How Unilever Has Fared During 2012
LONDON -- Unilever (ISE: ULVR.L) (NYS: UL) , the world's third-largest consumer-goods group after Nestle and Procter & Gamble, has gained 8% to 2,341 pence so far during 2012, making the share one of the year's steadier performers within the FTSE 100. During the same time, the blue-chip index has gained about 4%.
Unilever, which counts Lipton, Sunsilk, and Lux among its biggest brands, kicked off the year with strong 2011 results.
In February, the group reported full-year highlights including annual sales up 5% to 46.5 billion euros, underlying sales growth of 7% (led in large part by emerging markets), and core earnings per share up 4% to 1.41 euros.
In April, after the group closed out its first quarter of 2012, its momentum appeared to continue. Unilever reported turnover advancing nearly 12% and underlying sales growth of 8.4% -- good news for shareholders waiting to see if the firm could withstand a global slowdown.
Paul Polman, chief executive officer, reflected:
We have made a good start to the year which underlines the progress that we have made in transforming Unilever into a sustainable growth company. Emerging markets, now 56% of the business, have again delivered strong growth. The external macro-economic environment remains difficult and higher input cost headwinds persist.
Fast-forward to July. Despite a slowdown in China, Unilever plowed ahead, delivering strong emerging-market growth and avoiding the profit warnings of rivals Danone and P&G. Unilever reported second-quarter underlying sales up 5.8%, which beat a company-compiled consensus of 4.8%. The company also maintained its forecast for modest profit-margin improvements for the year.
More recently in October, Unilever announced it had experienced sustained momentum across its business during the third quarter. Underlying Q3 sales growth slowed a bit to 5.9%, but this pace was ahead of analyst estimates. In fact, sales growth within emerging markets actually accelerated to 12%.
Unilever also announced a quarterly interim dividend of 0.24 euros per share and said it was looking for a buyer for its Skippy peanut butter brand, which could fetch between $300 million and $400 million.
Paul Polman commented: "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."
Unilever continues to execute well under Paul Polman, but it does look like P&G is taking steps to improve its recently sluggish performance. That's likely to mean even greater competitive pressures in the sector.
Unilever's strong share-price performance this year has pushed its dividend yield down to 3.4%, so dividend investors will be counting on Polman to continue to execute his plan well to ensure rising dividend payments in the years ahead.
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The article How Unilever Has Fared During 2012 originally appeared on Fool.com.Jill owns shares in Unilever.Motley Fool newsletter serviceshave recommended buying shares of Unilever. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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