Unilever results benefit from increased prices

By Katie Bird

- Last updated on GMT

Related tags Marketing

Unilever’s strong third quarter sales were driven mainly by increased prices as sales volumes suffered in some regions.

The Anglo-Dutch company reported sales of €10.4bn for the three month period ending September 30, an 8.3 per cent increase on last year’s figures.

However, 7.7 per cent of this change is down to increased prices and only 0.6 per cent can be attributed to higher sales volumes.

According to the company, although sales volume increased slightly during the period it is ‘not yet where we want it to be’.

Europe sales volumes down

Europe suffered particularly badly as sales volumes decreased 2.1 per cent on last year’s figures, with the rise in prices bringing the overall figure to an increase of 2.5 per cent.

Although figures for the Americas were slightly stronger, with sales growth of 8.2 per cent, including 1.3 per cent volume increases, the personal care segment was not such a high earner within the region.

Volume sales were lower within the sector whereas food sales volumes held up over the period, according to the company.

However, the quarter did see a number of new launches in the region including ‘Vaseline for men’ and the Dove ‘go fresh’ offering. In addition, a new Axe fragrance ‘dark temptation’ was launched across the region.

The Asia/Africa region was where the company’s figures really excelled, reporting faster growth in terms of volume and price than any other region.

New launches in China including Rexona deodorant and Pond’s anti-ageing and skin lightening creams helped build sales.

Operating profit up from discontinued operations

Global operating profit for the first nine months of the year benefited from significant gains on business disposals.

Operating profit for the nine month period was €5.7bn in comparison to the previous year’s €4.1bn. This increase includes a pre tax profit from disposals of €1.6bn.

In terms of operating margins, the company estimates that the disposal of businesses such as the Boursin cheese, and Lawry’s seasonings will have a dilutive effect of around 0.2 percentage points in this year’s fourth quarter.

Commenting on the results Unilever Group chief executive Patrick Cescau said: “We have strengthened the business in a tough environment…This year we now expect to deliver underlying sales growth well in excess of our long-term target range of 3-5 per cent, together with an underlying improvement in operating margin for the year.”

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