Anglo-Dutch consumer goods company Unilever PLC/NV beat growth expectations in 2012, propelled by an increasing presence in emerging markets and leading its shares to a record high price.
Unilevel has been looking to focus on its fast-growing personal care sector
The maker of Ben & Jerry’s ice cream and Omo detergent reported 2012 underlying sales growth of 6.9 per cent, beating forecasts of 6.5 per cent, while cautioning that its markets remain difficult.
“We’re making much clearer choices – allocating resources, and concentrating where we see the most potential,” said chief financial officer Jean-Marc Huet on a call with journalists yesterday.
“It could be the launch of Tresemmé (haircare products) in Brazil, Indonesia, India. It could be the launch of this product in the US, Magnum (ice cream) in the Philippines, Bertolli Gold (olive oil spread) in the Nordics, the UK – the list continues.”
Emerging markets, which make up around 55 per cent of the company’s turnover, grew 11.4 per cent, although performance in Europe and in businesses with significant exposure to developed markets – such as Flora margarine and other spreads – was sluggish.
The company has benefited from its exposure to emerging markets, contrasting with its main household products rival Procter & Gamble, which is shedding jobs, and French yoghurt maker Danone, which may do the same as the European economic downturn weighs on its business.
Unilever has been looking to focus on its fast-growing personal care sector – where it owns labels like Dove, Lux and Rexona – and has added new brands which it sees as having the potential to do well in Latin America and Asia, such as Alberto Culver.
The company did not give a specific outlook for 2013, but repeated its mantra of focusing on growing ahead of its markets, on steady core operating margin improvement and on strong cash flow.
“As expected, 2013 guidance was the standard and somewhat vague,” said analyst Andrew Wood at Bernstein.
“Management remains cautious on the markets and competition, but that was no different to its position 12 months ago. Still, it will be tough for Unilever to repeat 2012’s success, especially on the top-line.”
The world’s third-biggest consumer goods group after Nestlé and Procter & Gamble acknowledged that the economic backdrop continued to be tough.
“There is no room whatsoever for complacency,” said Huet. “In 2013, the markets in which we operate will continue to be difficult. Competition will remain intense and consumers are still feeling very much the effects of austerity measures.”
He expected raw material cost rises between low and single digits in 2013, Huet added. The company said sales for the full year were €51.3 billion, while core earnings per share rose 11 per cent to €1.57, both in line with forecasts.