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Unilever profits boosted by sale of operations and higher turnover

By Simon Pitman , 05-Feb-2009
Last updated on 05-Feb-2009 at 18:36 GMT2009-02-05T18:36:43Z

The Anglo-Dutch consumer goods maker has announced strong results on the back of the sale of food operations and increased selling prices during its fourth quarter.

But the results were mainly driven by the food and beverage categories, with personal care sales during the quarter posting underlying sales growth at just 5.7 per cent to €2.99bn.

The sale of the company’s Bertoli olive oils operations helped to boost net profits by 58 per cent, up from €721m in the fourth quarter of 2007, to €1.14bn.

2008 net profits up 28 per cent

Net profits for the full year 2008 rose at a more steady 28 per cent, to reach €5.28bn.

Overall fourth quarter sales grew by 3 per cent to €10.15bn, while the full year sales growth of 1 per cent to €40.52bn was more indicative of the tough economic conditions worldwide.

Personal care sales, the company’s second biggest division, were €11.38bn in 2008, while underlying sales during the period for the savoury dressings and spreads division were up 7.6 per cent to $14.23bn, ice cream and beverages were up 5.9 percent to €7.69bn and home care sales up 9.8 per cent to €7.21bn.

2008 'solid progress'

Unilever CEO Paul Polman described the results in 2008 as demonstrating ‘solid progress’ for the company, however, he did exercise more restraint when referring to the future performance.

“Given the current economic uncertainty I believe it is inappropriate at this stage to provide an outlook specifically for 2009 or to reaffirm targets,” he said.

“Whilst we have been more or less holding value share our priority will be to focus first and foremost on volume growth. At the same time we will protect cash margins, driving our savings programmes even harder. By doing this we expect to emerge from the current conditions stronger and more competitive than ever.”

European performance weakest

On a regional basis Europe showed the weakest performance during 2008, posting underlying sales growth of 1.3 per cent during 2008 at €12.83bn.

The company said that in the UK and Netherlands its restructuring programme had resulted in a positive volume growth during the fourth quarter, while France, Germany and Spain had all lost ground to private labels.

In the Americas, underlying sales growth for the year was up 6.5 per cent to €13.20bn, but the results were polarized by a Latin American/North American divide.

In the US, underlying sales grew by 3.8 per cent during 2008, slipping to 3.1 per cent during the fourth quarter – reflecting the big slow down in the retail sector. In Latin America underlying sales rose by 12 per cent for both the fourth quarter and 2008.

In the Asia Africa and CEE markets underlying sales grew by 14.2 per cent to €14.47bn, driven by particularly strong gains in, reflecting a particularly strong performance in the India, Indonesia and China markets.

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