Neville Prior

Home And Personal Care In Growth Markets Lift Unilever’s Results

Neville Prior  27 April 2013 06:15:32 PM
Unilever reported its first quarter earnings on April 25, and investors have much to cheer about. The company reported total revenues of $16.23 billion, delivering solid underlying sales growth of 4.9% year on year. This was supported by a balanced positive movement between volume and prices of 2.2% and 2.6%, respectively. The results were slightly below our expectations, as can be seen in our earlier analysis here.

More than 57% of total Unilever revenues come from the emerging markets and the rest comes from the developed markets. Similar to last year, emerging markets drove the revenues in the first quarter while developed markets reported a negative change. Emerging economies clocked a net growth in sales of 10.4%. The growth in emerging economies was broad-based and largely supported by volume. Countries like Indonesia, Vietnam, Thailand, China, and Turkey contributed substantially to the overall improvement. Kalina beauty brands, acquired in 2011, showed excellent progress during the first quarter. The company has also deepened its distribution in India and Indonesia to take advantage of the growing demand in these regions.

Meanwhile, the developed markets disappointed the investors by contributing negatively to overall sales growth, it was down 1.9%. This is majorly driven by a slowdown in Europe as the underlying sales declined by 3.1% while in the Americas it grew by 6.1%. Lower sales growth in Europe is a result of continued erosion of consumer confidence due to the fiscal tightening and financial crisis. Latin America outperformed by delivering solid 12.3% growth year on year, with Brazil and Argentina markets contributing significantly.
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