Unilever, the consumer goods giant, maker of Dove soap and Ben and Jerry's Ice Cream has outperformed itself after improving margins and sales up by 3.8 pct.

"Notwithstanding this difficult environment and comparators which get tougher as the year progresses, the results confirm again that our strategy to focus on the consumer and to accelerate growth is working." said the Chief Executive Officer.

EMERGING MARKETS

Speaking in a series of interviews, CEO Paul Polman said that they were 'competing fiercely' in emerging markets where large numbers of consumers meant the battle was very tough in places such as China and India.

Numbers for these countries were underlying growth up 11.6 pct and operating margin up 10 bps. Europe in comparison was up just 1.7 pct in volume but 130 bps in margins showing a cost improvement in markets where the brand is established.

KEY BRANDS

13 brands which Unilever deploy globally are almost exlcusively over two categories - Food and Beverages and Home and Personal Care, and numbers for 12 out of these 13 including - Lynx, Dove, Flora, Knorr, Lipton and Surf - were all growing, according to Mr Polman - showing 'broad-based' growth.

Elsewhere, good weather and strong ice-cream sales helped exceed market expectations for sales of Magnum Gold, Cornetto Enigma and Fruttare up 5.1 pct overall.

Despite this, shares in the company continued to fall in early trades after 'profit-taking' occured over the market on shares which were considered too high.

By 10:30am GMT +1, shares in the company listed on the FTSE 250 were down 3 pct or 55 pence to 1776p.

In related news, the group has also announced a key partnership with BT Global Services last month to provide it the infrastructure it needs, and it announced today 'the IT rollout continues'.

MARKET CONSENSUS

Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers commented: "Unilever has reported a similar picture to that seen in the first quarter, although events in Greece have impacted. Q2 underlying sales growth has decelerated to 3.6pc compared to Q1 (4.1pc), with advertising spend being pushed ever harder in order to combat consumer austerity measures. Subdued sales in developed economies continue to be offset by emerging market growth, with demand for personal care products such as deodorants leading the way.

On the downside, comparatives are set to become tougher, whilst rising commodity prices are likely to pressure profit margins going forward. Furthermore, consumers continue to sift essentials from non-essentials in order to cut costs, with a move by the group's Personal Care division to leading category, at the detriment of dressings, spreads and ice cream, a sign of the times.

In all, with Unilever and rivals emulating the successful growth strategy of Reckitt Benckiser over the last 18 months or so, the valuation gap between consumer goods companies has continued to close. The outlook for the consumer remains the overriding factor guiding investors, with prospects harder than ever to judge. Nonetheless, whilst today's update appears likely to add to nerves, the group's immense cash flow and exposure to emerging markets are likely to continue endearing it to investors. Market consensus opinion currently denotes a buy."

China Gold FTSE India