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By Rebecca Burn-Callander Wednesday, 23 January 2013

Bumper Unilever earnings tickles the FTSE's fancy

Unilever, the maker of Lynx, PG Tips and Cif, has reported profit growth of 6.9% in 2012, driving the FTSE 100 up by almost three points.

Unilever, (one of MT's Most Admired companies last year) has fuelled strong gains in Britain’s top share index by posting a €51.3bn (£42bn) turnover for 2012, with profits up 6.9% to €6.7bn (£5.61bn), beating the analysts’ average forecast of 6.5%.

Despite the global downturn and the ongoing eurozone turmoil, Unilever’s 2012 earnings are hotter than a mug of steaming Bovril.  In its fourth quarter results, the consumer products giant reported revenue growth of 7.8%, taking full-year turnover past the €50bn mark for the first time, up more than 10% on 2011.

The emerging markets, which now make up 55% of Unilever’s turnover, are the star performers for 2012: sales are up 11.4% for the year. And this double-digit growth in Asia and Africa has helped to offset the more ‘sluggish’ sales in Europe, where revenues are up just 3.3%.  

Unilever has been quick to respond the new age of austerity in Europe, selling Surf detergent in five-wash packages in Spain and producing single-serve portions of mashed potatoes and mayonnaise in Greece. These smaller, cheaper sizes, which are already commonplace in the emerging markets, have helped Unilever to grow its European business, albeit by only a notch or two, while rivals like Procter & Gamble are shedding jobs to preserve profit.

‘These results have been achieved in tough economic conditions, with volatile commodity costs and in an intensely competitive environment,’ says chief executive Paul Polman. ‘Emerging markets again contributed double-digit growth helping us exceed 50 billion euros in turnover, an important milestone in our journey to double the size of Unilever from 40 to 80 billion euros.’

Not only has Unilever beaten its €50m revenue target, two of its brands have beat ambitious targets of their own. Last year, Magnum ice creams and Sunsilk hair care products generated over €1bn each in revenue. Like these new superbrands, the future looks cool, smooth, with plenty of volume for Unilever…

Read the MT interview with Unilever CEO Paul Polman here

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