logo


Ice cream helps Unilever on road to recovery
Friday, November 06, 2009 1:54 PM


(Source: Daily Mail)trackingBy Rupert Steiner, Daily Mail, London

Nov. 6--Nine months into the job and the boss of Unilever has posted a second consecutive quarter of growth and made significant inroads in turning the consumer goods giant around.

Chief executive Paul Polman said a combination of spending more on marketing and cutting some prices, helped the firm beat volume growth forecasts. The maker of Domestos and Magnum's ice cream posted a 3.6pc rise in quarterly volumes, ahead of analysts' 2.8pc forecasts. The firm, which also owns Marmite, has embarked on a stream of advertising and launched a new range of Lipton teas and Surf washing power in Britain.

Polman made increasing volume growth -- rather than growing profit margins -- his mantra on joining the firm at the beginning of the year. Unilever had suffered three quarters of falling sales volumes in Europe before he arrived.

But by slashing costs across the business he has also ensured profits are resilient. Operating profit margins for the quarter increased from 16.1pc to 16.8pc. Much of the good news had already been built into the share price which dipped 35p to 1788p.

In a whirlwind nine months Polman, who came from rival Nestle, cleared out almost half his senior team.

He removed 40 of his top 100 managers, scrapped earnings forecasts and has come out with some unusual catchphrases.

At the half year he said "the markets are not easy-peasey Japanesy at the moment."

Analysts called the update "exceptionally strong" with one, Keith Bowman, at Hargreaves Lansdown, saying the group was "inching closer" to its arch rival Reckitt Benckiser.

He said: "Sales have again surprised on the upside, whilst the profit margin has also improved. Like Reckitt, an emphasis on innovation and sustained advertising spend is driving performance, with cost-saving initiatives providing additional momentum."

The boss of the world's third biggest food and consumer goods group warned that with world unemployment still rising and consumer confidence low, the outlook remains tough.

"Market conditions remain challenging," he said. "And in this environment we will continue to increase investment behind our brands and focus on research and development."

Ice cream was a star performer over the past three months and Unilever benefited from growth in emerging markets.

-----

To see more of the Daily Mail and the Financial Mail on Sunday, or to subscribe to the newspaper, go to http://www.thisismoney.com.

Copyright (c) 2009, Daily Mail, London

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

UN, UL, ULVR, RB, NSRGY, NESN,

A service of YellowBrix, Inc.



(0)
No Comments
Post Comment
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
   
 
 
 
 
   
 

  
Related Press Releases
Advertisement
Popular Articles
Advertisement
Partner Center
Fundamental data is provided by Zacks Investment Research, market data is provided by AlphaTrade. , and Commentary and Press Releases provided by Quotemedia