Unilever cuts marketing spend as European revenues rise

By Daniel Farey-Jones, marketingmagazine.co.uk, Thursday, 04 August 2011 01:10PM

Unilever has reduced its first half marketing spend by 1.5% in reaction to cost pressures, but has still boosted revenues including in its problem region of Western Europe.

Unilever: cuts marketing spend

Unilever: cuts marketing spend

The global FMCG company warned "all categories are managing significant cost increases", which have led to lower margins in the first half.

It has made good on its promise to reduce costs in April and has reduced its first half advertising and promotions spend by 1.5%, though it did not disclose how much it spent.

Revenues were up by 4.1% year on year to €22.8bn and pre-tax profits were up 9% to €3.2bn.

Western Europe has been a difficult region of late – in the first quarter underlying sales growth was down 2.7% due to falling volumes and flat prices.

Rival Procter & Gamble has also found it tough going, to the extent that its chief executive has just said P&G is preparing for a period of little or no growth in developed countries, ahead of its results tomorrow.

However, Unilever has increased second quarter Western Europe revenues by 4.7% to €3.4bn, with underlying sales growth in both price and volume.

At a global level, the company managed to increase prices by 5.1% while boosting volume by 1.9%.

Chief executive Paul Polman claimed: "Volumes were robust and in line with the market, despite having taken price increases. This shows the strength of our brands and innovations."

Polman added the company intended to keep extending its brands into new markets, which was the biggest driver of growth.

"For example, Dove Hair Damage Therapy will be in more than 30 markets by the end of the year, Magnum has been rolled out to the United States and Indonesia and the Vaseline Men face range has been launched in South East Asia.

"We also continue to transform the portfolio with the integration of Sara Lee brands largely complete and Alberto Culver progressing rapidly."

This article was first published on marketingmagazine.co.uk

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