Unilever reports profit surge, strong emerging markets

THE HAGUE, Nov 4, 2010 AFP © - Unilever, a global group supplying food, household products and cosmetics reported a 19-percent profit jump in the third quarter on Thursday, saying that sales growth was coming mainly from emerging markets.

Unilever.co.uk

The company provides routine products for households and its results provide insight into how habits in homes in emerging markets change as living standards rise and how people cut back when times are hard, in austerity-hit countries in western Europe for example.

In western Europe, where many countries are overshadowed by radical measures to curb state overspending, Unilever spotlighted strong sales of ice cream, and deodorants.

Net profit was 1.25 billion euros (1.75 billion dollars) from 1.05 billion euros at the same time last year, and sales volume rose by 4.8 percent which was less than the growth in the first half of the year.

Overall sales by value rose by 13.2 percent to 33.443 billion euros.

Chief executive Paul Polman said that the growth of sales volumes had come mainly from emerging markets.

Sales in the Asia-Pacific region had risen by 8.8 percent but in Europe by only 0.6 percent.

Market growth in developed countries continued to be "sluggish" whereas "the emerging markets continue to grow strongly albeit more slowly than the levels seen earlier in the year," the group said.

The company had improved its share of markets notably in southeast Asia, Saudi Arabia, South Africa and India where "actions taken to respond to competitive pressure resulted in an improved performance" across product lines.

"Asia and Africa continue to be the engines of growth in the region with double diigit volume growth" so far this year, it said.

Sales volumes had risen by more than 2.0 percent in North America," a solid performance given the difficult market conditions."

However "Latin American markets grew strongly and we gained volume share whilst delivering underlying sales growth at around 7.0 percent."

In western Europe, volume growth was positive and the group had increased its share of the market, but price levels were weak because of competition from promotions.

"Conditions in Greece, Spain and Ireland remain difficult."

But "our ice cream business peformed well, contrubuting to underlying sales growth" and "deodorants also continued to progress well."

The price of shares in the group rose by 3.87 percent to 22.13 euros.