Unilever reports highest quarterly price growth

Unilever reported the highest price growth in more than two years after introducing products such as Magnum ice cream and Knorr jelly bouillon in new markets and passing on surging raw-material costs.The shares rose the most since 2009 after underlying price growth at the world's second-biggest maker of consumer goods climbed 5.1 per cent in the second quarter, the London and Rotterdam based company said yesterday. That beat the 2.6 per cent median estimate of nine analysts surveyed by Bloomberg News. CEO Paul Polman, who took the helm in 2009, has accelerated the introduction of new products such as Lipton Sun Tea and pushed items such as the jelly bouillon into new countries, repackaging it into sachets for China. He's also lifted prices again after offering more promotions following the global financial crisis in a bid to combat surging costs for ingredients such as palm oil and sugar. "Unilever's first-half results are very strong," said Harold Thompson, an analyst at Deutsche Bank in London, who recommends investors buy the stock. "In what is clearly a very difficult environment for consumer-goods businesses, this is likely to be a top quartile performance through the results season and represents easily the best performance since Paul Polman was appointed as CEO."Total underlying sales, which exclude the effect of acquisitions, disposals and currency fluctuations, advanced 7.1 per cent. Analysts had anticipated growth of 5.8 per cent. Unilever rose as much as 6.7 per cent in Amsterdam trading, the biggest intraday advance since August 6, 2009. The stock was up 5.8 per cent to ¤23.38 at 12:14am, bringing the company's market value to about ¤ 71 billion (Dh370 billion). Unilever introduced Magnum ice cream in the US, Dove deodorant in Thailand and Axe deodorants and skincare products in China. About 30 per cent of revenue is from products launched in the last two years, the company said."As well as innovating faster, we're taking our brands into new markets," Huet said. The company will introduce more than 60 projects in more than 10 markets in 2011, it estimates, compared with 40 in 2010 and nine in 2009. The company intends to roll out more products in the second half and plans to devote "at least" the same sum to advertising and promotions as the ¤3 billion spent in the first half. Underlying sales in Western Europe rose 4.8 per cent in the second quarter, the biggest advance in at least two years, boosted by Germany and France."Western Europe as a market is a very difficult one," Huet said. From / Gulf News