LONDON – Unilever announced its results for the first quarter of 2018, with underlying sales growth of 3.7% which show good volume-driven performance across all its three divisions.
According to the company, the Underlying Sales Growth (USG) excluding spreads was 3.7% with an encouraging shift to volume-led growth compared to the prior year.
Across all Divisions, this was driven by strong innovation and market development. Turnover decreased 5.2% to €12.6 billion, which included an adverse currency impact of (9.8) % and 1.5% from acquisitions net of disposals.
Emerging markets grew by 5.1% with a strong contribution from volume, while price growth was modest in a lower inflation environment.
“The first quarter demonstrates another good volume-driven performance across all three Divisions.
The broad-based growth, including over 4% volume growth in emerging markets, shows that the ‘Connected 4 Growth’ programme is working and enhancing our long-term compounding growth model.
We are further improving the quality and speed of our global and local innovation as a result of a more agile, consumer-facing organisation.
At the same time, we are maintaining strong delivery from our savings programmes and expecting to complete the exit from spreads in the middle of the year,” commented CEO Paul Polman on the results.
Beauty & Personal Care grew the core with strong innovations behind purpose-led global and local brands, while expanding the portfolio in attractive segments and channels.
This led to good volume growth in the first quarter, continuing the improved momentum from Q4 2017.
Skin cleansing delivered strong growth helped by new premium formats.
These included aerosol mousse which delivers an improved sensorial experience and was launched across five brands in Europe, and the launch of Dove body polish in North America which exfoliates and nourishes at the same time.
Skin care performed well driven by Vaseline’s successful market development campaign, Dove Nourishing Secrets, a naturals-inspired hand and body range, and the therapeutic Dove Derma Series in the US.
Home Care increased its strong emerging market footprint with its proven market development model and benefit-led innovations.
Growth in laundry was driven by successfully expanding our core brands in new, fast-growing segments, such as natural products with the premium Omo Naturals range in China.
Household care remained a strong growth contributor to Home Care.
This was helped by continued double-digit growth of Domestos toilet blocks and Cif creams, as well as the launch of Sunlight dishwash in Indonesia with improved formulation that allows 5x faster degreasing, and Cif premium sprays, with specialist care and cleaning, in Europe.
The Foods & Refreshment Division continued to build its presence in emerging markets and sustained a strong performance in food service channels.
At the same time, they further modernised the portfolio by responding to consumer needs in fast-growing segments such as ‘free-from’, vegan, health and wellness.
Innovations behind the premium ice cream brands contributed to another good start to the year.
In foods, Knorr delivered another quarter of growth above the Group average, primarily driven by cooking products in emerging markets, as well as innovations in developed markets.
These included the launch of Knorr mini meals in Europe, snack products with natural and nutritious ingredients, and Knorr Selects side dishes in the US. Hellmann’s continued to communicate its strong natural claims while further extending its range with the launch of avocado and sunflower oil variants with Omega 3 and Vitamin E in the US.
Volume growth improved; however pricing turned negative in an increased promotional environment.
“For the full year, we continue to expect underlying sales growth in the 3%–5% range and an improvement in underlying operating margin and cash flow that keep us on track for our 2020 goals.
We intend to start a share buy-back programme of up to €6 billion in May to return the expected after-tax proceeds from the spreads disposal.
We are raising the dividend by 8%, reflecting confidence in our outlook.”