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February 17, 2010

CAGNY: Unilever hails “unrivalled strength” in emerging markets

Anglo-Dutch consumer giant Unilever aims to capitalise on its growth in developing and emerging markets in 2010.

Anglo-Dutch consumer giant Unilever aims to capitalise on its growth in developing and emerging markets in 2010.

Speaking to analysts at the CAGNY conference in Florida yesterday (16 February), Michael Polk, president of Unilever Americas told analysts that Unilever’s “unrivalled strength” in the developing and emerging markets continues to be a source of “competitive advantage” for the business.

“Around one half of Unilever’s global sales are in developing and emerging markets. We are the leading consumer products player in these markets and so we are uniquely well placed to prosper from the demographic trends and rising disposable incomes which will flow in the years to come,” Polk said.

The Unilever boss added that the firm expects to have around 1bn new consumers in these markets by 2020.

“We see developing and emerging markets as a huge opportunity for Unilever. Our priority is to build brands and business models which will serve and meet the needs of these consumers and to lead the development of our markets in these geographies,” Polk said.

The firm’s footprint in developing and emerging markets has grown from 20% to 50% of Unilever in the last 20 years and Polman said the company is hoping this trend will continue.

Earlier this month, the consumer goods giant said it had made “good progress” in 2009 with rising underlying sales and volumes accelerating throughout the year.

Net income in 2009 slid 31% to EUR3.66bn (US$5.07bn), while operating profit dropped 30% to EUR5.02bn.

However, the owner of brands including Knorr, Flora and Ben & Jerry’s reported underlying sales growth of 3.5% for 2009, with sales in the Americas, Asia and Africa all rising.

“And as you can see, we have weathered the economic storms of the last two years and come out strongly, with volume growth in 2009 close to the long term average of 5% despite the challenging environment we have faced. This reflects both the robustness of the markets and our share growth,” Polk told analysts yesterday.

However, he conceded there is “still much to do and improvements still to make”.

“This is not a bad thing. Our expectation is that the environment in 2010 will be just as tough as in 2009, and we are prepared for that. We know that competition will be tougher and that consumers will be even more demanding. Our priorities for 2010 are clear and straightforward. They are to drive volume growth, whilst providing a steady year-on-year improvement in underlying operating margin and strong cash flow.”

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