7 May 2009
• Underlying sales growth of 4.8% with 6.8% coming from carry-over pricing and volumes lower by 1.8%. Turnover 0.7% below last year including currency movements (-2.0%) and disposals/acquisitions (-3.3%).
• All categories grew, with the top 13 ‘billion euro’ brands showing faster pick-up, being among the first to benefit from the increased customer and consumer focus.
• Developing and Emerging markets holding up, with double-digit growth. Improved performance in the US. Underlying sales down in Western Europe in continued challenging market conditions.
• Operating margin before RDIs down by 30 basis points reflecting the dilution from the impact of disposals.
Gross margin down by 190 basis points as a result of commodity cost increases, including currency effects. Advertising and promotions lower by 110 basis points, driven by efficiencies and, especially, innovation phasing. Overheads reduced by 50 basis points, boosted by accelerating savings programmes.
• Earnings per share before RDIs down 13%, mainly reflecting dilution from disposals, the finance charge for pensions and a higher tax rate compared with a particularly low rate last year.
• Strong A+ balance sheet allowed for issuance of US $1.5 billion and £0.35 billion of bonds at very competitive rates.
Paul Polman, Chief Executive Officer:
“First quarter results were solid given today’s trading environment, with growth of 4.8% and underlying margins maintained, before dilution from disposals. We have made good progress implementing plans to reignite volume growth, building on existing strengths and correcting competitive gaps. We will further step up innovation and brand support from the second quarter and expect this to drive an improved volume performance. This will be achieved while protecting cash and margins for the year.”