Unilever reports 3.1% growth in first quarter underlying sales

Anglo-Dutch conglomerate Unilever reported revenues of £10.74bn for its first quarter period today, a 3.1% increase in underlying sales growth.

It said this was led by its emerging market business which grew 5%.

However, it said turnover decreased 1.6%, due to the disposal of the spreads business, but the quarterly dividend will increase by 6% to 0.3554p per share.

Chief executive Alan Jope said: “We have delivered a solid start that keeps us on track for our full year expectations.

“Growth was led by emerging markets and was balanced between volume and price.

“Accelerating growth is our number one priority.

“It requires both great execution and a continued strategic shift into faster growth segments and channels.”

He added: “We saw good performance in key growth channels including out of home and e-commerce and benefited from stronger global innovations and faster and more relevant local innovation.

“The acquisitions we have made since 2015 collectively grew double-digit in the first quarter.

“With the leadership changes announced in March, we are building the right team to drive our growth agenda.”

He said: “For the full year we continue to expect underlying sales growth to be in the lower half of our multi-year 3%-5% range, an improvement in underlying operating margin that keeps us on track for the 2020 target and another year of strong free cash flow.”

Port Sunlight, in Wirral, is the centre for Unilever’s home care and personal care research and development, with more than 750 scientists based there.

World famous brands such as Dove, Sunsilk, Rexona, Axe, Domestos, TRESemmé, Comfort, Dirt is Good, Surf and Signal all have Port Sunlight technology inside.

The group has also created a pilot plant at the site that allows it to manufacture prototype shampoos, fabric conditioners, toothpastes, deodorants and laundry liquids.

Unilever says the plant also works with three local strategic partners – The University of Liverpool, Manchester University and Daresbury Laboratory.

Nearby, the group operates a detergents factory in Warrington.

Russ Mould, investment director at Manchester investment firm AJ Bell, said: “Emerging markets continue to be the key driver of Unilever’s sales with like-for-like growth of 5% in the first quarter of 2019 versus a mere 0.3% gain from developed markets.

“Importantly, growth was balanced between volume and price rather than being reliant on only one of them to drive up earnings.

“However, guidance for underlying sales growth to be in the lower half of its multi-year 3% to 5% range just goes to show that you cannot automatically expect Unilever’s sales to be strong all the time, despite its size and market positioning.

“New chief executive Alan Jope has now been in the hot seat since January and he’s delivered a satisfactory first quarter, although nothing spectacular.”

He added: “Now comes the hard part – he needs to find a way to stop the company’s sales growth from slowing down and adapt Unilever for the new era of retail where online shopping and the rise of discounters are driving down prices.

“Jope needs to decide the shape of Unilever for the next phase of its life – whether that means slimming down the business further to concentrate on the strongest parts, or making acquisitions to further increase scale in certain product lines.”