Unilever has announced underlying sales growth of 3.5% for 2009, but blamed “a challenging environment” for a slump in profits.Price cuts helped drive volume growth of 2.3% over the year, accelerating in the fourth quarter to 5%. The volume increase was seen across most of its key categories.But profits before tax fell significantly from €7bn to €4.9bn, while total sales were down 1.7% to €39.8bn. Advertising and promotional spend increased by 80bps across the year. Unilever also said it had upped margins and saved €1.4bn in supply chain costs.

“We made good progress in challenging market conditions,” chief executive Paul Polman insisted despite the dip in profits.“Our brands are stronger, driven by better quality innovation and a step-change in advertising and promotional expenditure. We have further strengthened our leading positions in developing and emerging markets and made encouraging progress in re-establishing volume growth in western Europe.”

Source: thegrocer.co.uk