Unilever reports 5% profit rise to 4.48 billion euros

THE HAGUE - Food and cosmetics giant Unilever reported Wednesday annual net profits up 5.0 percent on 2011 to 4.48 billion euros, with turnover hitting 50 billion euros for the first time.

Unilever global sales were 51.3 billion euros, up 10.5 percent, and the company said the outcome was an important step towards its target of sales of 80 billion euros.

"There is no room for complacency," Unilever chief executive Paul Polman nevertheless warned in a statement.

"Markets will remain challenging, with intense competition and volatile commodity costs."

"We remain focused on achieving another year of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow."

Unilever's fourth-quarter sales rose by 7.8 percent, thanks largely to volume growth of 4.8 percent, higher than the 6.3 percent expected on average by analysts interviewed by Dow Jones Newswires.

Underlying sales growth in emerging markets was 11.4 percent, representing 55.0 percent of the multinational's global turnover.

"Emerging markets again contributed double-digit growth helping us exceed 50 billion euros turnover, an important milestone in our journey to double the size of Unilever from 40 billion euros to 80 billion euros whilst reducing our environmental impact," Polman said.

The company saw strongest sales growth in Asia-Africa, where the figures rose by 10.6 percent, while Americas sales were up 7.9 percent.

Performance in Europe was "sluggish", the company said, with sales up 0.8 percent.

This reflects "the fragile state of consumer confidence and intensely competitive markets," Unilever said.

Nevertheless, "we have responded to the needs of hard-pressed consumers by providing good quality products at low price points."

"Throughout 2012 our markets experienced markedly different dynamics as emerging markets grew in both volume and value terms whilst developed market value remained subdued, with volumes lower than prior year," Unilever said.

"There's a very low consummer confidence, especially in Europe," Polman told journalists in a telephone press conference.

"The austerity measures are affecting the consummers... We're prepared once more to face a challenging year."

The Anglo-Dutch company said that Magnum ice creams and Sunsilk hair products had become "billion-euros brands", bringing the company's total of such brands to 14.

"We continued to invest behind our brands, again increasing advertising and promotions spend," by 470 million euros, Polman said.

One of the world's leading suppliers of consumer goods, Unilever owns a wide variety of brands including Knorr, Lipton, Dove and Vaseline. It employs 167,000 workers in 100 countries.

Performance also varied across product ranges, with sales of personal care and home care up 10 percent worldwide, while food sales rose just 1.8 percent.

Unilever announced earlier this month that it was selling its Skippy global peanut butter brand for about 700 million dollars (526 million euros), but that will count towards 2013 accounts.