Unilever cites ‘strong, impactful advertising’ for sales boost

Unilever said underlying sales, which excludes foreign exchange as well as acquisitions and disposals, rose 3.6 per cent, ahead of analyst expectations but behind growth of 4.9 per cent a year ago. Total revenues in the first quarter fell 6.3 per cent to €11.4bn, a drop that it attributes to the impact of currency exchange rates.

Unilever increased its investment in “brand and marketing” in the first quarter, compared to a year ago, although it will not release actual figures until its second quarter results. The firm says much of its ad investment will fall in the first half as it looks to support the launch of new products under its Cif, Tresemme, Comfort and Vaseline brands.

“Solid growth of 3.6 per cent was ahead of our markets and shows the benefit of consistent execution of our strategy, even in more difficult market conditions. At the heart of this strategy is sustained investment behind our brands, with strong impactful advertising and bigger innovations,” said chief financial officer Jean Marc Huet, speaking on a conference call this morning (24 April).

He added that Unilever will continue to invest in its brands and has no plans to change its strategy in emerging markets. This despite slowing growth and economic volatility, which forced US rival Procter & Gamble to plan price increases to offset fluctuations in foreign exchange rates and inflation.

Growth in emerging markets, particularly south and south east Asia, continued to slow, with underlying sales up 6.6 per cent. In developed markets, sales were down 0.3 per cent, while in North America that decline was 2.4 per cent.

Unilever also announced plans for a strategic review of its North American pasta sauce business, including the Ragu brand, and its dieting business SlimFast. That could lead to Unilever selling the two brands, although Huet said Unilever remains open to options.