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Unilever reports 5% profit rise

Global food and cosmetics giant the outcome was an important step towards its target of sales of 80 billion euros

Gulf News

The Hague: Fast-moving consumer goods (FMCG) giant Unilever reported on Wednesday that net profit last year rose by 5.0 per cent from the 2011 level to 4.48 billion euros (Dh22.17 billion, $5.96 billion).

Unilever, which achieved sales exceeding 50 billion euros for the first time with a figure of 51.3 billion euros, up 10.5 per cent, said the outcome was an important step towards its target of sales of 80 billion euros.

“There is no room for complacency,” Unilever chief executive Paul Polman nevertheless warned in a statement.

“Markets will remain challenging, with intense competition and volatile commodity costs.”

“We remain focused on achieving another year of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow.”

Unilever’s fourth-quarter sales rose by 7.8 per cent, thanks largely to volume growth of 4.8 per cent, higher than the 6.3 per cent expected on average by analysts interviewed by Dow Jones Newswires

Underlying sales growth in emerging markets was 11.4 per cent, representing 55.0 per cent of the multinational’s global turnover.

“Emerging markets again contributed double-digit growth helping us exceed 50 billion euros turnover, an important milestone in our journey to double the size of Unilever from 40 billion euros to 80 billion euros whilst reducing our environmental impact,” Polman said.

The company saw strongest sales growth in Asia-Africa, where the figures rose by 10.6 per cent, while Americas sales were up 7.9 per cent.

Performance in Europe was “sluggish”, the company said, with sales up 0.8 per cent.

This reflects “the fragile state of consumer confidence and intensely competitive markets,” Unilever said.

Nevertheless, “we have responded to the needs of hard-pressed consumers by providing good quality products at low price points.”

“Throughout 2012 our markets experienced markedly different dynamics as emerging markets grew in both volume and value terms whilst developed market value remained subdued, with volumes lower than prior year,” Unilever said.

The Anglo-Dutch company said that Magnum ice creams and Sunsilk hair products had become “billion-euros brands”, bringing the company’s total of such brands to 14.

“We continued to invest behind our brands, again increasing advertising and promotions spend,” Polman said, with such spending up 470 million euros.

One of the world’s leading suppliers of consumer goods, Unilever owns a wide variety of brands including Knorr, Lipton, Dove and Vaseline. It employs 167,000 workers in 100 countries.