Unilever's 'Path to Growth' strategy pushes profits up 12%

Unilever, the consumer products giant whose brands include Flora margarine, Dove soap and Ben & Jerry's ice-cream, revealed continued progress as part of its "Path to Growth" strategy yesterday with a 12 per cent increase in underlying profits for the full year.

Niall FitzGerald, the chairman, said trading conditions had been more difficult than envisaged but he confirmed the group's target of low double-digit earnings growth for the current year.

Unilever said it had seen slower trading in North America where its prestige fragrance business had been hit by a sharp dip in duty-free sales after 11 September. But Mr FitzGerald claimed that the nature of Unilever's brands meant it was relatively protected from the economic slowdown. "People still have to eat and wash themselves. Even in Japan our business has been growing at 10 per cent over the last three to four years despite economic problems there."

The company has been concentrating its marketing firepower on a smaller number of brands as it seeks to turn names such as Dove and Suave toiletries into global powerhouses. The past few years has seen Unilever sell 50 businesses, close 59 factories and cut its number of staff by 23,100. Underlying sales growth in the leading brands was 5.3 per cent in the year compared with 4 per cent overall.

The group has also been extending brands to cover a wider product area. Bertolli, originally an olive oil, has been extended to sauces and spreads, Dove now has products in shampoo and moisturisers as well as soap. And Slim.Fast, the health-food product group bought for $2.3bn (£1.6bn) in 2000, has seen sales grow by 23 per cent helped by product diversification. "It started as a diet drink for fat people. Now it is a well-being range to make people feel healthy," Mr FitzGerald said.

Unilever said its Bestfoods acquisition had been successfully integrated, though sales growth slowed to just 2 per cent as management concentrated on the reorganisation rather than growth.

The company is stopping PricewaterhouseCoopers, its auditors, from undertaking any consultancy work for the group to avoid any conflicts of interest.

Mr FitzGerald said this had been under consideration for months and had "nothing to do with Enron".

In the 12 months to 31 December Unilever's profits rose 34 per cent to €3.7bn (£2.2bn). Sales were up 11 per cent to €53.5bn.

Shares in Unilever fell 5.5p to end at 585p.