Unilever maintains dividend after strong first quarter

Consumer goods giant Unilever described a strong start to the year on Thursday, with underlying sales growth of 10.5% in the first quarter.

The FTSE 100 company said the growth was driven by progress against its strategic priorities, and was broad-based across all of its business groups and geographies.

Its billion-euro-plus brands, which account for 54% of group turnover, delivered underlying sales growth of 12.1%, led by strong performances from Omo, Hellmann's, Rexona and Lux.

Unilever's beauty and wellbeing segment saw underlying sales growth of 9.3%, with turnover of €3.1bn, up by 13.3% from the previous year.

The personal care segment’s underlying sales growth was 12.7%, with turnover rising 12.6% to €3.4bn, while home care saw a 10.2% uptick in underlying sales growth, as turnover improved 8.6% to €3.2bn.

However, the nutrition segment reported a 4.4% decline in turnover to €3.4bn, despite underlying sales growth of 11.9%.

Finally, the company’s ice cream division saw underlying sales growth of 6%, with turnover of rising 8% year-on-year to €1.7bn.

Unilever's price growth remained elevated at 10.7%, with an improved quarter-on-quarter volume performance of -0.2%.

The firm’s overall turnover increased 7% to €14.8bn for the first quarter, which included a currency impact of -0.4%, and -2.8% from disposals net of acquisitions.

Unilever also announced the continued reshaping of its portfolio, with the sale of the Suave deodorant brand in North America.

The company's third €750m share buyback tranche, announced in March, would meanwhile be completed in July.

Its board announced that the quarterly interim dividend would be maintained at 42.68 euro cents.

“Unilever has had a good start to the year, delivering another quarter of strong topline growth,” said chief executive officer Alan Jope.

“Underlying sales growth accelerated to 10.5%, driven by price growth in response to continued high input cost inflation and an improved volume performance.

“We are continuing to execute well on our strategic priorities.”

Jope said growth was broad-based across Unilever’s five business groups, underpinned by strong performances from its billion-euro-plus brands.

“We have stepped up both the effectiveness of our innovation and the investment behind our brands.

“We continue to shift our portfolio into higher growth spaces, with the delivery of another quarter of double-digit sales growth in prestige beauty and health and wellbeing, and the announced sale of Suave in North America.”

Unilever’s new operating model was driving focussed resource allocation, Alan Jope added, and was “unlocking” a culture of “bolder, faster decision-making” and disciplined execution.

“We remain focused on navigating through continued macroeconomic uncertainty and are confident in our ability to deliver another year of strong growth, which remains our first priority.”

At 0809 BST, shares in Unilever were up 1.91% at 4,455p.

Reporting by Josh White for Sharecast.com.