2015 results: consistent profitable growth in volatile markets
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Today, Unilever released its results for the full-year 2015.
- Turnover increased by 10% to €53.3 billion including a positive currency impact of 5.9%
- Underlying sales growth 4.1%, ahead of our markets, with volume up 2.1% and price up 1.9%
- Core operating margin at 14.8% up 30bps
- Free cash flow of €4.8 billion, up €1.7 billion, including €0.8 billion of tax on disposal profits in 2014
- Core earnings per share up 14% at current exchange rates, up 11% at constant exchange rates
We have again grown ahead of our markets despite a challenging year with slower global economic growth, intensifying geopolitical instability, and high currency and commodity volatility.
Comment from CEO Paul Polman
Commenting on the results, Unilever CEO Paul Polman says: “These results further demonstrate the progress we have made in transforming Unilever into a more resilient company, capable of consistently delivering competitive underlying sales growth, margin expansion and strong cash flow.
“This consistency of performance shows that our focus to build our company for the long term is paying off. We are starting to see the results from sharpened category strategies that guide increased investment in our brands, our infrastructure and our people as well as extensions into attractive new markets like Prestige Personal Care.
“We are preparing ourselves for tougher market conditions and high volatility in 2016. Therefore it is vital that we drive agility and cost discipline across our business.”
Our 2015 results are set against the context of challenging market conditions and fragile consumer demand. Many emerging markets continued to be weak, particularly those dependent on oil and other commodity exports and those where currency devaluation is pushing up the cost of living.
Beauty & Personal Care
Growth in Beauty & Personal Care improved from the slower growth of the previous year. This was driven by innovations that grow the core of our brands and extend into more premium segments.
Deodorants benefited from the launch of dry sprays in North America and compressed formats in Latin America. In hair, growth was driven by the Dove Advanced Hair Series roll-out and the launch of Lux Luminique in Japan. The improved Dove body wash formulation, delivering superior care and better sensorial experience, performed well in skin and is now present in over 30 countries. In oral care we have extended the premium toothpaste Zendium to nine markets. We established our Prestige business with the acquisitions of Dermalogica, Murad, Kate Somerville and REN.
Foods & Refreshment
Savoury showed good volume-driven growth led by cooking products in emerging markets and by innovations around naturalness and health. These include Knorr Mealmakers with 100% natural ingredients in Europe and fortified stock cubes which help address iron deficiency in Africa.
In dressings, Hellmann’s demonstrated good growth driven by a strong performance in Latin America and the success of new squeezy packs in Europe and North America. The Baking, Cooking & Spreads unit is repositioning the business to more attractive segments which helped us gain market share in margarine. However sales in spreads continued to decline as we were unable to stem the sustained market contraction in developed countries.
Home Care delivered another year of broad-based growth driven by innovations in higher margin segments, market development and the roll-out of the new Omo with enhanced formulation and improved cleaning technology.
Omo pre-treaters and stain removers have built further market share in Brazil. Fabric conditioners benefited from the success of Comfort intense with double-encapsulated fragrance technology that delivers long-lasting freshness. In household care we continued to scale up by the European roll-out of formulations like Cif’s improved ‘Power and Shine’ sprays for kitchens and bathrooms.
Ice cream delivered strong growth driven by margin-accretive innovations behind premium brands, such as Magnum Pink and Black variants, the Ben & Jerry’s Cores range and new flavours of Breyer’s Gelato. We continue to build our presence in the premium gelato segment with the recently acquired Talenti which grew more than 40% and with Grom which we acquired in October.
In leaf tea we reinvigorated the Lipton brand with an improved mix and new packaging but growth was below our markets. We extended Lipton and PG Tips further into fruit, herbal and speciality teas where we are still under-represented. We are building our presence in the premium segment by opening more T2 stores which we leverage with online sales and by launching machine-compatible tea capsules in Europe.