Unilever ice cream brands boost overall sales

Unilever’s ice creams and Knorr brands helped to boost food and refreshment sales by 2.2% in its first quarter results, despite sales being impacted by this year’s late Easter.

Underlying volume growth in Unilever’s Food division decreased 2.1% to €3.2bn (£2.7bn) in the three months to April 1, mainly due to its problematic spreads business, which it plans to sell. The Easter break falling in April this year meant sales across the division remained flat, Unilever said.

Total group turnover rose 6.1% to €13.3bn (£11.1bn) across the three months. Price rises boosted underlying sales growth by 2.9%.

‘Continued investment’

Unilever ceo Paul Polman said: “The first quarter shows growth once more ahead of our markets. This reflects our continued investment in both innovations and brand support, and reconfirms the strength of our long-term sustainable compounding growth model.

“The actions we are taking keep us on track for another year of underlying sales growth ahead of our markets, in the 3–5% range. We also expect an improvement in underlying operating margin this year of at least 80 basis points and strong cash flow. We are raising the dividend by 12%, reflecting the confidence in our outlook.”

Launched new products

Ben & Jerry’s ice cream reported double-digit growth, while Solero and Magnum both launched new products, which contributed to the Refreshment division’s 2.2% rise in underlying sales.

Unilever’s spreads business reported a 5.1% drop in sales, due to “market contraction in developed countries”. The manufacturer revealed plans to sell or demerge the business on April 6. Excluding the spreads business, the Food division reported a 1.7% rise in sales.

Meanwhile, Kraft Heinz was not mentioned at all in Unilever’s trading update, after the US firm’s botched attempt to buy Unilever in February. Kraft Heinz’s pursuit of Unilever ultimately led to its decision to sell its spreads business.

Unilever trading update – at a glance

  • Food and refreshment sales up 2.2%
  • Underlying volume growth in Food down 2.1%
  • Sales impacted by late Easter