Unilever grows in "challenging" market19 Oct 2016
Unilever has announced its results for the third quarter of 2016, which the company said show that it is growing competitively despite challenging markets with sales growth up 3.2%.
Unilever has announced its results for the third quarter of 2016, which the company said show that it is growing competitively despite challenging markets.For the last nine months, underlying sales growth was 4.2%, ahead of its markets, with price up 2.8% and volume up 1.3%; emerging markets underlying sales growth was 7.2% with price up 5.5% and volume up 1.6%; sales increased by 4.7% at constant exchange rates while turnover, which is at current rates, declined 1.8%.In the third quarter, underlying sales growth was 3.2% with price up 3.6% and volume down (0.4)% against a strong quarter last year; sales increased by 3.4% at constant exchange rates while turnover, which is at current rates, declined 0.1%.“Our business continues to demonstrate its resilience by growing competitively and consistently in tough market conditions,” said CEO Paul Polman. “Underlying sales growth of 4.2% in the first nine months, including over 7% in emerging countries, was ahead of our markets across all four categories. This was driven by strong innovations in support of our category strategies.”“During the third quarter, we have made further progress in reshaping our portfolio, adding businesses in fast-growing segments with the acquisitions of Dollar Shave Club, Blueair and Seventh Generation.“With markets remaining soft and volatile, we have continued to transform our business at an accelerated pace. We are progressing well with the fast implementation of our change programmes: net revenue management, zero-based budgeting and ‘Connected 4 Growth’, making our organisation more agile and responsive to market needs.”“These actions keep us on track for another year of volume growth ahead of our markets, steady improvement in core operating margin and strong cash flow.”Foods sustained its return to growth with what Uniliever said were good performances in savoury, led by cooking products in emerging markets, and dressings, driven by the squeezy packs with proprietary easy-out technology and organic variants.Knorr and Hellmann’s have successfully been updating their ranges with new packaging highlighting the naturalness of their ingredients. Hellmann’s has also broadened its offering with hot and barbecue sauces.In spreads, the rate of decline has slowed in North America but continued in Europe as a result of the market contraction.Ice cream had another strong season, helped as last year by good European weather and strong innovations behind the company’s premium brands. These included the new Magnum Double range, the Ben & Jerry’s ‘Wich sandwich and dairy free range, as well as new variants of Talenti, the premium gelato brand which has grown 60% since acquisition two years ago.In leaf tea, Unilever said it is continuing to build its presence in more premium segments with good growth from T2, green and specialty teas. The company is also introducing Pure Leaf, already well-established in ready-to-drink tea, as a premium brand in its leaf tea portfolio in the US.
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