Consumer goods giant Unilever posted a 8.3 per cent rise in third-quarter underlying sales this morning, at the top end of forecasts, and upgraded its 2008 outlook to see sales growth “well in excess” of its target.
The quarterly sales growth at Anglo-Dutch Unilever, the maker of Sunsilk shampoo, Knorr soups and Ben & Jerry's ice cream was towards the top of analyst forecasts of 5 to 8.6 per cent growth and beat consensus of 6.7 per cent.
"This year we now expect to deliver underlying sales growth well in excess of our long-term target range of 3 to 5 per cent together with an underlying improvement in operating margin for the year," said Chief Executive Patrick Cescau in a statement.
The world's third-biggest food and consumer goods group had previously said it expected sales growth above the target. In the past it has struggled to match the sales growth of its key European rivals Nestle and Danone.
"The difference this time is that the margin improvement of 30 basis points was unchanged but the organic growth accelerated to reach 'top-of-peer-group' levels of Nestle and Danone," said independent analyst James Amoroso.
Unilever Plc shares rose 2.5 percent to £13.77 by 8.15am in a UK market up 0.9 per cent after outperforming the FTSE 100 index by 6 per cent so far this year but lagging the DJ food and beverage index by 13 per cent.
The combination of price rises and cost saving helped push quarterly underlying operating margins up 0.3 percentage points.
But Unilever again relied heavily on price rises due to rising commodity prices with only 0.6 percentage points of the third-quarter rise coming from higher volumes while Nestle's saw 3.2 percent and Danone 2.6 percent volume growth in the quarter.
Unilever's quarterly sales rise came after 7.2 and 6.8 percent growth in the first and second quarters, making a nine-month rise of 7.4, as it closes the gap on Nestle at 8.9 per cent, Danone 9.2 and Reckitt Benckiser at 10.
The group, whose 400 brands include Lipton tea, Lux soap and Omo detergents, saw quarterly earnings per share reach €0.59, compared to forecasts of €0.30 to €0.68 and a consensus of €0.45.
The group announced a first-half dividend of €0.26 per Unilever NV share and 20.55 pence per Plc share.
Unilever shares trade on 12.5 times forecast 2009 earnings behind the faster-growing Danone on 14.1 and Nestle on 12.9.
Reuters