Unilever turnover drops because of exchange rates

Food branches under pressure

Despite the difficult economic circumstances, the underlying sales still pushed forward with a 4.3 % increase. The company
not only managed a 3.2 % turnover increase (with stable exchange rates), but it
also factors in a 1.1 % increase as Unilever brushed aside products with low
margins.

Personal care (with products like Dove, Lux, Rexona and Axe) had an
underlying 7.3 % turnover growth, while home
sanitation products (Omo, Sunlight, Cif, …) chalked down an 8 % increase.
Food (Bertolli, Knorr, …)
and drinks (Lipton, …) were under pressure, with mere 0.3 and 1.1 % increases.

Drop in Europe

The underlying European turnover
dropped 1.1 %, but elsewhere Unilever saw positive evolutions: turnover in the Americas
grew 4.6 %, while Asia and the emerging countries even managed a 7.8 % increase. The latter is becoming increasingly
important and already represents a 20.1 billion euro turnover, on a total of
some 50 billion euro.

CEO Paul Polman recognized
that the growth in the emerging countries
has been lower than in the past, but stated that the relative weakness of the local
currencies is partly to blame, as that resulted in inflation. He has said the inflation increases have not
been put into increased prices for the consumer.

Profit increases
nevertheless

Despite the pressure, Unilever has managed to boost its full year profit another 9 % to 5.263 billion euro and its gross margin rose by 110 base points to 41.2 %, because the company decided to
halt a product range with lower margins. It has also launched a line of innovative products with higher margins
and has managed to lower costs.

Advertising and promotional costs did rise 460
million euro however, as Unilever extended investments because of increased
competition for the consumer. Polman believes that the volatile nature of the
market will remain visible in the next few months and Unilever will be
positioned in
such a way to
handle that.

(Translated by Gary Peeters)