Pared-down Unilever 'well-placed to cope with slowdown'

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The Independent Online

Unilever, the Anglo-Dutch consumer products group, said yesterday it was well-placed to escape an economic slowdown after paring down its portfolio and insisted it was on track to meet its annual double-digit earnings target.

Speaking as he revealed strong second-quarter results, Niall FitzGerald, the chairman, said: "We're not a leading indicator but overall we are well-positioned across our portfolio to cope with a slowdown. People don't stop eating and happily they don't stop washing."

The group, which makes Hellmann's mayonnaise and Dove soap, reported a 54 per cent leap in pre-tax profit for the second-quarter to 1.5bn euros (£930m), driven by disposals of European brands like Batchelors and Oxo to Campbell Soup. Sales rose 15 per cent to 13.7bn euros. Half-year profits before tax rose 7 per cent to 2.1bn euros.

Shares in Unilever slid 5.5p to 594.5p on City disappointment at poor sales from Bestfoods and flat volumes in Europe. Underlying sales in Europe rose by just 1 per cent after ice cream sales dived 9 per cent. Rudy Markham, the finance director, blamed the decline on "dreadful weather" and the disposal of non-core ice cream brands. He said Bestfoods was hit by trade destocking in the US, noting that consumer sales were up some 4 per cent.

Mr Markham added that synergies from Unilever's £13bn takeover of Bestfoods last year were ahead of expectations. The group reached 40 per cent of its target of 400m euros of savings by June. Sales of the group's leading brands rose by 5.1per cent in the second quarter.

Mr FitzGerald, commenting on the group's progress to boost sales and margins through its four-year "Path to Growth" plan, said: "I am cautiously confident that progress made in the first six laps of our 20 lap race will be sustained."

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