The last three months of last year were “particularly challenging”, Unilever said, although its foods sector reported a sales growth of 1.9% to £2.9bn (€3.4bn). Underlying profit rose 1.6% across the quarter.
The wider Unilever group reported a 3.7% rise in sales to £44.7bn (€52.7bn) – 4.3% growth in constant currency – driven by price rises of 2.8%. Operating profit rose 3.8% to £6.6bn (€7.8bn).
‘Severe economic disruptions’
Unilever ceo Paul Polman said: “We have delivered another good all-round performance despite severe economic disruptions, particularly in India and Brazil, two of our largest markets. We have again grown ahead of our markets, driven by strong innovations that support our category strategies.
“Our priorities for 2017 continue to be volume growth ahead of our markets, a further increase in core operating margin and strong cash flow. The tough market conditions which made the end of the year particularly challenging are likely to continue in the first half of 2017.”
Sales in spreads fell over the year, driven by a continued decline in developed markets, the food manufacturer revealed.
The Hellmann’s and Knorr brands both delivered “another year of strong growth”, Unilever claimed. Ice cream brands Magnum, Ben & Jerry’s and Talenti also reported growth across the year.
Unilever expected a slow start to 2017 due to tough market conditions, it said. But, it said growth would improve as the year progressed.
Unilever was involved in a public row with Tesco in October over its Marmite spread, after the manufacturer wanted to raise its prices by about 10%.
Meanwhile, food prices were expected to rise in 2017 – reversing the deflationary trend of recent years, the Office for National Statistics revealed earlier this month. The price rises would be a response to increased raw material import costs, and unpredictable currency rates.
- Food sector profit up 2.6%
- Group sales up 3.7% to £44.7bn
- Prices up 2.8%