Unilever reported its 2010 full year and fourth quarter financial results, highlighting a strong year that saw the company make acquisitions and position itself for a further global presence in coming years. The full year highlights include turnover up 11.1% at €44.3 billion, with 7.3% due to currency, as well as underlying volume growth of 5.8% from underlying sales growth of 4.1% and underlying price growth of 1.6%. Additionally, in-quarter pricing was flat for first nine months, and positive in the fourth quarter. Fourth quarter highlights include underlying volume growth of 5.1%, with underlying sales growth at 5.1% and underlying price growth flat from positive in-quarter pricing.
According to the company, 2010 results were strong despite intense competition, weak consumer confidence in many markets, and the impact of rising commodities costs in the second half. Whilst markets showed little or no growth in the developed economies, emerging market growth remained healthy. Unilever grew its volumes ahead of the market in all regions and finished the year strongly despite a strong prior year comparator. Whilst in-quarter pricing was flat throughout much of the year, it became positive in the fourth quarter as the company responded to increasing commodity costs. Savings programs delivered strongly across both supply chain and indirects, and Unilever also invested in product quality and significantly increased the investment behind its brands whilst improving advertising quality.
Additionally, the acquisition of Sara Lee’s personal care business was completed during the fourth quarter, and the proposed acquisition of Alberto Culver has received shareholder approval and now awaits approval of the relevant regulatory authorities.
All categories grew volume and generated positive underlying sales growth in 2010, ending the year on a strong note. Almost all of Unilever’s major brands grew volume on the back of bigger, better innovations rolled out more quickly across more markets. Dove Men+Care is now in more than 30 markets and Dove Damage Therapy hair care products have reached 22 markets. In addition the company has accelerated the rates at which it is extending its brands into new markets, with more than 100 new launches in the year.
Specifically for the personal care category, deodorants capped another excellent year for Unilever with a strong quarter driven by Dove Men+Care, the continued strengthening of the Rexona brand and the launch toward the end of the year of the latest Axe variant, Excite. Hair continued to make good progress with strong growth in North America, China, Southeast Asia and India as a result of the rollout of Dove Damage Therapy, the continued rollout of Clear in Latin America and the relaunch of Clear in Asia. TiGi continued to perform well ahead of the professional market growth. Skin delivered a solid quarter driven by continued momentum on Dove Nutrium moisture, Dove Men+Care, the latest Axe shower variant Rise, which contributed to record Axe shower market shares in the United States, and the rollout of Lifebuoy and Vaseline into new countries. The company’s oral business delivered a solid year despite a heightened level of competitive activity. Signal Sensitive Expert was launched in France and White Now continues to do well across many markets including Vietnam and the Philippines.
Unilever’s CEO Paul Polman said, “We are pleased with another year of good results in which we delivered against all our key priorities and further progressed the transformation of Unilever. We delivered strong volume growth, particularly in emerging markets, which continued to be the engine of growth. We gained volume share in all regions driven by stronger innovations, significant increases in marketing investment and the extension of our brands into new territories. At the same time we delivered margin improvement through a strong savings program, lower indirects and volume efficiencies. This, coupled with excellent working capital management, enabled us to deliver robust cash flow. The Unilever of today is more agile and confident, now fully fit to compete. We remain focused on serving our consumers and customers and building the long term health of our brands. Despite the intense competition and the return of commodity cost volatility, our objectives remain: profitable volume growth ahead of our markets, steady and sustainable underlying operating margin improvement and strong cash flow.”
As to specific world growth, in the Asia-Africa CEE region in 2010, Unilever grew ahead of the market and continued to gain volume share. Asia-Pacific delivered double-digit volume growth in the year with a strong fourth quarter. There were particularly strong performances in Vietnam, the Philippines, Pakistan and China. In India the company delivered consistent double-digit volume growth, and the business in North Africa, Middle East and Central Africa performed well throughout the year. While market conditions in Central and Eastern Europe were weaker, volume growth was still comfortably positive. In-quarter pricing for the region was positive in the fourth quarter.
In the Americas, the company gained volume share in 2010 and saw higher underlying sales growth driven by consistent growth in Latin America and good performance in North America. In the fourth quarter, North America accelerated volume growth to around 3% whilst Latin America balanced volume growth of more than 4% with increased price. While the U.S. economy remains difficult and increasingly competitive, Unilever’s business continued to benefit from its strong innovation program. The Brazilian market continues to grow strongly but remains highly competitive; in this context the company’s business delivered good results. Mexico had a particularly good year, gaining share in a number of key categories and the Southern Cone had another excellent year with a strong recovery in Chile after the devastating earthquake.
And in Western Europe, despite difficult markets, Unilever delivered volume growth and improved volume share in the year, with positive volume growth in the fourth quarter. Underlying price continued to improve but was still negative year-on-year reflecting the high levels of promotional intensity in many of the company’s markets. Conditions in Southern Europe remain particularly challenging. Northern Europe is more robust and the company saw strong performances in the U.K. and France.