Unilever has said that it will concentrate on driving volume growth and improving its operating margin in the year ahead, after reporting underlying sales growth of 3.7% in its full-year returns.
Sales across the entire business rose by 4.3% and emerging markets grew by an even faster rate – at 6.5% – Unilever said. But the company’s prices were up 5.4%, in part due to a 1% increase in volumes and in part because of cost pressures prompted by the UK’s decision to leave the European Union (EU).
In October, the maker of Marmite and Ben & Jerry’s ice cream found itself in a public dispute with the UK’s largest supermarket over wholesale increases to the price of its products.
Unilever’s head of finance called the move a ‘normal’ response to fluctuations in currency; the pound had fallen from $1.49 before the result of the EU referendum was announced to $1.21 at the time.
But Unilever’s food business recovered, sustaining its return to growth with good performance in dressings, driven by easy-squeeze packs and the release of new organic varieties. Hellmann’s and Knorr both delivered another year of strong growth by successfully modernising their ranges, with extensions into organic variants with packaging that highlighted the naturalness of their ingredients.
Hellmann’s has made the switch to using exclusively cage-free eggs for its mayonnaise and mayonnaise-based dressings in the US – three years ahead of schedule.
And Knorr’s digital campaign, titled Love at First Taste, reached more than 100 million people.
Sales in spreads declined, as modest growth in emerging markets was offset by the continued but slowing decline in developed markets.
Despite strong performance in emerging market, Unilever said that ‘the economic crisis in Brazil and removal of 500 and 1,000 rupee notes from circulation in India presented significant additional headwinds’.
In all, Unilever’s group-wide free cash flow was €4.8 billion, in line with ‘very strong’ performance in the previous year.
© FoodBev Media Ltd 2019