Unilever FY15 Profit Down, Warns Of High Volatility

(RTTNews) - Anglo-Dutch consumer goods giant Unilever (UN, UL, ULVR.L) reported Tuesday a decline in fiscal 2015 profit on charges and the absence of prior year's asset disposal gain. Core profit was benefited by higher sales mainly in all divisions and emerging markets, while developed markets were flat.

Looking ahead, Chief Executive Officer Paul Polman said, "We are preparing ourselves for tougher market conditions and high volatility in 2016, as world events in recent weeks have highlighted. Therefore it is vital that we drive agility and cost discipline across our business... Our priorities continue to be volume-driven growth ahead of our markets, steady improvement in core operating margin and strong cash flow."

Meanwhile, The Wall Street Journal reported, citing an internal memo, that the Chief Executive of Unilever's underperforming spreads division has resigned, after just one year in the role, to pursue other opportunities. Sean Gogarty stepped down and has been replaced by Nicolas Liabeuf, former senior vice president of marketing operations.

For fiscal 2015, net profit attributable to shareholders' equity dropped 5 percent to 4.91 billion euros from 5.17 billion euros a year ago. Earnings per share fell 4 percent to 1.72 euros.

The latest results included post tax impact of non-core items of 301 million euros of charge, compared to last year's 537 million euros of gain from the disposal of the Ragu and Bertolli brands and related assets.

Core attributable profit, which excluded items, was 5.21 billion euros, compared to 4.63 billion euros a year ago. Core earnings per share were 1.82 euros, 14 percent higher than last year.

Operating profit declined 5.8 percent, while core operating profit grew 12 percent and core operating margin rose 30 basis points to 14.8 percent. In the year, turnover increased 10 percent to 53.27 billion euros from last year's 48.44 billion euros, including a positive currency impact of 5.9 percent.

Underlying sales growth was 4.1 percent, ahead of markets, with volume up 2.1 percent and price up 1.9 percent. All divisions recorded higher sales in the year.

Emerging markets' underlying sales growth was 7.1 percent with volume up 2.7 percent and price up 4.3 percent. The company noted that many emerging markets continued to be weak, particularly those dependent on oil and other commodity exports.

Meanwhile, sales at developed markets were flat with good volume growth in Europe being offset by continued price deflation.

Underlying sales in North America edged up 0.1 percent, while that in Latin America climbed 12.4 percent driven mainly by strong pricing to recover higher input costs.

In the fourth quarter, total turnover increased 4.9 percent on an underlying basis to 12.9 billion euros, with 1.9 percent volume growth and 2.9 percent price growth.

Further, the company said its quarterly dividend payable in March 2016 is 0.302 euro per Unilever N.V. ordinary share and 0.230 pounds per Unilever PLC ordinary share.

Unilever shares were gaining 1.94 percent at 2,899 pence in London, and 3.15 percent at 38.66 euros in Amsterdam.