Unilever sales rise as markets revive

Anglo-Dutch company sees its shares jump more than 4% to a record high yesterday after trough in 2014

Unilever reported better than expected first quarter sales and struck a positive tone on the rest of the year, citing brighter signs in major markets such as the United States, China and India.

The Anglo-Dutch maker of Dove soap, Lipton tea and Ben & Jerry’s ice cream saw its shares jump more than 4 per cent to a record high yesterday after its first-quarter report showed progress after a tough 2014. Last year it was hammered by weakening emerging markets and currency devaluations.

“We are overall starting to see more tailwinds than headwinds,” Chief Financial Officer Jean Marc Huet said.

Foreign exchange rates, for example, are expected to help 2015 sales by about 8 to 9 per cent at current rates, he said, after reducing 2014 sales by 4.6 per cent.

Huet said that Unilever’s full-year sales growth would probably come in at the upper end of its prior stated goal of 2 to 4 per cent.

In the first quarter, underlying sales rose 2.8 per cent, excluding the impact of currency moves, acquisitions and disposals. Analysts on average were expecting a gain of 2.1 per cent, according to a company-supplied poll.

The company cited a better than expected performance in China, saying that sales were stabilising, although at “much lower levels of growth than we’ve used to”.

In the final three months of 2014, Unilever’s sales in China fell 20 per cent as retailers cut inventories to deal with a slowing economy. Huet said Unilever was now past the worst of the impact from that reduction in stock levels.

Unilever gets more than half its sales from emerging markets, and so was particularly hurt by the slowdown last year.