Consumer goods group Unilever Plc/NV beat forecasts with a 1.8 per cent rise in fourth-quarter underlying sales today, promising its new-found optimism and recovery under new chief executive Paul Polman will continue into 2010.
Mr Polman's policy to spend more on marketing and cut prices to entice cash-strapped shoppers drove a third successive quarter of sales volume growth despite sluggish economies while falling commodity costs helped push up the group's profit margins.
Anglo-Dutch Unilever, the world's third-biggest food and consumer goods group, reported its fourth-quarter underlying sales rose 1.8 per cent compared to a consensus of 1.4 per cent, while 2009 saw a rise of 3.5 per cent against a consensus forecast for a 3.4 per cent rise.
"We will continue to focus on volume growth as the main driver for long term value creation, whilst delivering steady and sustainable year-on-year improvement in operating margins and strong cash flow," Mr Polman said in a results statement.
The company, which makes Hellmann's mayonnaise and Sunsilk shampoo, saw underlying volume growth of 2.3 per cent in 2009 which reached 5 per cent in the fourth quarter with this seen across most key categories and countries as the group cut prices to reflect the fall in commodity prices.
The results come after US rivals Procter and Gamble and Colgate-Palmolive reported strong growth in the final quarter of 2009, and European rival Henkel posted a strong close of 2009 due to cost cutting.
Unilever posted underlying 2009 earnings of €1.33 per share, beating a consensus forecast of €1.29 collated by Thomson Reuters I/B/E/S.
Unilever shares outperformed the UK market by 8 per cent in 2009 as Polman's strategy gained favour, but have only traded in line with the FTSE 100 index and the DJ European Food and Beverage index so far this year.
The Plc shares closed yesterday at £19.34.
Reuters