Unilever released its results for the first quarter 2012, reporting turnover for the company increasing by 11.9% to €12.1 billion and underlying sales growth was 8.4% with emerging markets up 11.9% and developed markets up 4.2%.
The first quarter results for Unilever reflected a solid performance in challenging market conditions. Despite sluggish economies, weak consumer confidence in many markets and sustained levels of competitive intensity, all of the company’s categories grew strongly with a positive contribution from volume. Commenting on the performance, Unilever CEO Paul Polman said, “We have made a good start to the year, which underlines the progress that we have made in transforming Unilever into a sustainable growth company. We have grown ahead of our markets with all categories delivering positive volume growth. Emerging markets, now 56% of the business, have again delivered strong growth, and while the good performance in developed markets was against a weak prior year comparator, our performance is pleasing given struggling economies, continued fragile consumer confidence and competitor activity. The Unilever Sustainable Living Plan is at the heart of our strategy. Increasingly, sustainable growth will be the only acceptable way of doing business. Our future success depends upon being able to decouple growth from our environmental footprint while at the same time increasing our positive social impacts. We are now seeing increasing evidence that this can drive business growth. For example, Lifebuoy is growing consistently as we roll out our hand-washing program, enter new markets and launch new products such as Lifebuoy Clini-Care10, which delivers breakthrough technology for germ protection and superior skin care. The external macroeconomic environment remains difficult and higher input cost headwinds persist. We continue to implement our strategy with discipline and to manage our brands for the long term health of the business. Our long-term priorities remain unchanged—profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow. For 2012, we remain on track to deliver a modest improvement in full year core operating margin, weighted towards the second half of the year.”
Specifically for the company’s personal care division, in skin cleansing, Unilever grew ahead of the markets with Dove reflecting the continuing success of Dove Nutrium Moisture shower gels and the roll-out of Dove Men+Care. Lifebuoy also progressed strongly, helped by the ‘10 seconds germ-kill’ campaign and the introduction of Lifebuoy Clini-Care10 in India. Radox performed well in the UK, and the launch of Simple in the US, along with a strong performance from Fair & Lovely, also helped drive growth. Vaseline performed well, continuing to benefit from the Essential Moisture hand and body range, which is now in 14 markets. Hair benefited from the roll-out of brands into new markets and strong innovation performance. TreSemmé growth is being driven by the success of the launch in Brazil and the new split ends range. Dove Damage Therapy continues to perform well, and the premium Style and Care styling range has just been introduced in the US. Clear is growing rapidly across Asia and Latin America, and Axe hair is now being rolled out across Europe with good initial acceptance. Deodorants also performed well, driven by the company’s market development activities in emerging markets, with Dove growing double digits, reflecting success in both the male and female markets. Rexona Maximum Protection is being rolled out to new markets and Axe Anarchy is performing strongly. Oral growth was driven by market development activities and trading up through premium innovations, such as the recent introduction of Signal Sensitive Expert in France.
Geographically, the company marked strong growth, ahead of all the markets in the Asia/Middle East/Africa region, driven by good performances in Indonesia, India, Vietnam, Saudi Arabia and Turkey. While Thailand recovered after the floods late in 2011, Japan remained sluggish. Growth rates in Russia improved and the integration of the Concern Kalina acquisition is progressing well. The rollout of the regional SAP platform continues with countries in Central Africa successfully going live at the end of the first quarter. North America grew by 5%. Volume growth was negative, but less so than the region’s markets. The North American personal care market volumes were flat; however Unilever continued to gain share on the back of its strong marketing program, such as the launch of Simple. Latin America grew by 10.9%, ahead of markets, with particularly strong performances from Brazil and Argentina. The launch of Tresemmé in Brazil has made an excellent start. And in Europe, the strong performance in the quarter reflected broad-based growth with good performances from all the major markets but against a very weak prior year comparator. European markets remain very challenging with low consumer confidence and intense competition.