Overall Sales Growth at Unilever for Q1

Posted April 20, 2017

The sales gain was due entirely to price increases, with the amount of goods sold falling 0.1 percent.

Unilever announced a 6.1 per cent rise in revenue to €13.3 billion for its first quarter this morning, helped by acquisitions and currency movements in its favour.

Unilever CFO Graeme Pitkethly said on an analyst call that USA consumer spend was down throughout the quarter and noted that tax repayments and some political angst may have contributed to the subdued quarter.

The maker of Dove soap and Knorr soups said underlying sales rose 2.9 percent in its financial first quarter. Nestle also reported a decline in North America sales in the first quarter, although it saw slightly positive pricing. The ice-cream unit was helped by new products such as chocolate-coated Magnum pints in a tub. In 2016, $18.64 billion of total sales of $26.487 billion were in the USA and a further $2.3 billion were derived in Canada. Volumes fell, trimming 0.1 percentage point off Unilever's underlying sales growth.

In leaf tea, growth improved further as Lipton is successfully extending its presence in the faster-growing green and matcha segments, while Brooke Bond and T2 had another quarter of strong growth. "This reflects our continued investment in both innovations and brand support, and reconfirms the strength of our long term sustainable compounding growth model", says CEO Paul Polman.

In a first move toward that, the company raised the quarterly dividend by 12 percent to 36 euro cents a share.

"The change programme "Connected for Growth", which we started implementing in the autumn past year, is starting to bear fruit and is making Unilever more agile and closer to the local markets, unlocking both further growth and margin".

"We also expect an improvement in underlying operating margin this year", he said.

Polman added that the company would deliver sales growth in the 3-5% range for the whole year.