Unilever: A good start with strong volume growth in first quarter

10 May 2018

Unilever has announced its results for the first quarter of 2018, which show good volume-driven performance across all three divisions.

  • Underlying sales growth excluding spreads 3.7% with volume 3.6% and price 0.1%
  • Emerging markets underlying sales growth 5.1% with volume 4.3% and price 0.8%
  • Share buy-back programme of up to £6 billion to start in May 2018
  • Quarterly dividend raised 8% to £0.3872 per share.

Commenting on the results, CEO Paul Polman says: "The first quarter demonstrates another good volume-driven performance across all three divisions. The broad-based growth, including over 4% volume growth in emerging markets, shows that the 'Connected 4 Growth' programme is working and enhancing our long-term compounding growth model. We are further improving the quality and speed of our global and local innovation as a result of a more agile, consumer-facing organisation. At the same time, we are maintaining strong delivery from our savings programmes and expecting to complete the exit from spreads in the middle of the year.

"For the full year, we continue to expect underlying sales growth in the 3%-5% range and an improvement in underlying operating margin and cash flow that keep us on track for our 2020 goals. We intend to start a share buy-back programme of up to £6 billion in May to return the expected after-tax proceeds from the spreads disposal. We are raising the dividend by 8%, reflecting confidence in our outlook."

Our markets

In the markets in which we operate growth was around 3%, similar to 2017. We did, however, see an improvement in volumes and a lower contribution from price growth, particularly in emerging markets.

Overall performance

USG excluding spreads was 3.7% with an encouraging shift to volume-led growth compared to the prior year. Across all Divisions, this was driven by strong innovation and market development. USG including spreads was 3.4%. Turnover decreased 5.2% to ?12.6 billion, which included an adverse currency impact of (9.8)% and 1.5% from acquisitions net of disposals. Emerging markets grew by 5.1% with a strong contribution from volume, while price growth was modest in a lower inflation environment. Developed markets grew by 1.1% despite continued price deflation in Europe and North America.

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