Unilever sales up 4.3%
The company delivered another quarter of growth ahead of markets. Business in emerging markets grew 8.4% driven by underlying volume growth of 5.3%. In developed markets the company declined (1.7)% and within this both Personal Care and Home Care reported growth.
Core earnings per share increased by 3% to €1.58 for the full year, driven by the growth in core operating margin, partially offset by negative foreign exchange movements. In constant currency core earnings per share increased by 10.6%. This measure excludes the impact of business disposals, acquisition and disposal related costs,impairments and other one-off items.
Fully diluted earnings per share for the full year was up 11% at €1.66. This included the profits on disposal of the Skippy and Wish-Bone brands partly offset by a provision for competition investigations.
For the full year gross margin increased 110bps to 41.2% at constant exchange rates. This reflected the impact of margin accretive innovation, disposal of low gross margin businesses and disciplined savings programmes. Advertising and promotions expenditure was up 50 bps, an increase of around €460m, as the company invested to build its brands for the long term. Overheads increased by 20bps primarily due to favourable one-off items in the prior year.Core operating margin was up 40bps at 14.1%.
Although spreads sales were down in the quarter, the company saw an improvement in performance throughout the year. It saw a positive response to the Ramawith Butter in Germany, Bertolli melange in Belgium, the relaunch of Flora in the UK and the Simply Delicious clean label variants of Country Crock and I can't believe it's not Butter in the United States. Nevertheless, spreads sales overall were down due to declining margarine markets.
Savoury growth was driven by cooking products with Knorr jelly bouillon steadily building penetration and baking bags doing particularly well in Latin America with a range of new flavour variants being extended to Mexicoin the quarter. A new vitamin-A enhanced bouillon was launched in Vietnam and the successful What's for Dinner? market development campaign was rolled out to Belgium and the Netherlands and has now been deployed in seven markets.
The performance of soups and sauces in developed markets was weak. Full year core operating margin was up 20bps supported by increased gross margin partially offset by higher advertising and promotions. ■