By Peter Evans
LONDON-- Unilever PLC said it would raise prices in emerging
markets across its range of consumer goods and food products as it
attempts to tackle currency weakness amid falling sales.
The maker of Magnum ice cream and Axe deodorant on Thursday
posted sales of EUR11.40 billion ($15.75 billion) in the quarter
ended March 31, compared with EUR12.16 billion in the same period
last year, a decline of 6.3%.
Like other consumer-products companies, Unilever has suffered
from the devaluation of emerging-market currencies in the past
year, reducing the value of its sales. The company said the
Argentine peso and Russian ruble had been especially weak in the
most recent quarter.
But Unilever Chief Financial Officer Jean-Marc Huët said some of
the impact could be offset by increasing prices in emerging
markets, where consumers are increasingly willing to trade up to
more expensive products in categories such as laundry detergent and
ice cream.
"If you look at our pricing in emerging markets, it's happening
as we speak," Mr. Huët said in an interview, pointing to a 7% rise
in prices across Latin America in the first quarter. "We expect to
take more pricing as the year progresses."
Unilever's underlying sales--which are adjusted for the impact
of exchange rates, acquisitions and disposals--rose 3.6% in the
quarter, slightly beating analysts' expectations of 3.3%. The
company posted growth of 4.9% in the first quarter last year.
Unilever also said it would conduct a strategic review of its
North American pasta-sauce business and Slimfast brand of
weight-loss supplements. Mr. Huët said the review may result in a
sale. Last month, Unilever hired Morgan Stanley to help sell its
Ragú pasta-sauce brand for around $2 billion.
Any divestments would fit in with Chief Executive Paul Polman's
focus on higher-margin personal-care brands that appeal to
consumers in emerging markets, rather than food brands that often
struggle to gain a foothold in countries such as China and
India.
Personal-care products now account for 36% of Unilever's EUR49.8
billion in annual sales, up from around 27% in 2008, the year
before Mr. Polman became CEO.
Mr. Polman has said that he wants to have a stable of 20 brands
with sales of more than EUR1 billion a year by 2020. Unilever
currently has 16 such brands, including Axe deodorant and Lipton
tea, but in recent years it has sold several brands that had little
prospect of reaching the EUR1 billion goal.
Write to Peter Evans at peter.evans@wsj.com
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