LONDON — Boosted by divestitures, Unilever reported its profits rose 51 percent to 1.19 billion euros, or $1.57 billion at average exchange, in the fourth quarter and by 28 percent to 5.29 billion euros, or $7.78 billion, for full-year 2008.
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The company reported sales increases of 3 percent to 10.15 billion euros, or $13.39 billion at average exchange, in the fourth quarter and 1 percent to 40.52 billion euros, or $59.62 billion, for the full year. Revenues rose 4 percent and 6 percent at constant exchange, respectively. The firm’s personal care category, which includes Dove, Sunsilk and Axe/Lynx, reported that underlying sales grew 6.6 percent to 11.38 billion euros, or $16.75 billion, in 2008.
However, the consumer goods giant’s chief executive officer, Paul Polman, stated it would be “inappropriate” to offer guidance for this year’s performance or to reaffirm targets for 2010. Unilever had previously said it aimed to generate operating margins in excess of 15 percent by 2010.
“The short-term economic outlook is volatile, and the impact on consumers is unclear,” Polman said during a conference call with analysts Thursday. “In these exceptional times, I believe that it is not helpful to provide top- and bottom-line guidance for 2009, let alone for 2010.
“No one can be clear about the exact extent of the current recession or the speed of recovery,” he continued. “Secondly, the 2010 targets were set at a very different time in very different circumstances. We need to ensure that we focus on creating long-term value in today’s climate.”
Polman said Unilever’s 2009 priorities will be to focus on reigniting volume growth while protecting cash flow and margins. With full-year 2008’s 7.4 percent uptick in underlying sales strongly driven by price increases introduced to counteract the impact of commodity cost inflation, volume was put under pressure.
“These actions have negatively impacted volume growth,” said Jim Lawrence, Unilever’s chief financial officer. “As a number of markets have gone into recession and consumers have adjusted their spending, the effect on volume has been more pronounced. Trade destocking in the fourth quarter has been a further drag on volume.”