Unilever makes a good start to 2014
Today, we released our results for the first quarter 2014. We delivered good growth ahead of our markets in a continued tough economic and competitive environment.
First quarter highlights
Underlying sales growth 3.6% with emerging markets up 6.6%
Underlying volume growth 1.9% and pricing up 1.6%
Turnover decreased 6.3% to €11.4 billion reflecting a negative currency impact of (8.9)%
Quarterly dividend up 6% to €0.285
Emerging markets grew 6.6%, with good contributions from both volume and price. In developed markets, North America had a slow start to the year whereas Europe held up well. We saw continued strong growth from Home Care, a robust performance in Beauty & Personal Care and an excellent start to the ice cream season in Europe. Foods & Refreshment performance was held back by the timing of Easter and weak markets.
Commenting on the results, CEO Paul Polman said: “We delivered good growth in the first quarter despite slowing markets and a tough competitive environment, further evidence that Unilever is now delivering consistently ahead of our markets.
“Emerging markets are currently passing through a period of slower demand and economic volatility but our strategy remains unchanged. We continue to invest in our brands so that they are well-placed to benefit from the significant longer term growth opportunity that will come from growing populations and higher disposable income.”
Personal Care grew ahead of our markets driven by a strong innovation programme. Deodorants performed well with the successful compressed aerosol format extended to new markets in Europe and the launch of the premium Advanced Care range for Dove in the US. In skin, the performance of Lux has stepped up, underpinned by a major relaunch in China and South East Asia. Dove Nutrium Moisture shower gels also continued to drive growth across our markets. Vaseline Spray & Go made good progress in existing markets and was extended to Australia.
In Hair, the Dove Advanced Hair Series was launched in the US and TRESemmé 7 Day Smooth, which offers salon-smooth hair for up to three washes, was introduced in the UK and the US. We also launched dry shampoos under the Elidor brand in Turkey. Capitalising on the growth of male Personal Care products, in oral we launched Signal White Now Men, our first toothpaste specifically designed for men.
Foods & Refreshment
The decline in Foods & Refreshment was largely explained by the later timing of Easter in 2014. We continued to see evidence that we are taking the right actions to deliver consistent growth ahead of our markets.
Despite the successful launches of great-tasting products like Rama with Butter in Germany, the decline of the margarine market remained a drag on our spreads growth but we are now gaining market share in margarine in both Europe and North America. Knorr cooking products did well and the successful jelly format was extended into seasonings through the introduction of Knorr Flavour Pots in the UK. Dressings’ performance was stable as Hellmann’s lapped the 100 year anniversary in the United States.
Underlying sales growth was broad-based and volume-led, with a significant impact from our new product launches. In laundry, the new concentrated Small & Mighty liquid detergents with improved formulation and innovative packaging are now present in seven markets and a new ‘Eco’ refill pack has been introduced. In France, we launched Skip multi-action capsules, combining both liquid and powder technology in a single unit dose format to provide enhanced stain removal. Comfort Aromatherapy super-sensorials was extended into South Africa and Turkey.
Household cleaning growth outpaced the market. During the quarter we launched Cif direct application floor cleaner in Europe and Sun Ultimate, our best ever all-in-one dishwash tablets, in France. After successfully launching Domestos Turbo Fresh rotating rim blocks last year, we rolled them out to new countries in Europe. We saw continued good momentum from the recently launched Domestos and Cif in Brazil.
Strong growth in Refreshment was driven by ice cream in Brazil and Australia coupled with a very good start to the ice cream season in Europe. The ice cream innovation programme for 2014 includes products celebrating Magnum’s 25th birthday, Klondike Kandy bars and Breyers Gelato in the US, a new Carte D’Or Artisanal range in Europe and Cornetto with double topping and new flavours in China.
Tea growth accelerated in the US, helped by the success of Lipton K-Cups®. We also saw good growth in the UK as PG Tips launched a range of fruit, herbal and green teas. Elsewhere we saw good growth in South Asia, Egypt and Arabia but weaker sales in Russia and Poland. The decline of AdeS soy drinks reduced as we reached the anniversary of the product recall last year.
Go to the Investor Centre to read the full first quarter 2014 Trading Statement.
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