Unilever bounces back after spat with investors

Ice cream sales soar as firm seeks to defuse row over fat cat pay and London HQ

I DON’T REGRET TRYING TO GO DUTCH, SAYS UNILEVER BOSS

Yesterday’s Daily Mail

UNILEVER sought to put rows over fat cat pay and its headquarters behind it as it posted a solid rise in sales.

Just a day after chief executive Paul Polman spoke to the Mail about his botched attempt to base the company in the Netherlands, the Marmite and PG Tips maker said business picked up in the third quarter as it sold more products at higher prices.

Sales of Magnum ice creams and other cold treats were boosted by the unusually hot summer, Unilever said, while the end of trucker strikes in Brazil also gave it a boost.

But shares fell nearly 1pc after it revealed the economic crisis in Argentina has cost it £160m. Sales of £11bn for the three months to September 30 were also short of analysts’ expectations.

The figures came less than two weeks after Unilever ditched plans to abandon its London headquarters and base itself solely in Rotterdam, following a backlash from shareholders. The company has also been rocked by an investor revolt over fat cat pay, with MPs this week branding Polman’s rewards ‘unjustifiable’.

The 62-year-old Dutchman was handed £10m last year and could earn nearly £13m this year.

Speaking to the Mail on Wednesday, Polman (pictured right) said the decision to propose a move to the Netherlands was the ‘right one’. He declined to comment on the matter yesterday, instead sending out finance chief Graeme Pitkethly to speak to analysts and the media about its results.

But with underlying sales up 3.8pc in the third quarter, Polman said in a statement: ‘Growth accelerated in the third quarter across all divisions.

‘We were able to increase prices while still maintaining good volume growth, which reflects the strength of our brands. Our focus on building our business for the long term continues to deliver high-quality growth.’

Unilever sold 2.4pc more goods in the third quarter while prices rose 1.4pc – far better than the 0.2pc increase seen in the first half. Despite the upbeat figures, Unilever faced fresh questions over the headquarters U-turn.

Investors have questioned the future of Polman, Pitkethly and chairman Marijn Dekkers in the wake of the debacle.

Pitkethly, 51, said: ‘We don’t regret having brought the proposal forward but we did learn a lot that will help us consider what alternative routes we have.’

He said the board was reviewing the situation, but would not say if it would now propose basing itself in London instead. Referring to Polman and Dekkers and the plan to move headquarters, Russ Mould, investment director at AJ Bell, said: ‘Their leadership must be called into question after so clearly misjudging the market mood.’ For the first nine months of the year, Unilever said sales stood at about £34bn. That was 5.3pc lower than the previous year and came after it had to absorb £164m in costs from hyperinflation on the Argentinian peso. James Edwardes Jones, of RBC Capital Markets, added: ‘Unilever will, we imagine, be pleased with these results.’