Unilever cleans up with 19% earnings boost

The company's third-quarter results show an impressive jump in sales across all its regions.

by Emma Haslett
Last Updated: 04 Nov 2010
Say what you like about us Europeans, but don’t accuse us of lacking in the personal hygiene stakes: Unilever, the company behind Dove and Cif, has reported that its earnings rose by 19% in the three months to September – driven in part by Europe’s love affair with deodorants. According to figures released today, third-quarter income rose to €1.25bn (£1.1bn), while sales were up an impressive 12.3%, to €11.5bn. But Paul Polman, the company’s CEO, said that despite Unilever being in relatively recession-proof businesses (eating, washing and cleaning: it doesn’t get more essential than that) Unilever has faced some tough trading conditions – and we may see some evidence of that next quarter...

Unilever said today that turnover was up by just under 11% to €33.4bn, while underlying volume rose by 4.8% - encouraging, especially when you compare it to analysts’ forecast of 4.4%. Part of that was driven by positive gains in Europe, where sales volume rose by 0.6%, while it also managed to cut costs heavily. And developing economies also helped to shore up sales, with Unilever’s market share in Saudi Arabia, South Africa and India expanding fairly rapidly. Apparently, the company discovered a particular passion for ice cream among the Turks. Turkish Delight flavour Ben & Jerry’s, coming soon to a supermarket near you...

While the results are, on the whole, encouraging, Polman isn't getting too carried away. This was 'solid progress', he said, but Unilever was still battling the 'combined headwinds of slow economic growth, weak consumer confidence in many markets and higher commodity costs.’ As a result, the company has already seen its prices in drop by 1.2% this quarter – and with a weak Euro already wreaking havoc with prices, during the fourth quarter, Unilever may apparently begin to see its margins slip.

Following its $3.7bn acquisition of the company behind VO5, TRESemme and Simple, though, Unilever is now working on completing a purchase of Sara Lee’s personal care products division. If it works out (European regulators are keeping a close eye on the deal), Unilever would surpass Procter & Gamble to become the biggest producer of personal hygiene products in the world. No flies on them, eh?

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