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Unilever sales meet estimates as prices increase

Jul 20 2017 08:59
Thomas Buckley, Bloomberg

London - Unilever reported second-quarter sales growth in line with estimates as hot European weather boosted sales of Ben & Jerry’s and Magnum ice-cream brands and the company raised prices to offset stagnant volume.

Underlying revenue rose 3%, London- and Rotterdam-based Unilever said on Thursday, compared with the 3.1% median estimate of analysts surveyed by Bloomberg. Growth accelerated slightly from the first quarter’s 2.9% uptick. The volume sold in the period was unchanged, with price increases of 3% accounting for the growth in sales.

“We anticipate accelerating growth in the second half of the year driven by the phasing of our innovation plans and a step-up in brand and marketing investment,” CEO Paul Polman said in a statement.

Unilever shares have gained about 25% since a takeover approach by Kraft Heinz was made public in February. The company pledged greater profitability after spurning the bid, increased its dividend payment by 12% and has committed to repurchasing €5bn worth of stock.

Companies in the consumer-goods space are increasingly under pressure to deliver shareholder returns, with activist investors Dan Loeb and Nelson Peltz waging campaigns at Unilever rivals Nestlé and Procter & Gamble.

READ: Nestlé gives an inch on share buybacks but Loeb wants more

Unilever said in April it’s seeking to divest its Flora margarine spreads division by the end of the year. The process could fetch an enterprise value of around €6.6bn, a Bloomberg survey of analysts has found.

Underlying sales exclude acquisitions, divestments, and currency fluctuations.

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