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
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. ”