Unilever Q3 Turnover Climbs; Sees FY Sales Towards Upper End Of View; Stock Up

(RTTNews) - Consumer goods giant Unilever Plc.'s (UN, ULVR.L, UL) third-quarter turnover increased from last year, helped by a soft prior-year in China, strong ice cream sales and some advanced sales in Latin America. The figure also benefited from currency.

Looking ahead, the company, which makes Magnum ice cream, now expects underlying sales growth for the year towards the upper end of its 2-4 percent range view.

Paul Polman, CEO, said, "The strong delivery in the third quarter shows that our focus to build our company for the long term is paying off. Growth was however helped by some specific factors such as a soft comparator in China, strong ice cream sales and some advanced sales in Latin America."

Turnover increased 9.4 percent to 13.4 billion euros from 12.24 billion euros, including a positive currency impact of 2.9 percent.

Underlying sales growth was 5.7 percent, with volume up 4.1 percent and price up 1.5 percent. In Emerging markets, underlying sales growth was 8.4 percent with volume growth of 4.8 percent and price increase of 3.5 percent.

The maker of Knorr soup and Lipton tea noted that consumer demand remained fragile and volume growth was barely positive in its markets. Many emerging markets continued to be weak with currency devaluation pushing up the cost of living and squeezing disposable incomes.

In Personal Care, deodorants benefited from the continued success of the dry spray launch in North America and the roll-out of the compressed formats into Latin America.

Ice cream delivered very strong growth in the Refreshment category, helped by better weather than last year.

Geographically, growth increased in Asia/AMET/RUB, driven mostly by volume. China delivered double-digit growth, as it lapped the prior year trade de-stocking, along with rapid development of on-line sales.

Latin America delivered double-digit underlying sales growth across all categories, including strong pricing to recover higher input costs. Also, North America returned to growth driven by both volume and price.

Ice cream growth accelerated in Europe, driven by successful innovations and helped by good weather in southern Europe.

The company announced a third-quarter interim dividend of 0.3020 euros per Unilever N.V. ordinary share, and 0.2259 pounds per Unilever PLC ordinary share.

Looking ahead, the company continues to see soft global markets with no immediate sign of getting help from an improving global economy.

"We will continue to invest steadily behind our brands, innovations and go-to-market capabilities. These actions keep us on track for another year of volume growth ahead of our markets and we now expect underlying sales growth for the year towards the upper end of the 2-4% range," Polman added.

The stock rose 3.4 percent in early trade on the LSE to 2,884.00 pence.