Unilver's path to growth pays off

12 April 2012

CONSUMER products giant Unilever served up a treat for investors today by raising its earnings goal after seeing an improvement in sales.

The Anglo-Dutch group said it now expected earnings growth for 2002 to be in the 'mid-teens' compared with an earlier target of low double-digits.

Chairman Niall FitzGerald said the group's focus on its leading brands was helping it to withstand the tough economic environment.

The success of Persil washing powder, Dove shampoo and Birds Eye frozen food helped underlying sales climb 3.3% in three months to 30 June. The growth, most notable in Asia Pacific and Latin America, compared with a jump of just 1.8% for the first quarter of the year.

Unilever has been focusing on its 400 leading brands under a 'Path to Growth' strategy that has seen a host of weaker products sold off.

Mr FitzGerald said the group was seeing a strong increase in profitability as sales rose and savings from the restructuring flowed through.

Net profit in the second quarter climbed 31% to £670m before one-off costs, fuelling a 33% jump to £1.25bn for the first half as a whole.

Sales of Unilever's leading brands were up 4.4% in the second quarter and Mr FitzGerald said the growth rate should be at 4.5% to 5% for the year.

He said: 'We have now reached the mid-point in the Path to Growth strategy and we continue to be confident about delivering our programme on time and in full.'

The update was welcomed in the City and the group's shares, which have fallen 8% since the start of the year, were up more than 5% in early trading today.

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