Unilever beats forecasts, share price jumps

Unilever beats forecasts, share price jumps
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First Published: Thu, May 07 2009. 01 46 PM IST
Updated: Thu, May 07 2009. 01 46 PM IST
London: Consumer goods giant Unilever beat forecasts with a 4.8% rise in first-quarter underlying sales on Thursday and its new chief executive said it plans to boost sales volumes with a drive on marketing and new products, pushing its shares higher.
Paul Polman, who took over in January having previously worked at rivals Nestle and Procter and Gamble, said he aimed to drive volumes higher from the second quarter, the group having relied on recent price rises for all of its sales rise in the first three months of 2009.
“We will further step up innovation and brand support from the second quarter and expect this to drive an improved volume performance,” Polman said in a results statement on Thursday.
Unilever Plc shares jumped 7.7% to £14.15 by 0745 GMT to be the FTSE 100’s biggest riser on relief over the strong sales line after investors were braced for a worse performance and following their underperformance in 2009.
“Looking forward, life should become easier, volume comparatives ease, fix-it plans will gain traction, commodity headwinds should ease and change should continue to permeate through the organisation,” said Jeff Stent at broker Citi.
The quarterly sales rise from the maker of Sunsilk shampoo and Hellmann’s mayonnaise was ahead of the average market forecast of 4.1% and towards the top end of a 2.8 to 5.8% range for forecasts for the January-March quarter.
Anglo-Dutch Unilever Plc/NV, the world’s third-biggest food and consumer goods group, said the sales rise came from price increases of 6.8% with group quarterly sales volumes down by some 1.8%.
But the strong sales line was tempered by a poor performance in Western Europe where sales dipped 2.8% due to the slowdown and down-trading to private label goods leaving the group little room to raise prices with volumes off 3.7%.
Polman shocked investors in February by scrapping its targets due to global economic uncertainty saying it could not give a 2009 outlook in current conditions, and he reiterated that message on Thursday by giving no outlook statement.
The group, whose 400 brands include Ben & Jerry’s ice cream and Omo detergent posted first-quarter earnings per share down 13% at €0.30 a share, due to group disposals, compared with forecasts of around €0.32.
Unilever shares have underperformed the FTSE 100 index by nearly 20%and the DJ Stoxx Food and Beverage Index by over 15% so far this year.
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First Published: Thu, May 07 2009. 01 46 PM IST