Polman was typically cautious despite Unilevers strong Q1

Polman was typically cautious despite Unilever's strong Q1

Unilever chief executive Paul Polman today (29 April) warned investors "not to run ahead of yourselves" despite the consumer goods group seeing sales and volumes accelerate in the first quarter of 2010.

Adopting a typically cautious tone, Polman told analysts that the economic climate remained challenging, particularly in developed markets like the UK where, the Dutchman said, public sector and personal debt remained high.

"In the UK, I use the phrase 'green sprouts' as I'm not convinced there are 'green shoots'," Polman said. "We continue to believe that the recovery will be long and drawn out."

Unilever, the maker of food brands from Knorr soup to Magnum ice cream, saw growth in underlying sales and volumes accelerate in the first three months of the year.

Underlying sales, which excludes the effect of foreign exchange and M&A, grew 4.1% in the first three months to 2010.

Underlying sales in Unilever's Asia/Africa unit were up 7.6%, thanks to growth in China, Turkey and Indonesia.

Underlying volumes accelerated to rise 7.6%, compared to the 5% increase in the last three months of 2009.

Growth in Western Europe was slower, although Unilever said it had gained market share in volume and value terms. Volumes were up 4% thanks to products such as Magnum Gold ice cream and Knorr Stock Pot. Underlying sales inched up 0.2%.

However, Polman reaffirmed his belief that any recovery in regions like Western Europe would be slow and pointed to the prospect of intense competition and higher commodity costs.

"In developed markets, there's a tremendous amount of deleveraging that needs to go on. In developing & emerging markets, I see more robust growth but it's a lower level than we saw before 2007," Polman said.

"We don't expect the environment to get any better and we will see an increase in competition as the year progresses. We shouldn't run ahead of ourselves."

Nevertheless, Unilever's shares had a buoyant day. The stock was up 3.8% at 1989p at 15:48 BST this afternoon.