Unilever profits from emerging markets boost | RetailDetail

Unilever profits from emerging markets boost

In line with earlier quarters, Unilever has again announced decent company results. The British-Dutch company was “pleased” with the quarterly results, but warns that margins for the whole year are under pressure. Unilever also announced its next target group: wealthy Brazilian women.

12.1 billion euro turnover in Q3

Unilever's third quarter turnover rose 7.8% to 12.1 billion euro, but most of the growth is caused by higher prices (+5.8%) – with volume growing only 1.9%. “The results are especially encouraging against the backdrop of very uncertain consumer demand and hugely volatile commodity markets”, CEO Paul Polman said.

 

Turnover growth was particularly significant in 'emerging markets' (+13.1%), while in Western Europe lower volumes meant turnover dropped 0.5% - Unilever specifically blames the terrible European summer and its repercussions on ice cream sales. Both other regions, the Americas (+9.1% to 4.02 billion euro) and Asia, Africa and CEE (+12.4% to 4.88 billion) are now significantly larger than Western Europe's 3.22 billion euro turnover. Personal care was the fastest growing of the four Unilever 'categories' (+11.3% to 4.11 billion euro).

Margins under pressure

However, not all news is good: rising raw material prices mean a greater pressure on Unilever's margins. “We have sought to mitigate the impact of commodity inflation on consumers by pricing to recover cost rather than to maintain margin. As a result of these factors we now expect underlying operating margin in 2011 to be flat to slightly down”, Polman warned.

Unilever's new focus area is Brazil, where it has launched 80 new shampoos and conditioners on the market of middle class women – who spent 8.2 billion euro on cosmetics last year. The company also bought cosmetics producer Kalina to invade the Russian market as well.

In line with earlier quarters, Unilever has again announced decent company results. The British-Dutch company was “pleased” with the quarterly results, but warns that margins for the whole year are under pressure. Unilever also announced its next target group: wealthy Brazilian women.

12.1 billion euro turnover in Q3

Unilever's third quarter turnover rose 7.8% to 12.1 billion euro, but most of the growth is caused by higher prices (+5.8%) – with volume growing only 1.9%. “The results are especially encouraging against the backdrop of very uncertain consumer demand and hugely volatile commodity markets”, CEO Paul Polman said.

 

Turnover growth was particularly significant in 'emerging markets' (+13.1%), while in Western Europe lower volumes meant turnover dropped 0.5% - Unilever specifically blames the terrible European summer and its repercussions on ice cream sales. Both other regions, the Americas (+9.1% to 4.02 billion euro) and Asia, Africa and CEE (+12.4% to 4.88 billion) are now significantly larger than Western Europe's 3.22 billion euro turnover. Personal care was the fastest growing of the four Unilever 'categories' (+11.3% to 4.11 billion euro).

Margins under pressure

However, not all news is good: rising raw material prices mean a greater pressure on Unilever's margins. “We have sought to mitigate the impact of commodity inflation on consumers by pricing to recover cost rather than to maintain margin. As a result of these factors we now expect underlying operating margin in 2011 to be flat to slightly down”, Polman warned.

Unilever's new focus area is Brazil, where it has launched 80 new shampoos and conditioners on the market of middle class women – who spent 8.2 billion euro on cosmetics last year. The company also bought cosmetics producer Kalina to invade the Russian market as well.

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