Unilever saw underlying sales accelerate due partly to heatwave-driven ice cream consumption, the Anglo-Dutch consumer giant said Thursday, as it tries to recover from axing a move of its headquarters. The firm behind Ben and Jerry's and Magnum as well as household brands like Knorr and Dove said however that third-quarter turnover however dropped 4.8 percent to 12.5 billion euros ($14.4 billion) due mainly to currency exchange issues.
The huge multinational made no mention in its statement of the decision on October 5 to ditch a plan to move its main corporate base from London to Rotterdam after a shareholder revolt. "Growth accelerated in the third quarter across all divisions," said chief executive Paul Polman, whose own position was called into question by the backtrack on the headquarters shift.
Unilever, which also makes yeast spread Marmite, Persil washing powder and PG Tips tea, said underlying sales growth was 3.8 percent for the three months to October. "We continue to expect underlying sales growth in the 3 percent - 5 percent range, an improvement in underlying operating margin and strong cash flow," Polman added.
Modest growth in Europe was "mainly driven by strong ice cream sales that were helped by both innovations and good weather in Northern Europe", particularly in Germany and the Netherlands, Unilever said. Much of Europe basked in a heatwave over the northern hemisphere summer.
Across the world "ice cream delivered strong growth led by innovations including the new Kinder ice cream and the new Magnum Praline variant". In Latin America, sales increased by 10 percent in Brazil after the end of a truckers strike, although the figure strips out Argentina which Unilever said was now experiencing "hyperinflationary" conditions. Despite the figures, the shadow of the abandoned London-Rotterdam move still hangs over Unilever's chief exec. Unilever originally unveiled the planned switch in March in a symbolic decision that was largely interpreted by analysts as a blow to post-Brexit Britain.
It also followed a failed hostile bid by US rival Kraft Heinz last year, which analysts said played a key role in Unilever's decision as the Netherlands has stronger rules to protect companies against takeovers. But Unilever faced mounting opposition from key shareholders angry that the plan would have ended its dual stock exchange listing in London and Amsterdam, meaning that many would have had to sell shares in Britain. Unilever said when it announced the decision to ditch the move that it would "consider its next steps" and still believed simplifying the firm's structure would be in its best interests.
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