Unilever Sales Lifted by Currency Impact -- Update

By Peter Evans 

LONDON-- Unilever PLC on Thursday said the strong U.S. dollar and a shift into more premium products helped it post a big rise in first-quarter sales.

The maker of Dove soap and Axe deodorant said sales increased 12% to EUR12.8 billion ($13.7 billion) in the first three months of 2015. The company's shares rose sharply in early London trading.

Last year, Unilever and many other European consumer-goods companies blamed currency swings for eating into sales. But in 2015, with the euro down around 12% against the dollar, the value of Unilever's sales in the U.S. has increased dramatically. The company cited similar trends with the Indian rupee and Brazilian real.

In total, Unilever said currency movements boosted sales by 10.6% in the first quarter. It added that full-year sales would increase 9% at current exchange rates. "The euro is weaker against all our main currencies, except the ruble," said Chief Financial Officer Jean-Marc Huët.

Underlying sales--which strips out the impact of acquisitions, disposals and currency movements--grew 2.8%, compared with 3.6% in the same period last year.

After years of soaring sales growth, Unilever has struggled of late as the developing markets in which it makes the majority of its sales have stalled. Underlying sales in emerging markets increased 5.4% in the first quarter, down from 6.6% a year earlier.

Unilever has helped mitigate slowing markets by raising prices and releasing premium versions of its products, such as gel-capsule versions of OMO laundry detergent in Brazil and a range of high-price Axe deodorants in the U.S. Overall, Unilever increased prices by 1.9% across the company in the quarter.

"Despite high levels of currency and commodity volatility, we are now starting to see more tailwinds than headwinds in our markets, and expect our initiatives to deliver a further improvement in volume growth in the remainder of the year," Chief Executive Paul Polman said.

Write to Peter Evans at [e-mail]

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