City: Unilever to enter a decade of growth
Director of equity research Graham Jones said: ”We expect infill acquisitions in existing categories to become a more regular feature, supplementing what we believe should be 5% like-for-like sales growth and steady margin expansion.”
Unilever’s sales have effectively been stuck at around €40bn for the best part of the past two decades, noted Jones. But the firm was now on course to double sales in the next decade.
“We believe sales will be over €80bn by 2019 through a combination of more consistent organic growth and in-fill acquisitions in core categories, such as the recent acquisition of Sara Lee and the pending acquisition of Alberto Culver.”
Emerging markets account for more than half of group sales
Meanwhile, Unilever had worked hard to improve its cost structure, raise ad spending and streamline its portfolio, while its increasing focus on higher-growth emerging markets also stood it in good stead, he added.
“Most emerging markets are entering a demographic sweet-spot for consumer goods companies; Unilever is rolling out in white spaces more aggressively and, after a slow start, is now building scale rapidly in China.”
Sales from developing and emerging markets currently account for just over half (52%) of group sales, although this will be diluted slightly by the acquisitions of Sara Lee and Alberto Culver.
Indonesia, considered by many analysts to be the jewel in Unilever's crown, is now generating €1.3bn in sales, while Greater China now has sales of €1.2bn with the objective of increasing sales five-fold over the next decade to €6bn.
Vietnam, which Unilever entered in 1995, is now a €500m business, while sales in Bangladesh have reached €200m.
Environmental and nutritional targets
The firm, which declined to comment on the progress of plans to offload sauce brands Chicken Tonight and Ragu, has also unveiled bold plans to halve the environmental footprint of its products and source 100% of its agricultural raw materials sustainably over the next decade.
A series of ambitious targets on the nutritional front include further reducing sugar in ready-to-drink tea, eliminating all trans fats generated from the partial hydrogenation of vegetable oil and setting a maximum ceiling of 110 calories for all kids’ ice creams by 2014.
