Unilever sees quarterly improvement but some markets dip

Unilever PLC (LON:ULVR) said sales in the third quarter accelerated compared to the second across its markets but some regions were still under pressure.

The FTSE 100-listed group said sales in North America were driven by elevated demand for foods consumed at home, while Europe saw a challenging pricing environment, India saw a pick-up in economic activity despite the rise in cases of coronavirus (COVID-19), China saw a slight improvement while Indonesia and Latin America contracted.

READ: Unilever getting its mojo back, says Barclays

Unilever’s underlying sales in the three months to September 30, 2020, rose by 4% to £12.9bn compared to last year, with home care up 7%, beauty & personal care and food & refreshment both up 4%.

The board proposed a dividend of 0.4104p per share to be paid in November.

The consumer goods giant also said it has received legal advice regarding the exit from its Dutch listing to concentrate its legal structure in London.

A bill was tabled in the Dutch Parliament but, if it were enacted in its current form with retroactive effect and were applied to unification, it would infringe the Dutch UK tax treaty and other tax treaties the Netherlands has concluded with states in which shareholders of Unilever reside.

“It is not clear when, or indeed if at all, the bill will be enacted, or in what form,” the company said in the quarterly update.

“As previously stated, the boards intend to proceed with their proposals provided that unification, in the boards’ view, remains in the best interests of Unilever, its shareholders and other stakeholders as a whole.”

Steve Clayton, manager of the HL Select funds, said Unilever is demonstrating its strengths here, just when it is needed and the underlying growth of 4.4% at a time when the world is in economic disarray is impressive.

“The group’s portfolio of brands has been able to capitalise on consumers’ changing behaviours,” he commented.

“Its diversity gives it strength and its products are everyday items, from Dove soaps to Magnum ice creams that we buy day in day out. The group has delivered consistent growth over decades and shows no sign of running out of steam.”

Shares rose 1% to 4,748p on Wednesday morning.

–Adds analyst comment, shares–