Pressure on margins does not keep Unilever down

Pressure on margins does not keep Unilever down

Unilever announced its 2011 results earlier today, stating that “In 2011 we have made significant progress in the transformation of Unilever to a sustainable growth company  despite difficult markets and an unusual number of significant external challenges”, said CEO Paul Polman. Underlying sales growth was 6.5% in the full year 2011, slightly lower than in the fourth quarter (+6.6%).

The group blames the economic insecurity in its main markets and the high prices for raw materials for slowing down its growth (only +0.1% underlying volume growth in the fourth quarter) and lowering its operational margin (-0.1%).

 

All is well - except for Western Europe

Results 4th quarter
2011
Turnover € 11.564 billion € 46.467 billion
Profit (not available) €   6.433 billion

For 2011, prices went up +4.8% to ensure a 6.5% sales growth, the other 1.6% coming from volume growth. Personal care (+8.2%) and Home care (+8.1%) were the best performing categories, while the region “Asia, Africa and CEE” witnessed the biggest sales growth (+10.5%). The Americas were almost equal to the total group growth with +6.3%, while Western Europe came to a near-standstill with +0.7% in sales (but -1.2% in volume).

 

As sales growth in the emerging countries slows down and sales volume even decreases in some of its main markets, Unilever is very cautious about 2012. “We expect the external macro-economic environment to remain difficult in 2012”, says Polman. “Within this challenging context our over-riding priority is to  manage our brands for the long term health of the business whilst delivering: profitable volume growth ahead of  our markets, steady and sustainable core operating margin improvement and strong cash flow. ”

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