English-Dutch Unilever announced this morning that their first quarter of 2011 has been terrific. Turnover rose 7.0% to 10.9 billion euro, owing to both a bigger sales volume and higher prices. Unilever grew in all their categories and most of their regions. Only Western Europe has witnessed a negative underlying sales growth.
Innovation and introduction
CEO Paul Polman expressed his joy about the excellent results “against a backdrop of rising commodity costs, weak consumer confidence and very competitive markets.” He recognises two key factors in his company’s good results: innovation (of new products) and introduction (of strong brands in new markets).
Now the integration of Sara Lee is “well on track”, Unilever turns to its next target as it hopes to complete the acquisition of Alberto Culber in quarter two. “We continue to focus on the long term development of the business and our priorities remain: profitable volume growth ahead of our markets, steady and sustainable underlying operating margin improvement and strong cash flow”, said Polman.
Double figures in Latin America
Unilever’s strongest region is the (admittedly, not really geographically limited) region of “Africa, Asia and Central- and Eastern Europe”, earning 42% of Unilever’s world total or 4.5 billion euro. Unilever Americas grew to 3.6 billion, while Western Europe reached 2.7 billion. In more detail, Latin-America saw the biggest growth (“double figures”, according to the statement), while Western Europe and CEE “were weaker”.
Deodorants are Unilever’s strongest general product category, while Dove is one of the biggest growing products – especially in Latin America. Magnum’s introduction to the US and Indonesia has been pushing the ice cream department to a huge progress – while soups (like Knorr) had a disappointing quarter due to “the mild winter in Europe”.
Unilever’s statement ended with a warning: as in a number of European countries (including Belgium and the Netherlands) quite a few investigations are made by competition agencies, it is possible that some of those might have a negative effect on Unilever’s yearly results. Still, the statement ensures that all the possible provisions have been made.