Solid Unilever Ice Cream Sales in Northern Europe Offset by Soft Sales in South During Third Quarter
“Good progress in slower markets” was among the high points of the Unilever’s third quarter results for 2013, which otherwise was rather lackluster as the international consumer products company’s foods and refreshments divisions both saw sales slide. Revenues in the ice cream-dominated refreshment segment dipped 3.9% to EUR 2,588,000, while turnover in the food sector fell 10.1% to EUR 3,201,000.
Emerging market sales were up 8.8% during the first nine months of the year, compared to 5.9% for the third quarter. Overall turnover decreased by 2.0% to EUR 38.0 billion (including a negative currency impact of -5.0%), compared to a third quarter decrease in revenues of 6.5% to EUR 12.5 billion (including a negative currency impact of -8.5%.
Reviewing the total picture, which includes personal care and home care products sales, CEO Paul Polman stated:
“Underlying sales growth of 4.4% over the first nine months is ahead of our markets. Emerging markets continue to be the main driver of our growth and, despite the current slow-down, they remain a significant growth opportunity which the company is well placed to capitalize on.
“We have not yet seen an improvement in market conditions in North America or Europe,” he continued. “We will continue to accelerate our innovations, backed with competitive support, to build long term growth and value. We expect to report a sequential quarterly improvement in underlying sales growth in the fourth quarter driven by a strong innovation pipeline. We remain focused on achieving another year of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow.”
Polman reported that the performance in the refreshment division was disappointing due to a number of unrelated factors. In the ice cream sector, sales benefited from good summer weather in northern Europe. This was offset, however, by weaker performance in southern Europe and particularly in Italy, which accounts for Unilever’s biggest European ice cream business.
“North America was impacted by our decision to withdraw from some low margin products,” explained the ceo. “Despite these headwinds, key innovations such as the launch of Fruttare in North America, the global relaunch of Cornetto and Magnum ‘5 Kisses’ continued to do well.”