Unilever reported strong sales on Thursday. The Anglo-Dutch consumer goods company reported higher sales in the first quarter due to excellent sales in rising markets and price increases, regardless of the shortcomings in North America and Europe.
The company also publicized its quarterly dividend which rose 12 percent to €0.3585 per share and said that it is on track for primary sales growth in 2017.
Unilever’s results could heighten investor interest for the firm since its shares have remained higher since February which was also the time when a rival company Kraft Foods Inc. proposed a $143 billion takeover on Unilever but was rejected right away.
Turnover for the first quarter climbed 6.1 percent to €13.3 billion including a positive currency impact of 2.4 percent.
Underlying sales rose 2.9 percent with price up 3 percent and volume down 0.1 percent, USG was 3.4 percent excluding spreads.Underlying sales growth in emerging markets boosted 6.1 percent with price increase of 5.3 percent and volume up 0.8 percent.
Unilever said that the quarterly growth supports its long-term strategy.
Along with the consumer giant’s sales increase, its PLC stock also climbed 1.5 percent to 3,998 on Thursday.
The company also gave its forecast earlier this month, stating sales will grow 3 to 5 percent this year, with margin of at least 80 and a dividend increase of 12 percent.
Nestlé’s first quarter revenue for organic products also grew 2.3 percent compared to the 2 percent median estimate.
Nestlé’s SA (NESN) went up 0.2 percent to 75.38 on Thursday 13:14 GMT.
Both companies improved pricing strength presented early hints of recovery for the food and beverage market after a long time of decreasing demand in Europe, slowing sales in China and economic crises in Brazil and Russia.
Contributing factors to the growing tension were the increase in the prices of goods, inflation in Brazil and the decline of the pound since the UK European Union membership referendum last June 2016.
The impressive performance in Unilever’s savory was led by cooking products in developing markets supported by the leading brand Knorr acting in response to primary needs such as nutrition deficiency and growing demand for time-saving meal makers.
Hellmanns’ innovations focusing on the pureness of the ingredients brought about continuous gains in the dressings’ market share.
Dairy products are also doing well thanks to effective innovations behind premium brands such as the new Magnum Pints including the coconut and raspberry selections.
Ben & Jerry’sWich sandwich and the new pint range Topped propped up its sales by two digits.
Unilever has also extended the Solero ice cream offer of less than 50 calories and launched vegan and gluten-free variants under Cornetto.
However, markets in North America and Europe weakened in the first quarter while Latin America has seen sales growth in health and wellness section. As the population of overweight people rises, the company should also work on its success and raise buyer awareness of healthier product choices in order to support its weight management brands.
Unilever has not provided any immediate update on plans to divest its spreads unit, which consist of the Flora brand. Following the company’s refusal to Kraft’s offer in February, Unilever will deliver on its word to increase investor profits through buybacks and boost productivity goals.
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