Unilever ends tough 2017 on strong note, mulls HQ move

Unilever reported a bigger-than-expected acceleration in fourth-quarter sales growth on Thursday, helped by a stronger performance in emerging markets that saw the consumer goods maker end its tumultuous year on a higher note.


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The maker of Dove soap said underlying sales rose 4 percent. Analysts on average were expecting 3.7 percent, according to a company-supplied consensus. That marks an improvement from 3 percent in the first half and 2.6 percent in the third quarter.

Since a failed takeover bid by Kraft-Heinz last year, Unilever has bought back shares, committed to a margin target, struck a deal to sell its shrinking margarine and spreads business, bought a raft of beauty companies, and announced that it wants to collapse its dual-headed Anglo-Dutch structure.

In November, it said it favoured a single structure but was delaying a decision on where it would be based, in part due to heightened political sensitivity over Brexit.

On Thursday, Chief Executive Officer Paul Polman said an announcement on the dual-headed structure would come shortly.

VOLUME IMPROVEMENT

Unilever sold 3.2 percent more products in the fourth quarter, a big improvement from only 0.2 percent in the third quarter. That was helped by the launch of six new brands last year, including a new line of personal care products called Love Beauty and Planet.

Emerging markets such as Brazil and India also showed signs of improving, he said, predicting that the improved volume momentum would continue in the current year.


The Love Beauty and Planet website - Photo: Love Beauty and Planet website


Underlying earnings per share for 2017 were 2.24 euros, above analysts expectations for 2.21 euros per share.

Looking ahead, the company forecast underlying sales growth of 3 to 5 percent for 2018 and an improvement in underlying operating margin and cash flow that will keep it on track for its 2020 targets.

HQ DECISION

The company said talks with the Dutch and British governments over where to base its global operations are progressing. "It's highly complex because many factors come into this and the discussions with all the governments that we talk to are obviously very constructive," Polman told reporters on Thursday after reporting its results.

"Behind these changes, which obviously involve investments and people, we are working in detail with both the Dutch and the UK government. And now that the UK government as well as the Dutch have a little bit more time away from some of the shorter term issues, we're obviously progressing those as we talk," Polman added.

"We're not time-bound by a week or a month," he added. "We are approaching this very maturely and tactically."

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