Unilever sales increase

Feb 4 2010 By nebusiness

Consumer goods giant Unilever today said sales volumes jumped 5% after an advertising drive and new products boosted trading at the end of 2009.

Lower prices also helped lift demand after the Dove-to-Knorr group said underlying prices fell 3.1% in the quarter to December 31 due to lower commodity costs.

Despite some of the toughest conditions ever faced by the firm, Unilever said all regions delivered an improved trend in volumes and market share. Across the year, sales grew by 3.5% after a 2.3% improvement in sales volumes.

Unilever - home to a host of household staples such as Flora spread and Domestos detergent - boosted its expenditure on advertising and promotional activity in the period, while it also launched products such as a new range of Lipton teas and Surf detergent in the UK.

Chief executive Paul Polman said: "Our brands are stronger, driven by better quality innovation and a step-change in advertising and promotional expenditure."

He added that the company expected continued pressure on consumer spending and heightened levels of competition in 2010.

"We will continue to focus on volume growth as the main driver of long term value creation," Mr Polman added.

The company said net profits excluding restructuring initiatives were 6% lower at 4.01 billion euros (£3.5bn) in 2009. This included a drop of 3% to 830 million euros (£725m) in the final quarter.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said the company had delivered "a solid if not inspirational performance".

He added: "Profit margins have been aided over the year by falling commodity prices, a factor assisting management in reducing prices and thereby increasing product attractiveness for consumers."