Organic first quarter sales rose at a healthy 5%, but the gains were dashed by the negative impact of currency inflations, which meant that the net sales came in at $4.7bn, representing a fall of 4% compared to the same period last year.
The results were also further impacted by the move by the government of Venezuela to remeasure its local currency, which led to a further negative impact of $45m referred to as an after tax remeasurement charge.
Gains driven by emerging markets and pricing
Gains in sales were driven by emerging markets, gains in overall volumes and increases in average retail prices for products.
Financial analysts generally agreed that the company performed in line with expectations or slightly ahead, with information provider FactSet stating that the revenues were ahead of its prediction of $4.6bn.
First quarter operating profit was $748m in 2015 and $711 million in 2014, while adjusted operating profit was $815m compared to $760m. Net income for the period was $486m, compared $546m for the same period in 2014.
Personal care results
Personal care sales, which account for approximately 50% of revenues, came in at $2.3bn during the quarter, a decrease of 3%, which was impacted by net selling prices and the unfavorable currency translations.
The company said that revenues in the division were mainly driven by the adult care brands Poise and Depend, which helped generate volume growth in the upper single digit figures, while the child care portfolio returned volume growth in the mid-single digits.
Executives at the company highlighted the strong underlying results, which have been boosted by the company’s restructuring program.
"We are off to a very good start to the year. We delivered mid-single digit organic sales growth, significant cost savings and margin improvements and healthy growth in adjusted earnings per share from continuing operations despite substantial headwinds from foreign currencies,” said CEO Thomas Falk.
Looking ahead to the rest of 2015 the company believes that the negative impact of currency translation will continue to impact the business to the tune of 9 – 10%, while operating profit will be impacted by 10 – 11%.
However, the negative impact of the currency translations should be counterbalanced somewhat by deflation of key inputs, including oil-based costs and modestly lower pulp costs.