Unilever boosted by new products

Unilever has boosted sales in 'challenging' markets by launching new products

Consumer goods giant Unilever has said it has boosted sales in "challenging" markets as a promotional push and new products lifted trading.

The Dove-to-Knorr group grew underlying sales by 3.4% in the three months to September 30 after upping its advertising spend and launching products such as a new range of Lipton teas and Surf detergent in the UK.

Chief executive Paul Polman said: "Market conditions remain challenging and in this environment we will continue to increase investment behind our brands."

Unilever - home to a host of household staples such as Flora spread and Domestos detergent - has also been helped by lower commodity costs this year, easing pricing pressure.

Sales volumes across the group were up 3.6% during the period, much higher than the 1.4% seen for the first nine months as a whole.

Unilever has enjoyed its fastest growth this year in the Americas, Africa and Asia, in contrast to sluggish European markets.

But in Western Europe, there were some signs of recovery as underlying sales volumes rose 2.6% compared with 0.1% across the first nine months as consumers gradually emerged from the depths of recession seen earlier in the year.

Lower input prices meanwhile improved the group's margins, while Unilever has also looked to cut overheads through production and IT efficiencies and supply chain savings.

Keith Bowman, equity analyst at stockbroker Hargreaves Lansdown, said the group was "inching closer" to household rival Reckitt Benckiser.

"Sales have again surprised on the upside, whilst the profit margin has also improved. Like Reckitt, an emphasis on innovation and sustained advertising spend is driving performance, with cost saving initiatives providing additional momentum."