Further Progress by Unilever in 2013
Although turnover fell by 3% to Eur49.8 billion, due to adverse currency exchange factors and divestments, Unilever has reported underlying sales growth of 4.3% with volume sales up 2.5% for 2013. Emerging markets, with underlying sales growth of 8.7%, drove the performance. Operating profit rose 8% to 7.5 billion and net profit was up 9% to Eur5.3 billion. The core operating margin improved by 40bps to 14.1% fuelled by gross margin up 110bps.
Unilever’s foods business increased underlying sales growth by 0.3% during 2013 to Eur13.4 billion as core operating margins improved by 20 bps. Unilever’s refreshment arm saw underlying sales growth of 1.1% to Eur9.4 billion but core operating margins fell by 20 bps.
Unilever’s markets in Europe remain flat with the early signs of stabilisation in southern Europe offset by slowing growth in northern Europe. Sales performance, whilst negative, was competitive. Declines in spreads weighed on performance in Germany and the Netherlands but the United Kingdom delivered the twenty fifth successive quarter of growth. Full year core operating margin was up 70bps driven by higher gross margin and lower overheads which primarily reflect the results of restructuring activities.
“2013 provides further evidence of the progress we are making in transforming Unilever into a sustainable growth company,” says Paul Polman (pictured), chief executive of Unilever. “We have delivered another year of consistent underlying sales growth and margin expansion coupled with strong cash flow. This has been achieved despite significant economic headwinds and highly competitive markets and reflects the benefits of strong margin accretive innovations and active cost management.”
He adds: “Looking forward, we anticipate ongoing volatility in the external environment and are positioning Unilever accordingly. Although the investments we have made over the last five years ensure that we are well placed, we are determined to make Unilever even more agile and to fund further growth opportunities by driving out complexity and cost.”
