Unilever raises prices and sales as it fights back from Kraft bid
- Author: Rita Burton Apr 23, 2017,
Apr 23, 2017, 2:11
The results could boost investor enthusiasm for Unilever, whose shares have remained higher since February when it received, and swiftly rejected, a $143bn (€133bn) takeover offer from rival Kraft Heinz.
Turnover increased 6.1% to €13.3bn ($14.3bn), and underlying sales growth was 2.9% with price up 3.0% and volume down 0.1%.
Mr Polman said in the trading update that Unilever is now on track to report a 3% to 5% rise in annual underlying sales growth for 2017, and that the company is hiking its dividend by 12%, "reflecting the confidence in our outlook".
Nestlé shares rose up to 1.1% in Zurich, while Unilever gained as much as 1.6% in Amsterdam.
Nestle and Unilever are joining apparel makers Burberry Group Plc and Ralph Lauren, which are trying to wean themselves off discounting, especially in the US Alcoholic beverage companies such as Diageo Plc are also trying to ride a trend of "premiumization" as consumers shift to fewer but more expensive purchases. And, excluding this unit, Unilever's underlying sales were 3.4%. Its brands range from Dove soap to Ben & Jerry's ice cream.More news: Kylie Jenner and Travis Scott dating; Tyga 'jealous'
Chief Financial Officer Graeme Pitkethly said there was always a delay between economic improvements and a pick up in household spending and so Unilever expected a better performance in the second half of the year, helped also by its own easier year-on-year comparisons.
"We are seeing positive signs in the economy overall", he pointed out, talking about a "bottoming out" of currency devaluations in large emerging markets that are key for Unilever including India, Indonesia and Brazil. Unilever cited gains in its home-and personal-care businesses, while sales were unchanged in the food division.
Sir Kensington's, which has seen strong growth over the past four years, makes mustard, mayonnaise, ketchup, and Fabanaise, a vegan mayonnaise made with aquafaba.
With news that Unilever will sell its spread brands - including Bertolli, Flora, Stork and I Can't Believe it's So Good - the question turns to who will swoop in and take the brands over.
Analysts have called the Kraft Heinz bid a "massive wake-up call" for the company.