Unilever: price pressure overshadows good news

(CercleFinance.com) - Unilever has had a good start to the year, with strong volume growth in the first quarter, with the group announcing a share buy-back programme of up to 6 billion euros.
However, analysts seemed to be worried by a lower contribution from price increases.

The consumer goods group said that underlying sales growth, excluding spreads, reached 3.7% in the first three months of the year, with volume up 3.6% and prices up a modest 0.1%.

Indeed, the Anglo-Dutch consumer goods giant acknowledged a lower contribution from price increases, particularly in emerging markets, due to a lower inflationary environment.

"The sharp deterioration in pricing limits upside to consensus EBIT margin for 2018," UBS commented in a reaction note.

This disappointment overshadowed the announcement of a new share buy-back programme of up to 6 billion euros, which is set to start in May, to return proceeds from the spreads disposal, and an 8% increase in its dividend.

As a result, Unilever shares were down 2.4% on Euronext Amsterdam today.

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