Unilever defies gloom with strong growth

City A.M. Reporter
STRONG emerging markets helped consumer goods giant Unilever avoid issuing similar profit warnings to two of its main rivals yesterday, although it did warn of tougher times ahead due to difficult economies and volatile input costs.

The maker of brands such as Dove and <a href="http://www.knorr.co.uk"; target="_blank">Knorr</a> is facing tough trading in southern Europe and is seeing some commodities costs edge up. However, it stuck to its 2012 targets rather than alarm investors like rivals Danone and Procter & Gamble.

Unilever, with annual revenues of €46.5bn (£36.4bn), said second-quarter underlying sales rose 5.8 per cent helped by its lower exposure to problem economies, such as Spain, than Danone, while it has more business in fast-growing markets like India and Indonesia than P&G.

This beat a company-compiled consensus of 4.8 per cent and came after a first-quarter increase of 8.4 per cent and 6.5 per cent growth for 2011. Emerging markets, which make up 55 per cent of sales, saw growth of 11 per cent.

“The macro economic situation is difficult and shows signs of further deterioration and there is volatility in commodities, but we still expect to deliver a modest improvement in operating margins for 2012,” finance director Jean-Marc Huet said yesterday.
European sales fell 2.2 per cent in the quarter, but Huet said Eurozone crisis-hit southern European economies accounted for less than four per cent of group sales. These were slightly offset by good performances in Britain, Germany, France and the Netherlands.