Unilever Is Buying Mayo Upstart After Rebuffing Kraft

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Unilever this morning (20 April) reported first-quarter organic sales that beat analyst expectations, helped in part by price-driven growth at its ice cream arm amid a flat performance from its food business.

The FTSE 100-listed firm, which unveiled the results of a wide-ranging strategy review earlier this month, said its underlying sales growth in the first three months to the year was 2.9%, with price growth of 3.0% clipped back by a 0.1% fall in volume. That compares to analysts' estimates of 2 percent, according to a consensus compiled by the company, and growth of 2.2 percent in the fourth quarter and 3.2 percent in the third quarter of the last financial year.

Growth was led by emerging markets, while pricing added 3 percent and the dip in volumes took off 0.1 percent.

Global food companies have been struggling with anaemic economic growth in many key markets amid changing and health-conscious lifestyles.

Improved pricing power at both companies provided an early sign of recovery for the food and beverage market after years of deflationary pressure in Europe, slowing sales in China and economic crises in Brazil and Russian Federation. Pitkethly said it was "a bit of a relief" to be able to finally "engage wholeheartedly" with private equity suitors which have been circling the unit for some time.

"This reflects our continued investment in both innovations and brand support, and reconfirms the strength of our long term sustainable compounding growth model".

Unilever Chief Executive Officer Paul Polman announced an overhaul of the company this month, following the rejected acquisition attempt by Kraft Heinz.

The company did not provide any immediate update on plans to divest its spreads unit, which includes the Flora brand.

With portfolio weightings nearing 5 percent, Unilever is the largest position in the two funds Clayton manages, which together account for 505 million pounds.

Turnover rose 6.1 percent to 13.3 billion euros ($14 billion), including a foreign exchange boost of 2.4 percent. The quarterly dividend has been raised by 12%.

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