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Competitive growth in weaker markets


Average read time: 5 minutes

London/Rotterdam - Today, Unilever released a trading statement for the third quarter of 2014.

Unilever logo building

Nine months highlights

  • Underlying sales growth 3.2% with emerging markets up 6.2%
  • Underlying volume growth 1.4% ahead of our markets and pricing up 1.8%
  • Turnover declined 4.3% to €36.3 billion including a negative currency impact of 6.6%

Third quarter highlights

  • Underlying sales growth 2.1%
  • Underlying volume growth 0.3% and pricing up 1.8%
  • Turnover declined 2.0% to €12.2 billion including a negative currency impact of 2.6%
  • Acquisitions & disposals reduced turnover by 1.5%

Commenting on the results Unilever CEO Paul Polman says: “We continued to invest behind our brands and innovations so that we are well-positioned for the long term growth opportunities which remain fully intact. We expect markets to remain tough for at least the remainder of the year. We have further accelerated our initiatives to remove unnecessary cost, simplify the business and ensure that Unilever is both agile and resilient.

“We are confident that we will achieve another year of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow."

Our markets

Market growth continued to slow in the third quarter as macro-economic pressures affected consumer demand. Emerging market growth remained weak with flat volumes. Within this there was a sharp slow-down in China. We are now seeing early signs of improvement in North America as the impact of the economic recovery starts to be felt by consumers. Europe declined in both volume and price with the impact of the poor summer weather on the ice cream category.

Unilever performance

Against this background we continued to grow ahead of our markets, both in volume and value. Underlying sales growth in emerging markets slowed to 5.6% whilst developed markets declined in the quarter by 2.5%. We saw good performances from Home Care and Beauty & Personal Care but Foods & Refreshment continued to decline due to spreads.

In China the impact of the sharp market slow-down has led to trade de-stocking across the distribution channels. This resulted in a decline in our underlying sales of around 20%.

Beauty & Personal Care

Beauty & Personal Care growth slowed in the third quarter, in part due to slower markets and in part due to the conditions in China mentioned above. Deodorants benefited from a strong performance of Dove, the launch of Rexona Anti-bacterial Protection in Latin America and the success of the compressed aerosol range in Europe. Skin cleansing saw continued strong growth for Lifebuoy and the improved Dove Nutrium Moisture body wash performed well. Lux continued to benefit from the improved product range and new brand communication.

In hair, the Dove Advanced Hair series is building a premium offering with the introduction of the Oxygen Moisture range in Europe. Sunsilk is growing well and Clear benefited from a successful launch in Japan. REGENERATE Enamel Science, our new oral brand which is the first toothpaste and serum system that regenerates the enamel surface with a layer of minerals that have the same chemical composition as natural enamel, is progressing well in the United Kingdom.

Foods & Refreshment

In Foods & Refreshment we saw growth in savoury and dressings but this was insufficient to offset the continued decline in spreads.

Knorr delivered a strong programme of innovation with the launch of stock cubes fortified with vitamins in South East Asia and a new range in Argentina designed for locally relevant dishes. We launched a new range of Knorr mealmakers in Thailand and introduced a new range of ready-to-heat soups made with natural ingredients and sustainably-sourced vegetables in Germany. Dressings continued to grow despite slowing markets helped by the successful launch of Hellmann’s in the Netherlands and the re-launch of Calve in Italy.

Spreads faced strong headwinds from the decline of the margarine market and price deflation in a weak commodity costs environment. We gained significant market share in margarine but this was not sufficient to offset the overall decline of the category. We continued to launch products with a blend of vegetable oils and butter such as Gold from Flora with more than 10 product introductions completed in Europe in less than twelve months.


After a strong start to the year, ice cream was held back by poorer European summer weather. Despite the headwinds, innovations such as Breyer’s Gelato, Ben & Jerry’s Cores, the Cornetto re-launch, Magnum’s 25th anniversary together with strong execution in key markets like Turkey enabled the category to deliver positive growth.

In tea, Lipton grew in the United States helped by the success of K-Cups® and the liquid concentrate innovation. New Lipton Earl Grey with a ‘freshly picked’ taste has been launched in Europe and PG Tips fruit and green teas are off to a good start in the United Kingdom.

Home Care

Laundry saw good growth, balanced between price and volume, in competitive markets. A range of stain removers and pre-treaters was successfully launched under the Omo brand in Brazil and Surf was re-launched with improved fragrance in South East Asia and Australasia. Small & Mighty concentrated liquids remain a key growth driver and fabric conditioners benefited from the continued growth of Comfort Aromatherapy super-sensorials.

Household cleaning growth continued to outpace the market driven by strong double-digit performances from Domestos and dishwash, helped by innovations such as Sunlight Nature in South East Asia. In the United Kingdom, Cif sprays were re-launched with improved ‘Power and Shine’ formulations.

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