1Q16 RESULTS

Unilever’s management characterized the company’s performance in 1Q16 as strong, driven by volume gains. The company said it had maintained momentum despite a tougher environment and that it gained share in all four of its product segments.

PERFORMANCE BY SEGMENT

• Growth in the Personal Care segment exceeded the corporate average, as the company pushed into more premium segments. New products in the Axe line are targeted at the higher-growth male-grooming segment, and deodorants continued to perform strongly.
• The Food segment returned to growth, and good performance in savory products was led by cooking products in emerging markets and by new natural products in Europe. Sales in spreads declined due to a continued market contraction in developed countries.
• The Home Care segment delivered strong broad-based growth, growing faster than its markets. Household care was a strong growth and margin contributor, driven by sprays in Europe and continued expansion in emerging markets, including China.
• In the Refreshment segment, ice cream continued a strong two-year trend, fueled by acquisitions. The company continues to extend its move toward premium products in leaf tea and is also extending its presence in green, herbal and specialty teas.

PERFORMANCE BY GEOGRAPHY

• Asia drove volume gains, and other regions experienced price growth. The Philippines experienced double-digit growth, and Russia and Turkey also showed growth. Growth in China was driven by online sales. South Africa and Thailand experienced slow market conditions at the beginning of the year.
• In the Americas, Latin America experienced double-digit sales growth, and Brazil and Argentina performed particularly well. North America grew slightly, and gained share.
• Volume growth was offset by price deflation in Europe. Home Care and ice cream continued to grow, but a contraction of the margarine market hurt Food segment performance in Germany and France. Personal Care experienced strong broad-based volume growth despite a high level of promotions.

OUTLOOK

Despite volatile markets, management remains focused on net revenue management, zero-based budgeting and continued organizational transformation, all of which are expected to drive volume growth, improvements in core operating margins and cash flow in 2016.