Consumer goods giant Unilever's drive to increase volume growth paid off for the fourth quarter in a row as it beat forecasts with a rise in underlying sales in early 2010,with a boost from strong emerging market growth. Chief Executive Paul Polman was cautiously upbeat seeing green sprouts of recovery - as opposed to green shoots - and saw a tale of worlds with robust growth from emerging markets offsetting prolonged stagnation in some developed ones. We continue to think that the recovery will be long and drawn out,and plan the business accordingly. We do not expect the environment to get better and we do expect the competition to get tougher,Polman told a first-quarter results briefing. He warned investors not to run ahead of themselves pointing out commodity costs will rise in the second half of 2010 with tea,milk and crude oil all increasing,but he was sticking to his forecast for commodity inflation of 2 to 3 per cent in 2010. As they say in Dutch,don't smoke too much pot,stay realistic,said the Dutch-born chief executive. Emerging markets shone for the Anglo-Dutch Unilever with Asia/Africa/Eastern Europe sales growing 7.6 per cent and Latin America up more than 10 per cent. These markets account for half Unilever's sales,well ahead of its rivals. Polman said strong innovation led to the growth in China,Turkey,Indonesia and Brazil as it launched brands like Vaseline for Men,Cif,Domestos and Brooke Bond teas in new markets. I continue to be encouraged by our performance in these fast growing competitive developing and emerging markets,he added. Unilever Plc shares were up 3.5 per cent to 19.84 pounds by 0911 GMT to be the FTSE 100 index's biggest riser after it had underperformed the index of top UK stocks and the DJ European Food and Beverage index by 6 per cent this year. Unilever has come in with a strong set of figures which demonstrates that recovery is on track,said analyst Sara Welford at brokers Citi. The world's third-biggest food and consumer goods group and maker of Ben & Jerry's ice cream,Knorr soup and Dove soap reported an underlying first-quarter sales rise of 4.1 per cent,beating a consensus of 3.2 per cent in a Reuters poll of 10 analysts and 3.5 per cent growth in 2009. Polman's strategy has been to cut prices and raise marketing,and despite a sluggish recovery and tough competition he is looking for volume-led growth and higher margins this year. Unilever said quarterly volumes rose 7.6 per cent,after price cuts of 3.3 per cent,beating the 5.2 per cent consensus forecast in the Reuters poll and reflecting the strong growth seen from rivals Nestle and Danone. Unilever's 4.1 per cent increase in sales was behind Nestle's 6.5 per cent rise and Danone's 7 per cent,but Unilever's volume growth of 7.6 per cent beat Nestle's 4.8 per cent after Unilever cut prices last year to become more competitive. The group's western Europe business had sluggish growth of just 0.2 per cent,held back by tough trading in southern Europe,but volumes grew 4 per cent helped by new products like Dove for Men,Magnum Gold ice-creams and Knorr stockpot. Overall first-quarter group sales rose 6.7 per cent to 10.1 billion euros giving an operating profit rise of 17 per cent to 1.4 billion euros. It proposed a quarterly dividend of 0.208 euros per share. US rivals Procter & Gamble and Colgate-Palmolive will report quarterly results later on Thursday,and European rival Henkel reports next week.
