LONDON — A tough worldwide economic climate, coupled with increasing competition, dented first-quarter profits at Unilever, the company said in a statement Wednesday.
Profits dropped 15.9 percent to $694 million, or 583 million euros, from $825 million, or 693 million euros. All figures have been converted from the euro at current exchange.
Sales, what the firm calls turnover, in the period fell 2.2 percent to $11.7 billion, or 9.8 billion euros, from $11.9 billion, or 10 billion euros, including the impact of disposals. As reported, Unilever is in the midst of an ongoing program to slim down its portfolio and focus on core brands.
Underlying sales for the quarter grew by 0.4 percent, while sales of the leading brands grew 1.3 percent, with pricing flat, the statement said.
“We are not happy with the short-term sales performance, and action is being taken to address this,” said Niall FitzGerald, the outgoing chairman of Unilever plc. As reported, FitzGerald will retire in September and be replaced by Patrick Cescau, who joined Unilever in 1973.
“In the first quarter, we have seen a continuation of a tough business environment that we saw for much of 2003, with lower and historical market growth. While there are clear signs of an improving economic outlook, we are also currently seeing an increased level of competitor activity in some key markets,” the statement said.
Unilever’s struggling prestige product line, part of the personal care division, remains under scrutiny. In North America, where sales declined by 4 percent, prestige products and Slim Fast together diluted growth by 2.1 percent.
“With a new leadership team in place in prestige fragrances, we have continued to make good progress with our restructuring program,” the company said.
“While in the first quarter there is still a year-on-year decline, our focus on a core portfolio of brands and more profitable channels, and the tougher comparison in the early part of the year is expected to lead to an improved performance in the second half,” the statement added.
— Samantha Conti