UK: Unilever food volumes slide in Q3
By Dean Best | 3 November 2011
Unilever has reported a fall in third-quarter volumes from both its main food divisions, as price hikes hit its spreads business and poor weather in Europe affected ice cream sales.
The consumer goods group said volumes from its savoury, dressings and spreads business fell 1% in the three months to the end of September.
Unilever said its savoury business had been driven by demand in emerging markets and the "successful" roll out of recently-launched products into new markets.
However, the company said spreads volumes were "weak" after it upped prices to deal with higher input costs.
The Ben & Jerry's and Cornetto maker said volumes from its ice cream and beverages division were down 0.5%. Unilever said its growth from its ice cream business was "constrained" by "unfavourable European weather in July".
Turnover from both businesses fell but that was in part due to the impact of exchange rates and disposals.
Despite the lower volumes, both businesses reported higher underlying sales due to Unilever's ability to increase prices.
Across the company, underlying volumes increased 1.9% and underlying sales grew 7.8%. Turnover rose 4.9% to EUR12.12bn (US$16.71bn).
CEO Paul Polman emphasised the performance of Unilever's personal care division in the third quarter. "I am pleased to report another good quarterly performance, with particularly strong growth in personal care and the emerging markets, reinforcing our position as the emerging markets consumer goods company," Polman said.
However, he added: "Growth was strong across all categories and helped by technology-based innovation, now routinely rolled out quickly to multiple markets."
Nevertheless, Unilever has lowered its forecast for its margins in 2011 due uncertain consumer demand.
Polman said: "We have sought to mitigate the impact of commodity inflation on consumers by pricing to recover cost rather than to maintain margin. As a result of these factors we now expect underlying operating margin in 2011 to be flat to slightly down."
Shares in Unilever were down 1.88% at GBP20.33 at 10:25 GMT.
Click here for the full statement from Unilever.
Sectors: Condiments, dressings & sauces, Dairy, Financials, Ice cream
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