Unilever's first-quarter revenue growth led by sales in developing economies
Unilever Plc, the world's second-biggest consumer-goods company, reported first-quarter revenue growth that beat estimates and outstripped competitors Groupe Danone and Nestle SA, led by Dove skincare and Tresemme hair products.
Underlying sales, which exclude acquisitions, disposals and currency fluctuations, rose 8.4 percent from a year earlier, the maker of Hellmann's mayonnaise said on Thursday in a statement. The average estimate of 30 analysts surveyed by Unilever was for a 6.4 percent gain. Units sold increased 3.5 percent, more than double the 1.6 percent gain analysts expected and the best performance since the fourth quarter of 2010.
Unilever shares rose the most in eight months. While sales growth was led by emerging economies, developed markets such as Europe and North America also contributed to the improvement as consumers snapped up new products such as Axe Anarchy deodorant. Revenue was also boosted by higher prices to counter soaring costs of commodities such as edible oils, which Jean-Marc Huet, Unilever's chief financial officer, said are "stubbornly high".
"The quarter was pretty impressive and well ahead of expectations," Andrew Wood, an analyst at Sanford C. Bernstein, said in a note. "Volumes were very strong and mid-single-digit growth in mature markets was a very pleasant surprise. The quarter should be well received by investors."
Developed markets
Sales in developed markets, which make up 44 percent of the total, rose 4.2 percent in the quarter, helped in part by an earlier Easter holiday this year and an extra leap-year day of sales. Emerging-market revenue increased 12 percent.
Unilever shares climbed as much as 5.4 percent in Amsterdam, the steepest intraday advance since Aug 4.
Sales growth at London- and Rotterdam-based Unilever topped that reported this month by Danone, the world's biggest yogurt maker, and Nestle, the world's largest food maker.
"Unilever is defying its detractors by delivering another quarter of peer-beating results and market-share gains across the portfolio," Simon Marshall-Lockyer, an analyst at Jefferies International, said in a note on Thursday.
Underlying sales rose 10 percent in the personal-care segment, which accounts for one-third of total revenue, driven by brands like Dove and Tresemme. Sales increased a similar amount in the home-care unit, fueled by new products and the introduction of Comfort fabric conditioner in Australia, New Zealand and South Africa. Food revenue increased 5.9 percent.
UK recession
"Unilever's home and personal-care business is firing on all cylinders," Jon Cox, an analyst at Kepler Capital Markets, said.
CFO Huet said underlying sales advanced about 5 percent in the United Kingdom, where data on Wednesday showed the economy contracted 0.2 percent in the first quarter, pushing Britain into its first double-dip recession since the 1970s. Unilever gets about 5 percent of its sales from the UK.
"The UK has been a difficult market", with a high level of products sold at discounted prices, Huet said.
Across Europe, sales rose 5.1 percent, compared with a 2.7 percent decline in the year-ago quarter, Unilever said.
Huet said that 56 percent of Unilever's sales come from emerging markets such as India, Indonesia and Vietnam, compared with about 47 percent when he arrived at the company in 2010.
Unilever's costs for raw materials in 2012 will be "slightly higher" than the mid-single-digit increase the company forecast in February, the executive also said, citing high prices for crude oil and vegetable oils.
"The volatility is pretty intense," Huet said. Oil prices are 5.6 percent higher this year, and oil futures on Thursday traded near the highest in more than a week after US Federal Reserve Chairman Ben S. Bernanke said that while further stimulus is unlikely, central banks "remain prepared to do more" to protect the economy.
Unilever's total first-quarter sales advanced 12 percent to 12.1 billion euros ($16 billion).
Bloomberg News in London
