Unilever, the consumer products firm behind brands such as Flora, Marmite and Persil, saw underlying sales growth beat expectations in the third quarter, helped by a strong performance in the emerging markets.
Turonver increased to €13.4bn during the period, up by 10.3% on the €12.1bn registered in the third quarter of 2011, with a positive impact of 4.1% from foreign exchange and 0.1% from mergers and acquisitions (M&A).
Underlying sales growth was 5.9% with price contributing 2.4% and volumes contributing 3.4%. This is ahead of the 5.0% increase expected by a consensus of analysts, which estimated a 2.7% impact from price and a 2.2% help from volumes.
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Underlying growth in Europe was just 0.9% during the period, while the Americas registered a 4.7% increase. However, the Asia/AMET/RUB region saw underlying sales increase by 10.7%, with particularly good performances seen in Vietnam, Pakistan, India and Indonesia.
Market volumes continued to grow in emerged markets while volumes in developed markets remained below levels in 2011.
Chief Executive Paul Polman said: "I am pleased that we have again reported good quality growth, with volumes ahead of our markets. This consistent performance, despite continued high levels of competitive intensity, depressed economies and increasing global imbalances and uncertainty, shows that the Unilever transformation is well on track and is being embedded deeply in the business."
The company registered strong underlying growth in Personal Care (8.0%), Home Care (11.0%) and Refreshment (6.8%). However growth was negative in Foods (-0.4%) with spreads volumes suffering from high relative pricing in key markets. The company's spreads products include Flora, Bertolli and I can't believe it's not Butter.
Cautious outlook
Polman's outlook statement was a touch cautious, as he said that the environment is likely to remain "challenging" looking forward.
"Commodity cost inflation is high and remains volatile and there is no sign that the level of competition will ease.
"In this challenging environment there is no change to our objectives, which remain: profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow. For 2012 we remain on track to deliver a modest improvement in core operating margin."
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