PARIS — Announcing its third-quarter results, Unilever said Thursday that it expects to beat its forecast for long-term sales growth of 3 to 5 percent, and improve its underlying operating margins for the year.
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Net profits for the consumer products giant jumped 60 percent in the quarter ended September to reach 1.71 billion euros, or $2.58 billion, thanks to business disposals. The lion’s share of the increase comes from Unilever’s sale of its North American laundry business to private equity firm Vestar Capital Partners for $1.45 billion. The deal was completed on Sept. 9. For the nine-month period, Unilever’s net profit increased 22 percent to 4.1 billion euros, or $6.18 billion. Dollar figures are converted at average exchange rates for the respective periods.
Sales for the quarter rose 2 percent to 10.43 billion euros, or $15.71 billion, but were flat for the nine-month period at 30.37 billion euros, or $46.24 billion.
“We have strengthened the business in a tough environment,” Unilever’s group chief executive officer Patrick Cescau stated. “Despite the price rises needed in light of unprecedented cost increases, our volumes are holding up.” Unilever’s personal care category grew 8 percent in the quarter, and by just less than 7 percent for the nine months, bolstered by double-digit growth of the company’s three global deodorant brands, namely Rexona, Axe and Dove.
For the long term, the company’s outlook is relatively bullish. “Our strong balance sheet, financial management and strong cash generation position us well to access capital competitively,” said Jim Laurence, Unilever’s chief financial officer, during a conference call Thursday. “We are set to deliver underlying sales growth for the full year 2008 well in excess of our 3 to 5 percent range.”
In an extraordinary general meeting Wednesday, Unilever shareholders approved the appointment of Paul Polman as executive director, a move that the company expects to take place by yearend.