had a good start to the year, supported by innovations such as
the new Signal White Now Care Correction teeth whitening range with
blue light technology in France. In skin, Baby Dove was introduced to
the US and UK, and is now present in 14 markets, while the new Lifebuoy
with Activ Silver formula for enhanced germ-protection was rolled out
Continued growth in deodorants was driven by new
variants of dry sprays in North America and Dove deodorants with
improved formulation, making them our most skin-friendly antiperspirant.
In hair, growth was driven by Sunsilk, helped by variants that meet the
needs of Muslim consumers and the expansion into natural propositions
that has driven increased penetration among millennials. Our prestige
business continued to perform in line with our plans.
Home Care delivered good growth despite a strong
comparator, enabled by continued market development and benefit-led
innovations that address emerging needs, including the growing trend
towards natural products. In laundry, growth was driven by strong
performances of the fabric conditioner Comfort in our Asian markets and
the value brand Brilhante in Latin America that caters to hard-pressed
consumers. The roll-out of Surf into Central and Eastern Europe
continued to perform well.
Household care remained a strong growth
contributor to Home Care, driven by the successful roll-out of Domestos
toilet blocks, which have now reached 25 countries. Our acquisitions
have landed well. The air purification brand Blueair grew strongly in
China, while Seventh Generation, the natural proposition, was introduced
to the UK.
Foods continued to modernise the portfolio while
building its presence in emerging markets. However, underlying sales
were flat in the quarter as the category was particularly impacted by
the later Easter. Excluding spreads, underlying sales grew by 1.7%.
good performance in savoury was led by cooking products in emerging
markets, driven by our biggest brand Knorr responding to key needs such
as nutrition deficiency and the increasing demand for time-saving meal
makers. Dressings continued to gain market share led by Hellmann’s
innovations that highlight the naturalness of the ingredients, but sales
were virtually flat against a strong comparator. 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.
Growth in ice cream was helped by strong innovations
behind our premium brands. These included the new Magnum pints that
deliver the ultimate chocolate and ice cream experience in a tub, as
well as the coconut and raspberry variants. Ben & Jerry’s grew at
double-digit rates, helped by strong performances of the ‘Wich sandwich
and the new pint range ‘Topped’ that takes ice cream indulgence to a new
level. We have extended our less than 50 calories offering under Solero
and launched vegan and gluten-free variants under Cornetto.
leaf tea, growth improved further as we are increasingly seeing the
benefits of our innovations in specialty and premium tea segments.
Lipton is successfully extending its presence in the faster-growing
green and matcha segments, while Brooke Bond and T2 had another quarter
of strong growth.