Today (25 April), we released our results for the first quarter 2013. We maintained good growth momentum in the quarter despite challenging economies and the tough competitive environment.
First quarter highlights
Underlying sales growth 4.9% with emerging markets up 10.4%
Underlying volume growth 2.2%; pricing up 2.6%
Turnover increased 0.2% to €12.2 billion including a negative currency impact of (3.5)%
Disposals reduced turnover by (1.1)% reflecting the disposal of Skippy and the US Frozen Food business
Quarterly dividend up 10.7% to €0.2690
Growth remained solid in emerging markets despite the continuing macro-economic headwinds, whilst developed markets remained sluggish. In this context we delivered another quarter of good growth led by emerging markets which grew by 10.4% with a good balance between volume and price. Developed markets declined in the quarter against a high prior year comparator.
Commenting on the results, CEO Paul Polman said: “This performance is further evidence that Unilever is becoming fit to win and capable of delivering consistent growth ahead of our markets. Our strategy is working.
“The Unilever Sustainable Living Plan is becoming embedded across the business and increasingly driving our day-to-day decisions and actions, helping to drive increased sales whilst reducing costs and risks. Brands like Lifebuoy, Dove, Domestos, Knorr and Signal that have made sustainability central to their brand proposition continue to perform well.”
Growth in hair care was underpinned by a strong innovation programme and the continued introduction of our brands into new markets. For Dove, the successful Dove Damage Therapy range, the extension of the Dove Men+Care hair range and the launch of Dove hair products in Mexico continued to drive growth. TRESemmé continued to make excellent progress, building on last year’s success in Brazil, and we saw a good early response to the launches in India and Indonesia. Clear continued to make good progress in the highly competitive US market and delivered strong growth in the emerging markets. Toni&Guy is now present in 17 countries and we have successfully launched the Nexxus Youth Renewal range in the United States.
Skin cleansing and care enjoyed good growth driven by innovation across the brands and geographies. Lifebuoy benefited from market development activities to encourage hand washing. Lifebuoy clini-care 10, which offers improved germ protection and skin care, was extended to Indonesia, Ghana and Kenya. Dove performance reflected the continuing success of Dove Nutrium Moisture shower gels and the growth of Dove Men+Care, including the launch of a range of male face products in Europe and North America. Innovations under the Vaseline brand included the Spray & Go moisturizer in North America and a new range of facial washes in South East Asia. In face care, activities include the launch of Pond’s Flawless White BB+ and the extension of Axe to male face care in North America.
Deodorants started the year particularly strongly, powered by the success of the Axe Apollo launch which has been supported by both traditional and digital media in 60 countries and 45 languages. Rexona is making good progress assisted by the ‘Do: More’ campaign which integrates the new Lotus F1 Team variant. Dove remains a key growth driver through the success of Dove Men+Care deodorants and the Dove Maximum Protection range. Despite heightened competition we saw better growth in oral care driven by our strong programme of product innovation. Signal Expert Protection continues to make excellent progress. Close-Up 3 times fresher breath has been rolled out to more than 40 markets and White Now Triple Gold has been launched in China and Europe.
In Foods we continue to position our business for long term growth by enhancing the nutritional value of our products and seeking to improve food security, whilst at the same time strengthening the portfolio through the accelerated divestment of non-core food brands such as Skippy. Savoury and dressings continued to grow in the first quarter, underpinned by innovations such as Knorr jelly bouillon variants, now in more than 35 markets, and baking bags, now in more than 40 markets. In dressings, Hellmann’s growth was driven by market development activities encouraging new uses of mayonnaise and the launch in Europe of a superior squeeze pack. Hellmann’s celebrates its 100th birthday in the United States this year with activities to strengthen the brand’s ‘real mayonnaise’ credentials.
Spreads declined, driven by lower volumes in a tough promotional environment. Market dynamics are not currently in our favour with consumers switching to alternatives. Despite the success of recent innovations such as Flora Buttery and liquid margarines, which have now been launched in Turkey under the Becel brand, we have more to do to communicate the improved taste and health benefits of our margarines to consumers.
Laundry delivered broad-based growth ahead of our markets despite intense competition. This performance reflected our strong innovation programme, including the introduction of improved Brilhante in Brazil, offering superior cleaning and whiteness, the new Surf super-sensorials range and the Philippines launch of Breeze in the ‘Dirt is Good’ position. Fabric conditioners made a good contribution to the growth, helped by the launch of Comfort anti-bacterial in Thailand and the success of the super-sensorial range.
Household care started the year well, growing ahead of the market with strong performances from our dishwash brands in Asia and Europe. The household cleaners brands benefitted from impactful innovations such as the introduction of the Cif easy lift technology for streak-free shine, the launch of Domestos toilet blocks in Turkey and Domestos toilet strips in Central Europe. Both Cif and Domestos were launched in Brazil during the quarter.
Ice cream was up slightly despite a high prior year comparator and the extremely cold weather conditions which prevailed in much of Europe. Magnum, now a €1 billion brand, continued to make good progress supported by the rollout of Magnum Gold?! to the United States, the rollout of the ‘5 kisses’ limited editions and the new pint format in Europe, and the launch of Magnum Pink and Magnum Black in Mexico and Turkey. Cornetto was relaunched in Europe, Mexico and South East Asia and we introduced a new Cornetto mini variant in Europe whilst Fruttare was launched in the United States.
The turnaround in tea which began last year continued with mid-single digit growth in the first quarter. Improved product quality, stronger mixes and improved in-market execution drove this performance. Lipton Yellow Label again drove growth in Russia, benefiting from patented technology to re-incorporate tea essence and deliver improved taste. This innovation was rolled out to Pakistan and the Middle East during the quarter. The Brooke Bond range of brands performed well in India and PG Tips in the UK grew in a strongly promotional market.
Go to the Investor Centre to read the full first quarter 2013 Trading Statement. Download the Unilever Investor Relations iPhone and iPad app(Link opens in a new window) for further information. Find out more on Unilever in the About Us and Brands in Action sections of this website.
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