UK/NETHERLANDS: Spreads market challenge but ice cream joy for Unilever
Unilever said "declining" spreads market was hitting its growth in category
Buoyant ice cream sales cheered Unilever in its first quarter, although the group admitted declining spreads markets was limiting its growth in that category.
The Magnum maker said a "very good start to the ice cream season in Europe" had contributed to a 5.9% rise in underlying sales from its refreshments division in the three months to the end of March.
Sales from Unilever's food business were lower year-on-year. The company said the 1.7% fall in underlying food sales could be "largely explained" by the later Easter this year.
However, the Flora owner revealed continued challenges in the spreads sector. Although Unilever insisted it was gaining share in the margarine sectors in North America and Europe, it said the "decline" of the market was a "drag on our spreads growth".
The company said its Knorr cooking products "did well", while the performance of its dressings business was "stable".
Turnover from Unilever's food arm reached EUR3bn (US$4.15bn). The 1.7% drop in underlying sales came amid a 2% fall in underlying volumes.
Revenue from Unilever's refreshments arm hit EUR2.1bn. Unilever's refreshments business also includes its tea brands, which enjoyed growth in markets including the UK and the US.
On a group-wide basis, underlying sales were up 3.6%. Turnover decreased 6.3% to EUR11.4bn thanks to the impact of exchange rates.
Alongside the results, Unilever confirmed it is reviewing its options over the future of its Slim.Fast and North America pasta sauces businesses.
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