Better European sales help boost Unilever results

By Simon Pitman

- Last updated on GMT

Increased European growth alongside the continued strength of
Unilever's personal care division helped boost sales for the fourth
quarter, although profits fell.

The Anglo-Dutch consumer goods giant reported that fourth quarter sales were up 1.7 per cent to €9.89bn, compared to €9.72bn for the same period a year earlier. This performance pushed the full year sales up 1.4 per cent to €40.2bn, a figure that was negatively affected by the strong Euro. CEO Patrick Cescau said the results reflected the restructuring of the business to create a 'more flexible and resilient company', which also puts it in a good position to achieve an operating margin in excess of 15 per cent by 2010. "In 2008 we expect underlying sales growth to be towards the upper end of our 3-5 per cent target range and to see a further underlying improvement in our operating margin,"​ he said. Profits impacted by sale of frozen foods division​ Fourth quarter net profits results fell from €2.03bn in the 2006 financial year to €721m - a figure that was was impacted by a €1.2bn gain from the sale of its frozen foods division in 2006. For the full year net profit was down to €3.89bn, from €4.75bn in 2006, a drop of 18 per cent. On a segment basis, the company reported strong growth for its personal care and home divisions. Personal care sales solid​ During the fourth quarter the personal care division reported sales up 1.6 per cent to €2.83bn, while sales for the full year were also up by 1.6 per cent to reach €11.30bn. For the home and personal care division sales for the fourth quarter were up 1.4 per cent to €4.67bn, while sales for the full year were up 1.6 per cent to €18.60bn. On a regional basis European sales, which have proved to be a weak point in recent years for the company, continued the sustained improvement trend that has been demonstrated throughout the rest of 2007. Sales grew 3.4 per cent during the fourth quarter to €3.74bn, while sales for the full year were up 1.4 per cent to €15.20bn. Russia leads the way​ Russia was reported to be the 'outstanding performer' in the region, while strong results also came from the UK, German, Italy and the Netherlands. On a product basis the company reported that the new Dove pro-age range was building well in the region, while significant launches have also included Dove summer glow self-tanner all over Europe and Clear anti-dandruff shampoo in Russia. In the Americas sales were down 3.3 per cent for the fourth quarter to €3.33bn, while for the full year sales were down 2.4 per cent to €13.44bn. Strength of Euro hits US sales​ The figures were negatively impacted by the strength of the Euro against the US dollar, as well as a soft US retail market, but the company also pointed out that underlying growth was up 4.1 per cent for the full year. Strong performances were reported throughout the year in Argentina and Central America, whereas Brazil and Mexico showed marked improvement in the second half. New launches included Clear anti-dandruff shampoo in Brazil, while the Dove pro-age range was given a similar roll-out in the US to that in Europe. The Asia region faired much better than the Americas, with fourth quarter sales up 5.7 per cent to €2.87bn, while full-year results were up 6.2 per cent to €11.54bn on strong performances in China, the Philippines, South Africa and Turkey. Launch highlights in the region included an improved range of Dove shower products in North East Asia, while Lifebuoy soap was launched in South Africa.

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