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Unilever Sees Underlying Sales Rise 3.5% In Fourth Quarter

By Dayeeta Das
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Unilever Sees Underlying Sales Rise 3.5% In Fourth Quarter

Consumer goods giant Unilever has reported underlying sales growth for the fourth quarter that was in line with estimates, buoyed by strong demand in emerging markets.

Underlying sales rose 3.5%, for the Anglo-Dutch maker of Dove soap, Hellmann's mayonnaise and Tresemmé shampoo, in line with what analysts on average were expecting, based on a company-supplied consensus.

“Early in the year, we refocused the business on competitive growth, and the delivery of profit and cash as the best way to maximise value," commented chief executive Alan Jope. "We have delivered a step change in operational excellence through our focus on the fundamentals of growth. As a result, we are winning market share in over 60% of our business in the last quarter, on the basis of measurable markets."

Jope said the company was winning market share in over 60% of its business in the last quarter, on the basis of measurable markets.

Longer-Term Targets

Setting out its longer-term targets, Unilever said it would aim for underlying sales growth ahead of its markets, delivering growth in the range of 3% to 5%, as well as profit growth ahead of sales growth.

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The coronavirus pandemic has boosted sales of packaged food companies like Unilever, Nestlé and Kraft Heinz , though Unilever continued to be hurt by sharp declines in foods served in public places such as on beaches and at restaurants.

"While volatility and unpredictability will continue throughout 2021, we begin the year in good shape and are confident in our ability to adapt to a rapidly changing environment," Jope added.

In November, the company ditched its Anglo-Dutch dual-headed structure in favour of a single corporate entity based in London.

Analyst Viewpoint

Commenting on Unilever's performance, Russ Mould of AJ Bell said, “Unilever is seen as the market’s old reliable friend, trustworthy and dependable no matter the economic backdrop. Coming in short of full year sales forecasts is not the done thing and so Unilever is somewhat punished by investors today for not delivering the required goods.

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“Fundamentally Unilever’s ability to keep thriving despite operating in a highly competitive marketplace is down to the strength of its brands, distribution power and marketing expertise.

“Achieving a target of underlying sales progression of 3% to 5% a year will take hard work and the shape of the business is likely to keep changing as it focuses on more prosperous areas. That means a mixture of acquisitions and disposals in the coming years.”

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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