Unilever confident on costs

CONSUMER goods giant Unilever is confident about dealing with soaring commodity costs and competition, as it beat forecasts with a 5.1 per cent rise in underlying fourth-quarter sales.
By The Newsroom
Published 3rd Feb 2011, 08:48 BST

The maker of Knorr soups and Dove soaps said it will make selective price increases because it faces sharp rises in commodity costs for vegetable oils, tea and milk.

It will also make 1 billion euros of cost cuts in 2011.

Chief executive Paul Polman, in his two-year tenure, has cut prices to inject a more aggressive competitive edge to the Anglo-Dutch group, but Unilever shares have underperformed recently on concerns about the pressures that lie ahead.

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"Despite intense competition and the return of commodity cost volatility, our objectives remain profitable volume growth ahead of our markets, steady and sustainable underlying operating margin improvement, and strong cash flow," said Mr Polman.

The world's third-biggest food and consumer goods group posted underlying sales growth of 5.1 per cent in the last quarter of 2010, compared with a consensus for 4.2 per cent. All the increase came from higher volumes.