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Food Volumes Down at Unilever

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Food Volumes Down at Unilever

Food Volumes Down at Unilever
February 03
12:26 2012

Unilever has reported a 1% increase in both operating profit and net profit to Eur6.43 billion and Eur4.62 billion respectively on turnover up 5% to Eur46.5 billion for 2011. Underlying sales growth was ahead by 6.5% with price up 4.8% and volume growth 1.6%. The rise in sales was driven by strong growth in emerging markets and the Home Care and Personal Care categories.

However, underlying volumes from the foods division declined by 3.9% in the fourth quarter and by 1.2% for the full year. Price increases were responsible for the 4.9% rise in turnover from the food business to Eur13.99 billion. The refreshment business, incorporating ice cream and beverages, achieved underlying sales growth of 4.9% to Eur8.80 billion with price rises contributing 3.4% and volume growth of 1.4% for the year.

Paul Polman, chief executive of Unilever.

“In Foods, whilst price increases have impacted volumes, we have grown in line with our markets and gained share in many of our key businesses,” says Paul Polman, chief executive of Unilever.

The group’s underlying operating margin fell by 10bps with a reduction in overheads offsetting much of the pressure on gross margins from higher commodity costs.

“In 2011 we have made significant progress in the transformation of Unilever to a sustainable growth company despite difficult markets and an unusual number of significant external challenges.” John Polman continues: “We expect the external macro-economic environment to remain difficult in 2012 and input cost headwinds will persist, although to a lesser extent than in 2011. Within this challenging context our over-riding priority is to manage our brands for the long term health of the business whilst delivering: profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow.”

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