Unilever Sales Rise on Ice Cream, Emerging-Market Demand -- Update
October 15 2015 - 4:06AM
Dow Jones News
By Saabira Chaudhuri
LONDON--Unilever PLC on Thursday said its third-quarter revenue
rose sharply as sales of ice cream jumped and the company logged
strong growth in emerging markets.
The maker of Magnum ice cream and Dove shampoo reported sales
growth on an underlying basis--which strips out the impact of
acquisitions, disposals and exchange-rate changes--of 5.7% in the
three months to end-September, up sharply from 2.1% growth in the
same period a year earlier.
Unilever said results were helped by an easy comparison with a
year-earlier quarter in which revenue in China was hit when
Unilever had to reduce the volume of products it supplied to big
retailers there after overestimating demand. Better weather helped
drive strong growth in demand for ice cream while price increases
in Latin America also boosted sales.
Unilever said it expects underlying sales growth for the year
toward the upper end of the 2% to 4% range it had previously
disclosed.
Exane BNP Paribas analyst Jeff Stent described quarter as "very
good."
Unilever's exposure to emerging markets--where the Anglo-Dutch
consumer-products giant makes the bulk of its sales--has held it in
good stead for years but recently a slowdown in markets like
Brazil, China and Russia has kept a lid on growth.
The group's third-quarter showed a partial reversal of that
trend, with China's results helped by the easy comparison with the
year earlier. The company also logged stronger growth in Russia and
better volumes in India as well as in Latin America where volume
growth accelerated "despite challenging macroeconomic conditions
and consumer incomes being squeezed by currency devaluation."
On an underlying basis, sales growth in emerging markets
strengthened to 8.4% from 5.6% a year earlier.
In developed markets, underlying sales growth was 2.1%, compared
with a 2.5% decline a year earlier. North America returned to
growth driven by both volume and price, while Unilever also saw
good growth in the U.K., Germany and Central and Eastern
Europe.
Overall revenue climbed 9.4% to EUR13.4 billion ($15.4 billion),
including a positive currency impact of 2.9%. Profit figures
weren't disclosed.
The company has been pushing deeper into personal-care products
like shampoo and deodorants with appeal across different markets,
and away from slower-growing food brands. Personal care revenue
climbed 6.2% on an underlying basis, while revenue from foods rose
1.6% on this basis.
Unilever last year created a prestige division, which sells
high-end cosmetics and personal-care products and currently makes
about EUR400 million in annual sales. Chief Financial Officer
Graeme Pitkethly is targeting raising the unit's sales to EUR1
billion, recently saying Unilever sees a large opportunity in the
fragmented EUR33 billion market for skin and hair care.
In refreshments--essentially the tea and ice cream
businesses--underlying sales jumped 8.5% while in home-care they
rose 6.6%.
Unilever Chief Executive Paul Polman said the company's ice
cream unit performed particularly well in the quarter. Unilever has
muscled deeper into the ice cream business of late, earlier this
month saying it had bought Italian artisan ice cream maker
Grom.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 15, 2015 03:51 ET (07:51 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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