Blog: Polman speaks up for Unilever's food business
Michelle Russell | 2 February 2012
Unilever CEO Paul Polman was keen to emphasise the robustness of the firm's food business this morning (2 February) after the consumer goods giant reported its annual results for 2011.
Polman told analysts the Anglo-Dutch consumer goods giant was "gaining share overall", while "maintaining reasonable volume growth" despite having taken significant pricing. "We are doing this while defending our profitability and investing in our brands," he said.
Underlying volumes from Unilever's foods division fell 3.9% in the fourth quarter of the year, leading to a 1.2% decrease for the whole of 2011. Sales from the unit were up 4.9% but that was due to the impact of price increases. Volumes from Unilever's refreshment unit - which includes ice cream - fell 3% in the last three months of the year. It was home and personal care and emerging markets - where food only accounts for a minority of sales - that drove Unilever's performance in 2011.
Polman conceded that he would have preferred "a better mix within volume and pricing" from its food division in 2011 but added: "Let's not get carried away, over the last three years this business has grown 3.5%."
He chose to focus on Unilever's spreads business to highlight the company's performance in food and its contribution to group earnings.
"It is a business that generates a significant amount of cash and profit for the company, allowing us to finance expansion in other parts of the business," he told analysts. "Looking forward we are hopeful that 2012 will bring a more stable cost and price environment, allowing us to better adjust the effectiveness of the actions we are taking to run spreads differently. We are in a good position with our focus on taste and health. It sets us up well to win with spreads in the future."
Investec analyst Martin Deboo, however, was less upbeat about Unilever's food prospects. He told just-food he was "struggling to see how it could be a positive volume outlook on food in FY12".
Nonetheless, Polman reiterated his confidence in Unilever's performance, informing analysts that, despite a gloomy economic outlook in North America and Europe, where growth is low, the company is "taking the right actions for group, for the long-term".
Reflecting on the performance of Unilever as a whole, he added: "It is better to make the dust than eat the dust ... we are confident as a company that we are making the dust. I expect certainly another challenging year out there, but we believe we are well prepared on what we need to do to further enhance our competitiveness."
We'll be running a more detailed analysis of the performance of Unilever's food divisions in 2011 - and the prospects for the businesses this year - tomorrow. Keep your eyes peeled.
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