21/01/2014

Today (21 January), Unilever released its results for the fourth quarter and full year 2013 which show growth ahead of its markets in a tough economic and competitive environment. This demonstrates again that the transformation of Unilever to a sustainable growth company is on track.
Q4 & full year 2013 results

CEO Paul Polman shares his thoughts on the company's performance in 2013 and the good progress it has made in tough market conditions.

Full year highlights

  • Turnover down (3.0)% to €49.8 billion with foreign exchange (5.9)% and net acquisitions & disposals (1.1)%

  • Underlying sales growth 4.3% with volume 2.5% and price 1.8%

  • Emerging markets underlying sales growth 8.7% with volume 4.8%

  • Core operating margin up 40bps at 14.1% driven by gross margin up 110bps

  • Advertising and promotions up 50bps an increase of around €460 million at constant currency

  • Free cash flow of €3.9 billion; core earnings per share up 3% to €1.58

Fourth quarter highlights

  • Underlying sales growth 4.1% with volume 2.7% and price 1.4%

  • Emerging markets underlying sales growth 8.4% with volume 5.3%

Commenting on the results, CEO Paul Polman said: "We have delivered another year of consistent underlying sales growth and margin expansion coupled with strong cash flow. This has been achieved despite significant economic headwinds and highly competitive markets and reflects the benefits of strong margin accretive innovations and active cost management.

"Looking forward, we anticipate ongoing volatility in the external environment and are positioning Unilever accordingly. Although the investments we have made over the last five years ensure that we are well placed, we are determined to make Unilever even more agile and to fund further growth opportunities by driving out complexity and cost."

Our Markets

Growth continued to slow in emerging markets as a result of the impact of economic uncertainty and currency depreciation on consumer demand. Developed markets remained weak with little sign of any overall improvement despite the more positive macro-economic indicators in recent months.

Unilever Performance

We delivered another quarter of growth ahead of our markets. Our business in emerging markets grew 8.4% driven by underlying volume growth of 5.3%. In developed markets we declined (1.7)% and within this both Personal Care and Home Care reported growth.

For the full year gross margin increased 110bps to 41.2% at constant exchange rates. This reflected the impact of margin accretive innovation, disposal of low gross margin businesses and disciplined savings programmes.

Advertising and promotions expenditure was up 50 bps, an increase of around €460m, as we invested to build our brands for the long term. Overheads increased by 20bps primarily due to favourable one-off items in the prior year. Core operating margin was up 40bps at 14.1%.

Personal Care

Hair care growth in the quarter was underpinned by strong performances from our global brands Dove, TRESemmé, Sunsilk and Clear. TRESemmé benefited from launches into countries such as India and Indonesia as well as the success of the Keratin Smooth product range. Dove Repair Expertise is now in more than 50 markets, Toni&Guy was launched into the United States and Lux hair was relaunched in Japan and China with good initial results.

Skin cleansing growth highlights included Dove Nutrium Moisture shower gels, including the Purely Pampering range, Lifebuoy Clini-Care10 coupled with handwashing market development activities and the launch of Lux Fine Fragrance body wash. In skin care Vaseline Spray and Go continued to grow strongly and Dove was driven by the Dove Men+Care face range and the new Dove facial cleansing range with DEFI technology launched in Japan. Pond's BB+ cream made good progress whilst the Pond's Men range in Indonesia and Thailand is leading the development of the male segment of the market.

Deodorants grew ahead of our markets supported by the success of the Rexona Do:More campaign and the MotionSense technology now available in both male and female versions. Axe Apollo established itself as a very successful variant and compressed deodorants have driven growth ahead of the market whilst delivering significant environmental benefits. Oral care saw the continuation of the successful Brush Day and Night campaign, which is now in 15 countries, and successful innovations such as Pepsodent Germicheck+ and Zhong Hua Porcelain White.

Foods

Although spreads sales were down in the quarter, we have seen an improvement in performance throughout the year. We saw a positive response to the Rama with Butter in Germany, Bertolli melange in Belgium, the relaunch of Flora in the UK and the Simply Delicious clean label variants of Country Crock and I can't believe it's not Butter in the United States. Nevertheless, spreads sales overall were down due to declining margarine markets. Dressings grew on the back of market development activities.

Savoury growth was driven by cooking products with Knorr jelly bouillon steadily building penetration and baking bags doing particularly well in Latin America with a range of new flavour variants being extended to Mexico in the quarter. A new vitamin-A enhanced bouillon was launched in Vietnam and the successful What's for Dinner? market development campaign was rolled out to Belgium and the Netherlands and has now been deployed in seven markets. The performance of soups and sauces in developed markets was weak.

Refreshment

Refreshment underlying sales declined in the quarter mainly due to ice cream in North America where we continued to see the impact of the withdrawal of some low margin products and high levels of low-priced competition. Elsewhere we saw a good start to the summer ice cream season in southern hemisphere markets such as Brazil, helped by the relaunch of our Kibon take home ice cream range and introduction of Fruttare Mousse.

Tea continued to grow driven by our recent innovations such as the improved tasting Lipton Yellow Label tea-bags with our patented tea essence technology. Lipton K-Cups were successfully launched in the United States and the Brooke Bond brand continued to drive growth in India. Ades soy drinks performance remained a significant drag on sales after the product recall earlier in the year but the Soy Force relaunch started to re-build consumer demand.

Home Care

Laundry growth in the quarter was volume-driven, both in fabric cleaners and fabric conditioners. New concentrated Small & Mighty liquid detergents with an improved formulation and innovative pack are now available in five markets and Omo with a touch of Comfort Super-Sensorial range has been successfully launched in Vietnam. Fabric conditioners growth has been supported by the continued success of the Aromatherapy range in South East Asia.

Household care grew double digits in the quarter helped by white space launches such as Cif and Domestos in Brazil and the continued strong momentum of the dishwash brands. Innovations such as Cif ultrafast sprays, Domestos Longer Lasting Germ Kill and Sunlight Power of 100 Lemons all contributed to the growth.

Go to the Investor Centre to read the full fourth quarter and full year 2013 results announcement. Download the Unilever Investor Relations iPhone and iPad app(Link opens in a new window) for further information. Find out more on Unilever in the About Us and Brands in Action sections of this website.

Safe Harbour

This announcement may contain forward-looking statements, including 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words such as 'will', 'aim', 'expects', 'anticipates', 'intends', 'believes', 'vision', or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Among other risks and uncertainties, the material or principal factors which could cause actual results to differ materially are; Unilever's global brands not meeting consumer preferences; increasing competitive pressures; Unilever's investment choices in its portfolio management; finding sustainable solutions to support long-term growth; customer relationships; the recruitment and retention of talented employees; disruptions in our supply chain; the cost of raw materials and commodities; secure and reliable IT infrastructure; successful execution of acquisitions, divestitures and business transformation projects; economic and political risks and national disasters; the sovereign debt crisis in Europe; financial risks; and failure to meet high product safety and ethical standards; managing regulatory, tax and legal matters. Further details of potential risks and uncertainties affecting the Group are described in the Group's filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including the Group's Annual Report on Form 20-F for the year ended 31 December 2012 and the Annual Report and Accounts 2012. These forward-looking statements speak only as of the date of this announcement. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Unilever PLC

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