Union calls for fresh pension talks as Unilever posts increased profits
HELLMANN’s, Knorr and Colman’s group Unilever posted a small rise in annual profits today after price increases and cost savings offset difficult markets.
Unilever said its prices were up 4.8% across the year, rising to 6.5% in the fourth quarter, after significant commodity cost inflation during the period.
The price rises, coupled with weak consumer confidence, meant growth in sales volumes slowed to 0.1% in the final three months of the year and to 1.6% across the year as a whole after signs of slowing growth in emerging markets.
Turnover rose 5% to 46.5billion euros (�38.6bn) in 2011 and operating profits were 1% higher at 6.4bn euros (�5.3bn).
Chief executive Paul Polman said the company faced “difficult markets and an unusual number of significant external challenges”.
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The results come shortly after an 11-day run of industrial action by UK workers at 12 sites, including the Colman’s site in Norwich, in a row over the ending of the company’s final salary pension scheme.
Unilever called the action “disproportionate” but union officials said workers were “furious” at the plans to scrap the scheme, which they said would lead to pension cuts of between 20% and 40%.
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The company maintained that almost 90% of its affected employees will retain 80% or more of their pension.
Its results today revealed that Unilever’s pensions deficit rose to 3.2bn euros (�2.65bn) at the end of 2011, compared with 2.1bn euros in December 2010.
The Unite union today urged Unilever management to meet it for talks over the pensions move or face the prospect of more strike action.
Jennie Formby, Unite’s national officer, said: “These profits are mind-blowing, especially in a time of recession. This will make people stop and think twice about Unilever’s attempt to claim that they cannot deliver the decent pension scheme our members have been saving for.”
Unilever’s shares were 4% lower amid concerns over the fourth quarter slowdown.
Hargreaves Lansdown analyst Keith Bowman said prospects for 2012 were wrapped in caution: “While management clearly continues to sharpen performance, today’s results provide little reassurance.
“Europe is unsurprisingly tough, while the outlook for raw material costs remains difficult to forecast.”
The company, which includes brands such as Marmitee, Persil and PG Tips, said it it had invested heavily in advertising and promotions, with its spend up 150million euros (�125m) in the year.
Sales volumes in the personal care and home care categories rose by 4.2% and 2.2% respectively last year but foods declined 1.2%, with the fall accelerating to 3.9% in the fourth quarter after a 7.8% rise in prices.
Mr Polman added: “We expect the external macro-economic environment to remain difficult in 2012 and input cost headwinds will persist, although to a lesser extent than in 2011.”
He said the company’s priority remained to focus on profitable volume growth.