Unilever Q1 sales drop as it prepares division sell-off

Anglo-Dutch consumer giant Unilever Thursday revealed first quarter sales fell compared to last year, announcing a six billion euros ($7.4 billion) buy-back scheme ahead of the spin-off of its spreads division.

Turnover in the first three months was down 5.2 percent to 12.6 billion euros, falling from 13.3 billion euros reported in the same period in 2017.

But chief executive Pol Polman voiced confidence as the company prepares for some major shake-ups in its 88-year history.

"The first quarter demonstrates another good volume-driven performance across all three divisions," Polman said in a statement, highlighting a 4.0 percent sales growth in emerging markets.

He revealed that a six billion euros buy-back programme would be launched in May "to return the expected after-tax proceeds from the spreads disposal. We are raising the dividend by 8.0 percent, reflecting confidence in our outlook."

The company said in December that it had sealed a 6.8 billion euro deal to sell its spreads division to US private equity giant KRR, and Polman said the move was expected to be completed "in the middle of the year."

Based in Rotterdam, Unilever was founded in 1930 after the Dutch margarine producer Margarien Unie merged with British soapmaker Lever Brothers.

It has over 400 brands in its portfolio, including household names like yeast extract Marmite, PG Tips tea and Persil washing powder, Knorr soup as well as Dove beauty products and Magnum ice-cream.

Until now, it has maintained a dual-headed structure, with listings on the London, Amsterdam and New York stock exchanges.

But last month, the company also announced it was choosing The Netherlands over London to host its headquarters, dealing a blow to Britain's efforts to keep multinational companies onside following Brexit.

The move came in the wake of a failed hostile bid by US rival Kraft Heinz last year, which analysts said played a key role in Unilever's decision as the Netherlands has stronger rules to protect companies against takeovers.

Unilever employs some 169,000 people around the world, but the change in its structure will have no impact on its 7,300 employees in Britain and 3,100 in the Netherlands, the company said.