LONDON -- Unilever
Unilever, which counts Lipton, Sunsilk, and Lux among its biggest brands, kicked off the year with strong 2011 results.
In February, the group reported full-year highlights including annual sales up 5% to 46.5 billion euros, underlying sales growth of 7% (led in large part by emerging markets), and core earnings per share up 4% to 1.41 euros.
In April, after the group closed out its first quarter of 2012, its momentum appeared to continue. Unilever reported turnover advancing nearly 12% and underlying sales growth of 8.4% -- good news for shareholders waiting to see if the firm could withstand a global slowdown.
Paul Polman, chief executive officer, reflected:
We have made a good start to the year which underlines the progress that we have made in transforming Unilever into a sustainable growth company. Emerging markets, now 56% of the business, have again delivered strong growth. The external macro-economic environment remains difficult and higher input cost headwinds persist.
Fast-forward to July. Despite a slowdown in China, Unilever plowed ahead, delivering strong emerging-market growth and avoiding the profit warnings of rivals Danone and P&G. Unilever reported second-quarter underlying sales up 5.8%, which beat a company-compiled consensus of 4.8%. The company also maintained its forecast for modest profit-margin improvements for the year.
More recently in October, Unilever announced it had experienced sustained momentum across its business during the third quarter. Underlying Q3 sales growth slowed a bit to 5.9%, but this pace was ahead of analyst estimates. In fact, sales growth within emerging markets actually accelerated to 12%.
Unilever also announced a quarterly interim dividend of 0.24 euros per share and said it was looking for a buyer for its Skippy peanut butter brand, which could fetch between $300 million and $400 million.
Paul Polman commented: "In this challenging environment there is no change to our objectives, which remain: profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow. For 2012 we remain on track to deliver a modest improvement in core operating margin."
Unilever continues to execute well under Paul Polman, but it does look like P&G is taking steps to improve its recently sluggish performance. That's likely to mean even greater competitive pressures in the sector.
Unilever's strong share-price performance this year has pushed its dividend yield down to 3.4%, so dividend investors will be counting on Polman to continue to execute his plan well to ensure rising dividend payments in the years ahead.
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