Unilever today (8 May) posted underlying sales growth of 7.2% after raising selling prices to recover higher costs.
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In the three months to March, Unilever posted sales of EUR9.75bn (US$15bn). Unilever’s guidance for the full year is sales growth of between 3% and 5%, at constant exchange rates.
The company said it had increased prices passing on higher commodity costs. The price hikes contributed 4.8% of the sales increase.
Commodity costs had increased by 4.2%, or EUR400m in all, Unilever said. The company added that the rate of increase “accelerated further in the quarter”. Unilever said it was making savings and switching raw materials in an effort to mitigate price hikes.
Operating profit, meanwhile, was up 39% to EUR1.8bn. Profits were boosted by disposals in the quarter, including the sale of the Boursin cheese business. Excluding the impact of one-off gains, profits were up 2.4% to EUR1.4bn.
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By GlobalDataThe Anglo-Dutch consumer group also booked an underlying improvement in its operating margin of 30 basis points.
“We continue to invest behind our brands, while taking the necessary pricing action to recover a sharp increase in commodity costs. We have a strong innovation programme for 2008, with many important initiatives already in the market,” CEO Patrick Cescau said.
The maker of Flora spreads and Hellmann’s mayonnaise said it is well placed to improve operating margins and deliver competitive growth during the remainder of the year.
