Unilever looking strong

Underlying sales to emerging market increased 11.4 per cent, representing 55 per cent of total turnover. In contrast, developed markets remained subdued with lower volumes and sales growth of just 1.6 per cent.

Across the group, underlying sales rose by a healthy 6.9 per cent and were nicely balanced between volume growth of 3.4 per cent and price growth of 3.3 per cent. Meanwhile, core operating margins were up 30 basis points to 13.8 per cent.

While the personal care and home care categories were the stars, boasting double-digit growth, food remained a drag, rising just 2 per cent. As such, chief executive Paul Polman says Unilever will continue to shed smaller brands that have no possibility for global expansion and "diluted top and bottom lines". Instead, Mr Polman says Unilever is investing in product innovation and focusing on its core brands and higher-margin business, as evidenced by the disposal of Skippy peanut butter this month and ConAgra Foods last year.

Higher prices and savings programmes largely offset weakened consumer confidence, slower emerging markets growth and commodity cost inflation, which is expected to be in the low to single digits this year. This focus on cost control and pricing discipline has enabled Unilever to cut its net debt and the company could potentially have net cash in two years. But, asked whether it would would look at the dividend payout ratio or consider a share buyback, management said now was "not the right time to look at different funding financial strategy".

The results followed fresh research from Nielsen suggesting 64 per cent of global consumers are now trading down to cheaper store brands or value options. While this might be bad news for companies like Unilever, the research also inferred that an equal number of consumers like new products and half are willing to switch to new brands.