Strong growth in 2011 despite difficult markets
Robust performance in a challenging economic environment
Unilever’s fourth quarter and full-year results for 2011 reflect a robust performance despite the continuing tough economic environment. The company grew ahead of its markets, gained share overall and maintained a good balance of price and volume growth.
Turnover was €11.6 billion in the fourth quarter and €46.5 billion for the full-year
Underlying sales growth* was 6.6% in the fourth quarter and 6.5% for the full-year
Underlying volume growth was 0.1% in the fourth quarter and 1.6% for the full-year
Underlying operating margin was down by 10 basis points** (bps) for the full-year with a reduction in overheads offsetting much of the pressure on gross margins from higher commodity costs.
Core earnings per share were up 4% at €1.41 at year-end with a free cash flow of €3.1 billion. Advertising and promotions spend (A&P) was up €150 million to €6.2 billion.
Commenting on the company’s performance, CEO Paul Polman said: “In 2011 we have made significant progress in the transformation of Unilever to a sustainable growth company despite difficult markets and an unusual number of significant external challenges.
“Our overall performance was driven by our growth in emerging markets and the Home Care and Beauty & Personal Care divisions. We invested heavily in our brands and exit the year with positive momentum. In Foods & Refreshment, whilst price increases have impacted volumes, we have grown in line with our markets and gained share in many of our key businesses.”
Click on the video above to view Paul Polman’s analysis of the results.
Asia Africa CEE: The region continued to grow ahead of the markets in the fourth quarter and achieved positive volume growth despite higher prices, challenging macro-economic conditions in many countries and sustained high levels of competitive activity. We saw strong double digit-growth in South Africa, Indonesia and Vietnam with continuing robust growth from India, Turkey and China. Japan continued to decline after the earthquake in the first half. Central & Eastern Europe growth, whilst better than the start of the year, remains muted.
The Americas: North America delivered 2.1% underlying sales growth in 2011. This reflects both a good performance from Personal Care and the pricing action taken to recover input cost increases, particularly in spreads, in-home ice cream and bar soaps which had an adverse impact on volumes.
Latin America grew 10.8% in 2011 with strong growth from Argentina and Mexico. Whilst growth in Brazil was lower, we saw an improvement in the second half after completing the trade stocks reduction which impacted the first half.
Western Europe: Despite the depressed markets we gained share and continued to invest in our brands. Our six largest markets all delivered positive sales growth in the fourth quarter with notably good performances from France and Italy. Volumes were negatively impacted by the action to increase prices, particularly in spreads.
In conclusion Paul said: “Our overriding priority is to manage our brands for the long term health of the business whilst delivering profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow.”
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*Underlying sales growth is calculated by excluding the effect of acquisitions, disposals and currency movements.
**100 basis points = 1%.
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