Guangzhou China April 14, 2011 - Unilever's performance in the UK has exceeded analysts' expectations, according to a trading statement issued today, which showed underlying sales in Western Europe down by 2.7%.
Clive Black, city analyst at Shore Capital, indicated the results for the UK, which Unilever described as "resilient", were better than he had expected, while the results for Western Europe overall were worse.
"Western Europe, which we were nervous about but not nervous enough, saw a contraction in sales reflecting the challenges of southern Europe and weak sales of savoury and spreads in Germany," said Black. "The UK and France were said to be 'resilient'; we had harboured especial concerns about the UK performance."
In its first quarter highlights, Unilever reported that turnover had increased by 7.0% to €10.9bn, with underlying sales growth across the globe of 4.3%. All categories were said to be growing, driven by emerging markets up 9.9%. Unilever reported underlying volume growth of 2.5%, with pricing up 1.8%. However, it added a note of caution that input costs were likely to rise over the coming year.
Unilever chief executive Paul Polman said: "We have delivered a good performance which demonstrates that the transformation of Unilever is progressing well; this against a backdrop of rising commodity costs, weak consumer confidence and very competitive markets."
Polman added: "All categories are growing, driven by a particularly strong performance in the emerging markets. We have continued to deliver volume growth, albeit at a lower rate than in recent quarters reflecting the pricing action taken and the sluggishness of the developed markets."
Unilever's tea business had grown on the back of a strong performance in South Asia, but the company also reported strong growth and good share gains in the UK and the early success of the Lipton Pyramid Green and White teas in Western Europe and Russia.
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