Sales numbers boost Unilever’s argument to go it alone

LONDON: Unilever reported a surprise pick up in quarterly sales growth on Thursday, boosting its argument that it can improve performance on its own after spurning a $143-billion takeover offer from Kraft Heinz in February.

The maker of Knorr soups and Dove soap, which earlier this month announced a business revamp in response to the takeover interest, said improving economies and rising commodity costs helped it to lift prices in the first quarter. That offset a small dip in the volume of goods sold.

Chief financial officer Graeme Pitkethly said there was always a delay between economic improvements and a pick up in household spending and so Unilever expected a better performance in the second half of the year, helped also by its own easier yearon-year comparisons.

“We are seeing positive signs in the economy overall,” he said, talking about a “bottoming out” of currency devaluations in places such as India, Indonesia and Brazil. Unilever’s underlying sales growth of 2.9% topped analysts’ estimates of 2.0% and 2.2% growth in the fourth quarter.

Growth was led by emerging markets, while pricing added 3% and the dip in volumes took off 0.1%. The results, which outshone those of rival Nestle, sent Unilever’s shares up 1.5% to 39.94 pounds, leaving them more than 19% higher than before Kraft’s unsolicited, and swiftly rejected, offer.

Nestle, the world’s largest packaged food company, posted sales growth of only 2.3%.

At Unilever, food was the weakest division, coming in flat, whereas the ice cream and tea business rose 5.4% and home and personal care products rose 3.4%.