Unilever has announced its results for the first quarter of 2018 with an underlying sales growth of 3.7% compared to the prior year.
Following on from the group’s fourth quarter 2017 results, Unilever also saw an increase in emerging markets with growth of 5.1% from the same quarter last year.
Commenting on the results, CEO Paul Polman said: “The first quarter demonstrates another good volume-driven performance across all three Divisions. The broad-based growth, including over 4% volume growth in emerging markets, shows that the ‘Connected 4 Growth’ programme is working and enhancing our long-term compounding growth model.”We are further improving the quality and speed of our global and local innovation as a result of a more agile, consumer-facing organisation. At the same time, we are maintaining strong delivery from our savings programmes and expecting to complete the exit from spreads in the middle of the year.
“For the full year, we continue to expect underlying sales growth in the 3%–5% range and an improvement in underlying operating margin and cash flow that keep us on track for our 2020 goals. We intend to start a share buy-back programme of up to €6 billion in May to return the expected after-tax proceeds from the spreads disposal. We are raising the dividend by 8%, reflecting confidence in our outlook.”
Analysis: Steve Clayton, manager of the HL Select UK Shares funds
“Unilever has seen a welcome return to growth in underlying volumes in the first few months of 2018. Underlying sales growth for the continuing business was 3.7%, almost all of it coming from volumes. Emerging markets led the way, comfortably outpacing the developed markets. Beauty, Personal Care and Home Care were the top divisional performers, with the Dove and Omo Naturals brands making headway around the world.
“The underlying performance was strong, and the board have announced an 8% hike in the quarterly dividend, highlighting Unilever’s long term track record of rewarding shareholders. The disposal of the Spreads division will see a further €6bn returned to shareholders via a share buy-back programme, to commence shortly.
“This was textbook stuff from Unilever, with the group’s diversity of brands and markets serving it well. The improvement in volume growth is very welcome and investors will applaud this improved quality of growth. In common with many other consumer stocks, Unilever’s shares have given up some ground in recent months and these results should be a welcome reminder of the long term attractions of the business.”
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