Unilever reports strong, broad-based growth in 2012
Today (23 January), Unilever released its results for the fourth quarter and full year 2012 which show good quality, profitable growth ahead of our markets. This underscores the good progress we are making in transforming Unilever into to a sustainable growth company.
Full year highlights
Turnover increased by 10.5% to €51.3 billion with a positive impact from foreign exchange of 2.2% and acquisitions net of disposals of 1.1%
Underlying sales growth 6.9% comprising volume growth of 3.4% and price growth of 3.3%
Emerging markets underlying sales growth 11.4% now representing 55% of turnover
Core operating margin up 30bps to 13.8%; gross margin up 10bps, advertising and promotions up €470 million at constant exchange rates
Core earnings per share increased by 11% to €1.57; free cash flow of €4.3 billion
Fourth quarter highlights
Underlying sales growth 7.8% with volume growth of 4.8% and price growth of 2.9%.
Commenting on the results, CEO Paul Polman said: “These results have been achieved in tough economic conditions, with volatile commodity costs and in an intensely competitive environment. They reflect the progress made in delivering bigger, better innovations and rolling them out faster, improving our execution in the market place and increased discipline driving savings in all areas of the business.
“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.”
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.
In this context Unilever delivered another quarter of solid growth. All of our categories grew, driven by the combination of strong innovations, sharpened in-market execution and the rollout of our brands to new markets.
Emerging markets underlying sales growth was 10.8% in the quarter, evenly split between volume and price, taking the full year underlying sales growth to 11.4%. The developed markets grew 4.0% in the quarter and were up 1.6% in the full year.
Hair finished the year with a strong quarter of double-digit growth. Tresemmé had an excellent quarter, reflecting strength in Brazil and the impact of the recent launches in Indonesia and India. Dove Hair benefited from the continuing success of Dove Damage Therapy. Clear also grew strongly, completing a good first year in the highly competitive US market. Sunsilk became a €1 billion brand driven by the growth of the core business coupled with the success of recent innovations such as the natural oils range.
Skin performance reflected the success of innovations across the portfolio. Dove Nutrium Moisture continues to drive growth in body wash and the Dove Purely Pampering range, successful in skin cleansing, is now being extended to hand & body. Dove Men+Care continued to build sales and was extended to male face care in the UK.
Lifebuoy had another strong quarter reflecting good progress on the core products, the success of Lifebuoy Clini-Care 10 and the recent launch of colour-changing germ protection hand wash in Indonesia and India. The broad-based growth of the Lux brand in emerging markets reflected the successful relaunch with improved product quality, winning fine fragrances and strong advertising. The acquired Kalina brands continued to make good progress in Russia.
Deodorants growth reflected a good performance from Rexona with the notable success of Maximum Protection in Latin America and the extension of the MotionSense technology to North America. Dove deodorant was underpinned by a strong innovation programme and the rollout of Dove Men+Care. Competitive intensity in oral was high but Signal Expert Protection continued to do well and we launched White Now Gold in France and Italy.
Foods growth in the quarter was weak, in part due to difficult markets. In spreads we saw a decline in sales although volume shares improved in response to actions we took to ensure that our pricing was competitive.
There is still more to do to drive category growth, for example our successful liquid margarines for use in cooking. During the quarter, Becel Gold was extended to the Nordics and Bertolli Gold was launched in the UK. Dressings continued to perform well despite a step-up in competitive intensity. We continued to benefit from our campaign to inspire new uses of mayonnaise and we are also seeing the impact of successful digital activities.
Despite sluggish growth in the core savoury business, new product innovations continued to perform well. Knorr jelly bouillon grew strongly driven by new variant launches such as Borsch and White Mushroom in Russia and Herbs and Spices in Austria and Switzerland. Knorr baking bags also grew rapidly and gained share in most markets despite intense competition. Our Food Solutions business, serving professional chefs, delivered solid results despite challenging developed markets, underpinned by double digit growth in key emerging markets.
Ice cream saw double-digit growth in the quarter, primarily driven by volume. Magnum completed a successful year by passing the €1 billion milestone on the back of Magnum Infinity and the recent launches into new countries such as the Philippines. Cornetto and Max both grew strongly in 2012. Ben & Jerry’s also performed well although we saw intense competition in take home ice cream, particularly in the US.
Beverages growth continued to improve in the quarter with Lipton progressing well, underpinned by the success of teapot bags in Turkey and the relaunch of the brand in Russia. India delivered a strong performance on Brooke Bond with double-digit growth in both the premium and value segments of the market.
Fabrics cleaning grew ahead of our markets, reflecting the continuing success of Omo, relaunched to deliver faster stain removal, and the rapid growth of liquids across our brands and countries. Fabric conditioners also performed well driven largely by the new concentrated products and super-sensorial variants.
Household care growth continued to reflect strong performances by Sunlight hand dishwash and Domestos. Cif performance also improved driven for example by a strong innovation programme in Argentina and the success of the new Cif sprays and wipes with new Easy Lift technology in the UK.
Go to the Investor Centre to read the full fourth quarter and full year 2012 results announcement. Download the Unilever Investor Relations iPhone and iPad app for further information. Find out more on Unilever in the About Us and Brands in Action sections of this website.
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