Emerging markets boost Unilever’s profits
The consumer goods giant, whose brands include Ben & Jerry’s ice cream, Knorr bouillon cubes and Hellman’s dressings, as well as Dove soap and Vaseline, said that emerging markets grew 10.3% in the quarter with “a good mix” from volume and pricing – while developed markets declined 1.3%. Overall, sales grew 5% in the first half of the year with volume growth of 3% and pricing up 2%.
Discussing the results, chief executive Paul Polman said: “We do see a slow down on the macroeconomic level if you look at the major economies…but we are trying to beat that, first of all by being realistic about it, and secondly by having a strong plan behind our brands….Developed markets were more or less 40% of our business and becoming less, as per our strategy.”
He added that Unilever’s spreads business remains the most challenging sector, accounting for slightly less than 7% of the total company.
“The positive news is that the decline we have seen coming off of the enormous commodity cost increases of last year, the decline is slowing down,” he said.
The company said it was no longer so dependent on the European summer for its ice cream sales, which grew despite a cool start to the summer in Europe.
“Magnum innovations such as Magnum Pink and Black, ‘5 kisses’ and the new pints format in Europe are doing well,” the company said. “Cornetto has been relaunched in China and Europe and Ben & Jerry’s growth was driven by new flavours such as Peanut Butter Me Up.”
It also highlighted growth in leaf tea sales, following the relaunch of Lipton Yellow Label tea in the Middle East and Turkey, and good sales from its Brooke Bond Red Label tea in South Asia, where it has relaunched the brand highlighting its health benefits.
