LONDON — Unilever reported Thursday its first-quarter profits declined 43 percent to 803 million euros, or $1.05 billion at average exchange, compared with the year-ago quarter, when profits were bolstered by divested businesses.
Before restructuring, disposals and one-off items, net profits declined 13 percent to 917 million euros, or $1.2 billion. The Anglo-Dutch consumer goods giant said sales dropped 1 percent to 9.5 billion euros, or $12.4 billion. Underlying revenues were up 4.8 percent in the quarter boosted by price increases, whereas volume was down 1.8 percent. The firm’s personal care business, which includes brands such as Dove and Sunsilk, reported underlying sales growth of 4 percent to 2.807 billion euros, or $3.67 billion.
“First-quarter results were solid given today’s trading environment,” stated Paul Polman, Unilever’s chief executive officer. “We have made good progress implementing plans to reignite volume growth, building on existing strengths and correcting competitive gaps. We will further step up innovation and brand support from the second quarter and expect this to drive an improved volume performance.”
The company, which also manufactures products ranging from Domestos bleach to Ben & Jerry’s ice cream, reported operating profits in the quarter were down 32 percent to 1.23 billion euros, or $1.6 billion.
“Lower volumes and the lost profit contribution from disposed businesses reduced operating profit by around 150 million euros [$196.2 million],” said Jim Lawrence, Unilever’s chief financial officer, during a conference call with analysts Thursday. “Price increases boosted operating profit by over 600 million euros [$784.8 million], but costs were higher by around 900 million euros [$1.18 billion].”
By geographical zone and on an underlying basis, sales in Asia, Africa and Central and Eastern Europe grew by 9.5 percent; the Americas saw revenues climb 7.2 percent, while Western Europe reported a decline of 2.8 percent.
While Unilever executives didn’t offer full-year forecasts, Polman said the firm is operating under the assumption that markets will be soft. “Never has consumer behavior changed so rapidly,” he said. “We are clearly seeing a premium placed by consumers on value.”