Unilever's shares up as ice cream sales help firm beat Q3 forecast

By Nathan Gray

- Last updated on GMT

Unilever's shares up as ice cream sales help firm beat Q3 forecast

Related tags Unilever

Food and consumer good giant Unilever reported sharply increased third-quarter revenues, as sales of ice cream jumped and emerging markets saw heavy growth.

The firm reported a 9.4% increase in Q3 turnover, which hit €13.4 billion, while figures for the first nine months of 2015 showed 11.1% rise in turnover, reaching €40.4 bn.

The manufacturer behind major brands like Knorr, Lipton, Wall’s and Ben & Jerry’s, said the food and refreshment arms of its business grew sales by 1.5% and 4.7% respectively in the first nine months of 2015 – with sales in its refreshment unit boosted by a bumper European ice-cream season and positive currency effects in Q3.

Unilever share prices rose by more than 4% in response to the better-than-expected performance, which is the company’s best organic growth and volume growth performance since Q4 in 2012, according to a note from Bernstein.

In a statement, Paul Polman, Chief Executive Officer of Unilever said the strong Q3 performance shows that the firms focus on building for the long term ‘is paying off.’

“Growth was however helped by some specific factors such as a soft comparator in China, strong ice cream sales and some advanced sales in Latin America,” he noted – adding ‘sharpened strategies’ across its four business categories are gaining traction, while a stronger innovation pipeline is increasingly driving growth.

“We will continue to invest steadily behind our brands, innovations and go-to market capabilities. These actions keep us on track for another year of volume growth ahead of our markets and we now expect underlying sales growth for the year towards the upper end of the 2-4% range,”​ stated Polman.

Growth in food and refreshment

According to Unilever, its savoury food businesses demonstrated ‘good’ volume-driven growth of 1.5% - which was led by cooking products in emerging markets and by innovations around naturalness and health.

“We launched Knorr Mealmakers with 100% natural ingredients and continued to grow the business in Africa with fortified stock cubes that address iron deficiency,”​ said the firm, adding that in dressings, Hellmann’s showed strong volume-led growth driven by an excellent performance in Latin America and the success of the squeezy packs in Europe and North America.

Meanwhile, a 4.7% growth in nine-month sales for Unilever’s refreshment business unit was driven in particular by a strong Q3, which saw sales spike by 8.5% thanks to the strong performance of ice cream.

In addition to strong performance in ice cream, Unilever said it is building presence in faster growing segments of leaf tea: “Lipton and PG Tips extended further into fruit, herbal and speciality teas. We opened more T2 stores which we leverage with online sales and in France we have launched T.O., our first tea brewing machine.”

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