Unilever will sell more parts of its food business as it focuses on faster-growing personal care products and emerging markets, CEO says
December 3, 2012
– Unilever, the world’s second-biggest consumer-goods company, will sell more parts of its food business as it focuses on faster-growing personal care products and emerging markets, Chief Executive Officer Paul Polman said.
“You’ve seen us do divestitures, but there is still a little bit more to be done,” Polman said at an investor conference in Paris today.
Unilever, based in London and Rotterdam, has sold its North American frozen meals businesses and is seeking a buyer for Skippy peanut butter. About 60 percent of the company’s food sales come from developed markets such as Europe and the U.S. and have been hurt by declining consumer confidence. More than half of Unilever’s total revenue comes from emerging regions.
The company’s food unit includes Hellmann’s mayonnaise, Knorr soups and Country Crock margarine, and comprises about 30 percent of total sales. In 2011, food was Unilever’s only segment to post a decline in sales by volume, and through nine months this year shipments declined 1.2 percent. Unilever’s ice cream and tea brands are reported in a separate unit.
Polman said the company has “worked hard” to shift more food sales to developing markets such as Indonesia, where items like Blue Band margarine and Bango soy sauce make up 27 percent of sales. Still, “too much is dragging us down,” he said.
The CEO also said Unilever has “failed” to get the heart- healthy selling points of its margarines across to consumers. Sales of Unilever spreads, which include Flora and I Can’t Believe It’s Not Butter, have also been hurt by private-label goods and lower butter prices, he said.
Revenue growth in the home and personal-care units should “come down a little bit” in 2013, Polman said. In the first nine months of this year, both units increased so-called underlying sales by about 10 percent. Underlying revenue excludes the impact of acquisitions and currency fluctuations.
Earlier at the conference, Unilever said full-year sales would exceed 50 billion euros ($65 billion), in line with analyst estimates. Chief Financial Officer Jean-Marc Huet said the company would seek to expand profit margins in the year ahead by introducing a wider range of more-expensive products such as Dove VisibleCare body washes. He didn’t give a forecast.
--Editors: Paul Jarvis, Thomas Mulier
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