Anglo-Dutch food and consumer goods giant Unilever has said its net profit before exceptional items and amortisation of goodwill and intangible assets (BEIA) rose 7% to €851m (US$1.01bn) in the first quarter despite a disappointing sales performance.
Net profit fell 15% to €530m, mainly due to the lower after tax profits on disposals. Operating profit BEIA slid 1% to €1.46bn, while turnover slid 2% to €9.79bn. Sales of the leading brands grew by 1.3%, with pricing flat.
“Our strategy is designed to deliver robust long-term value growth. It is strong brands that best take advantage of our category knowledge and the scale benefits of Unilever; they have the margin structure to support a sustained programme of innovation and competitive levels of support. However, we are not happy with the short-term sales performance and action is being taken to address this,” said chairman Niall FitzGerald.
“In the first quarter we have seen a continuation of the tough business environment that we saw for much of 2003 with lower than historical market growth. Whilst there are clear signs of an improving economic outlook we are also currently seeing an increased level of competitor activity in some key markets. However, with the benefit of continuing Path to Growth savings, we are taking the appropriate tactical actions while implementing our planned innovation and brand building activities. All this is consistent with sustaining long-term business health and the principles of value creation outlined in ‘Unilever 2010’,” he added.