Little Purchases Bringing in BIG profitsBy Gds International, PRNE
Tuesday, April 19, 2011
Consumer Goods Giant Unilever Swims Against the Recessionary Tide to Post a Profit
LONDON and BRISTOL, England, April 20, 2011 - They call it the 'lipstick index': the term coined by makeup giant Estee
Lauder to describe the increase in sales of cosmetics during a recession.
Women, so the theory goes, substitute more expensive purchases like
dresses and shoes for lipstick in times of economic distress.
Given recent profit reports, perhaps the term could also be extended to
include tea and ice cream.
It's certainly the case for consumer products company Unilever NV: the
maker of Lipton teas, Ben & Jerry's ice cream and Dove soaps recently posted
a 15 percent increase in earnings for the fourth quarter on strong sales in
emerging markets - even as margins were impacted by rising costs of raw
According to Unilever's Chief Executive Paul Polman, net profit was
euro955 million ($1.32 billion), up from euro831 million. Sales rose 12
percent to euro18.8 billion.
"Underlying profit margins slipped by 0.2 percent, as we were unable to
fully pass on rising commodities costs to struggling consumers. With sales
prices flat, increased raw materials costs outweighed savings from
restructuring and cuts on advertising," Polman was reported as saying.
The world's third largest consumer products maker predicts that this year
the total input cost of inflation will be "around four percent of total
Polman says the company will absorb that increase by a combination of
hiking prices and further cutting costs, and argues that commodity price
increases will cripple the company's cheaper competitors.
Unilever's fourth quarter sales volumes increased in all regions, though
prices were, on balance, flat. Profit margins increased in Europe due to cost
cutting, but it wasn't enough to outweigh margin falls in North and South
America, Asia and Africa.
The continuation of price falls in Europe "reflected the high levels of
promotional intensity in many of our markets".
Boosting net sales was the acquisition of the personal care business of
Sara Lee while ice creams and beverages were the company's strongest category
- including the introduction of the Magnum brand to Indonesia and the growth
of Klondike in the US.
Profit margins - and how technology can contribute to the bottom line -
is likely to be top of mind at the CIO Summit Europe 2011 which takes place
at the Ritz Carlton in Berlin from 24-26 May 2011.
This closed-door summit, hosted by GDS International, also features some
of the leading voices in the European including Neil Dyke, GE Corporate CIO
of EMEA; Sauro Nicli Group CIO of AXA; Patrick Vandenberghe Group CIO of
ArcelorMittal, and Michael Terhorst CIO Europe & Africa FVC of BP.
Along with information security, other key topics for discussion include
the role of IT in social media, enterprise mobility, data centre optimisation
and maximising enterprise IT security protection.
CIO Summit Europe 2011 is an exclusive C-level event reserved for 100
participants that includes expert workshops, facilitated roundtables,
peer-to-peer networks and co-ordinated meetings.
For more information, visit www.ciosummiteurope.com
GDS International is a leading business-to-business events company. We
offer financial, healthcare, IT service management, telecoms and oil and gas
summits for senior executives throughout the Asia Pacific, Africa, China,
Europe, North America and Russia markets. Our value proposition is simple: we
deliver real results. And we're very good at it.
Jacob Mazan, +44(0)117-915-4774, email@example.com
Jacob Mazan, +44(0)117-915-4774, jake.mazan at gdsinternational.com
Tags: April 20, England, Gds International, London And Bristol, United Kingdom