Thank you. Good morning, welcome to Unilever's first quarter trading update. Graeme will begin with an overview of the results and performance in each of our three divisions, I will then cover the regions in more detail before Graeme rounds up with the outlook for the year. We expect the prepared remarks to last for around 20 minutes, leaving plenty of time for Q&A. First, I draw your attention to the disclaimer to forward-looking statements and non-GAAP measures. With that, I hand over to Graeme.
Thanks, Richard. Good morning, everyone, welcome to our Q1 trading update. It's been a busy quarter, not least for Alan, our CEO, who's been out and about meeting many of our stakeholders. I'm delighted to say that Alan is with Richard and me this morning to lend a hand with the Q&A after we finish the formal bit of the presentation. Let's start by looking at the headlines for the quarter. We've had a solid start to the year, delivering 3.1% underlying sales growth in the first quarter. The delivery was well-balanced, with price making up 1.9% and volume 1.2%. We continue to have momentum in emerging markets, growing 5% against a prior year comparator that was 5.1%. 3.2% of our emerging market growth came from price.
Growth in developed markets was slower, at 0.3%, as we lapped a strong start in North America in the same quarter in 2018. Argentina's hyperinflation status continues to impact our reported growth as it has for the past two quarters. The removal of all Argentina pricing in Q1 reduced our reported growth for the quarter by 80 basis points, Richard is going to come back to that with a little bit more detail later on. Looking now at the quarterly time trend, you can see a steady improvement against the fourth quarter, with more volume and similar levels of price, which began to pick up, as you know, in the second half of 2018. Growth was broad-based across the divisions. Beauty and personal care grew by 3.1%, Home Care grew by 6%, Food and Refreshment grew by 1.5%.
We're pleased with a solid start to the year, we're focused on accelerating growth in the months ahead to keep us on track for our 2019 guidance of 3% to 4%. Let me give some more detail now on our emerging markets. We grew by 5%, with volume growing faster than in Q4. This volume acceleration is encouraging, with price at the same level as last quarter. China's performance remains strong, Indonesia continues to see mid-single-digit growth driven by beauty and personal care. Brazil had another good quarter with balanced price and volume growth as it continues to navigate a slowly recovering economy. There are, of course, some challenging markets with high inflation and tricky economics, such as Turkey and Argentina, where we are seeing an impact on volumes. We are pleased with the consistent performance in India, even in slightly slower markets.
I can't make any further detailed comments on India performance until Hindustan Unilever issues its own results next month. Overall, this is a high-quality growth performance from our emerging markets, especially when you consider the volatility and the widespread of market conditions. We are operating in unusually uncertain markets, with looming questions around the strength of global trade, issues in the Eurozone, and moderating growth in the U.S. After two years of GDP growth of 3%, Oxford Economics is now forecasting 2019 GDP growth at 2.5%, picking back up to 2.7% in 2020. We consider that our markets are growing at around 3%, it is a mixed picture. We've seen some slowdown in developed markets, mainly the U.S., which started to slow in Q4. There has, however, been some offsetting pickup in the emerging markets.
We see some acceleration in Southeast Asia and a small improvement in Brazil, although overall Latin American market growth remains fairly lackluster. The market continues to grow well in India, although the pace of growth has slowed a little compared with last quarter. As expected, more of the growth in emerging markets continues to come from price. This market growth is in the context of continued geopolitical uncertainty around trade wars, some key elections in many countries, and a rise in popular protests. Though these factors impact currencies, inflation, and consumer demand, our local businesses are experienced in responding rapidly and effectively, and I think you can see this in our solid delivery. Let me turn now to the divisions. Beauty and personal care grew by 3.1%, with 1.9% delivered through volume growth. Growth was again broad-based, with skincare and deodorants delivering strongly.
Growth in hair was more modest in the context of strong competition in some of our key markets. Big global brands such as Dove, Sunsilk, and Pond's delivered strong growth, as did the relatively new and much smaller brand, Schmidt's Naturals. Carver Korea was less impacted by the change in the Daigou legislation in China than in the fourth quarter and saw good growth overall, driven by the mainstream China retail and e-commerce channels. Innovation in beauty and personal care is strong. In the high-growth segment of clinical deodorants, we have launched a full range of formats through the use of a breakthrough technology better serving consumer needs.
Equilibra, which is our nutritional supplements brand, positions us well to further explore the growth trend that sits on the boundaries between natural health, beauty, and wellbeing. In our growth channels, prestige grew by double digits with continued strong growth from Hourglass and our biggest prestige brand, which is Dermalogica, through innovations such as BioLumin-C. The Dollar Shave Club continues to do well. Southeast Asia is one of our growth geographies where innovations such as Pond's clay cleansers are addressing a growing trend space. Our drive to build strong purpose in all of our brands is very evident in beauty and personal care with campaigns such as the recent Lux Smash the Label campaign in China, which encourages women to defy judgments and express their femininity unapologetically. It has begun well, it's contributing to double-digit growth for Lux in China. Moving to home care.
Home care grew by 6% with 4.8% from price and 1.1% from volume. Increasing commodity costs led to pricing being landed across most of the large countries. The growth was broad-based across the 3 categories of fabric solutions, fabric sensations, and home and hygiene. Naturals and sustainability are key growth drivers in home care, and Love Home and Planet in the U.S. is a good example of an innovation using natural ingredients and recycled plastics. Seventh Generation has been a pioneer in the growth channel of e-commerce. Its ultra-concentrated laundry detergent was designed specifically for online by being smaller, lighter to transport, and more convenient to handle and use, and yet still offering great bio-based stain-fighting power in a natural and clean detergent.
In China, one of the big home care growth markets, we've extended our laundry brand, Omo, into the new category of dishwash and have made a strong start. Still on dishwash, our big global brand, Sunlight, grew strongly in the quarter, introducing 100% recycled bottles into South Africa, where it's the number 1 selling dishwash liquid with over 75% market share. The introduction of the new bottles is a significant step forwards for our South African business on its journey to improve its plastic footprint. Blueair grew, although this was against an easier comparator. We expect to continue to see growth in air purification throughout 2019. Turning to foods and refreshment. Food and refreshment grew by 1.5%, with 0.5% coming from volume. Ice cream had a strong quarter at 7%, with growth across all regions.
Foods had a weak quarter, with retail pressure in Europe and heavy competitive pressure in our North American dressings business impacting the overall foods delivery. Transformation of our foods business is key, and growth trends such as vegan and naturals are important elements of our innovation funnel for both new and core brands. In January, Knorr launched the Future 50 Foods campaign in conjunction with the World Wide Fund for Nature. The report focuses on 50 foods that we should eat more of in order to have a lower environmental impact. Looking at the channels for food and refreshment, growth in out of home and e-commerce is a key focus area, and Magnum is an important brand in these channels. Magnum has seen per annum growth of 7% over the last three years, led by both the core and new innovations.
In Southeast Asia, the UniCornetto leverages the global trend of unicorns. Before you ask, I didn't know about this global trend either, but from a good start in Thailand, the UniCornetto is now rolling out to more countries. Tea was flat in the quarter, with growth in emerging markets, but offsetting challenges in developed markets where our large black tea portfolio anchors us in an area of market weakness. Our U.K.-founded tea brand, Pukka, is helping to offset this weakness and is now selling across Europe, North America, and Australia, and is growing in strong double digits. Before looking at the regions, I want to share how our acquisitions are performing. Bolt-on acquisitions are quite fundamental to transforming our portfolio more quickly into faster growth spaces. Now we're in 2019, most of these acquisitions are included in our underlying reported sales growth.
As you know, we use bolt-on acquisitions in order to enter high-growth segments and channels and to accelerate our growth in priority geographies. We've completed 29 acquisitions since 2015, some of which are shown on the chart here. Most of these businesses have been integrated, and some operate on a more standalone basis. I'm not going to go through the detail of each acquisition's performance, but it is helpful to share some overall numbers. We've acquired EUR 2.6 billion of turnover, including building a new prestige business of over half a billion euros. We've also disposed of EUR 4 billion of turnover. The net consideration for all of that has been EUR 2.4 billion. In aggregate, our acquisitions are growing at double digits, so they're accelerating our growth.
In fact, when we take both acquisitions and disposals into account, we estimate that this portfolio change has added over 70 basis points to our growth in the quarter. If things continue in a steady state, we expect that this will be the same for the full year. Our strong savings programs and innovation drive our margin improvement, and that margin improvement in turn supports a continued high return on invested capital. That allows us to use bolt-on acquisitions to accelerate the growth profile of our overall portfolio. In this way, we've been able to deploy quite an active M&A program whilst maintaining high returns overall. With that, let me hand back over to Richard to cover the regional performance.
Thanks, Graeme. Asia/AMET/RUB grew 6% in Q1, balanced between volume and price. China grew 8% with strong growth in Home Care, Foods and Refreshment, and e-commerce. Southeast Asia, and particularly Indonesia, continued to pick up with all countries in the region delivering mid-single digit growth. Turkey had a solid Q1 of over 20% growth and saw positive volume despite uncertainty in the market and high inflation from continued devaluation. Africa declined, driven by trade and economic disruption as a result of the elections in Nigeria and the introduction of a new currency in Zimbabwe. Latin America grew 0.4% with nearly 5% price and negative volume of 4%. Based on our measures and estimates of market growth, we are growing ahead of the markets in Brazil and Argentina. Sales in Central America have declined, whilst in Mexico, growth has slowed a little as a result of some retailer destocking.
Brazil had a promising quarter as we landed price increases. We expect the momentum we have seen in Brazil to continue, even though the market remains muted. Argentina continues to be hyperinflationary with high pricing affecting consumer demand. As a reminder, in Q3 2018, we removed all Argentinian price from our headline USG number. We committed to give the detail of the Argentinian numbers and their impact on reported Unilever growth each quarter. In Q1, volume was minus 11% as consumers experienced even higher price inflation than in Q4. By comparison, we estimate that the overall market is seeing volume declines of around 20%, so we are ahead of the market on volumes, protecting our strong position. The impact of negative volume on group UVG is about 10 basis points in the quarter.
The impact in 2019 is smaller than in 2018 because Argentina is now a smaller part of total Unilever as a result of the heavy devaluation. The removal of pricing has reduced Unilever's quarter one USG by 80 basis points. We continue to price as necessary, and whilst the environment will remain difficult for some time, we are confident that, as usual, when one of our key emerging markets goes through an economic crisis, we will come out stronger. In North America, we grew 0.4% from both price and volume. This result is in the context of a tough volume comparator and a slowing market, which saw growth for the quarter about half that of 2018. We had a strong performance from skin cleansing, ice cream, and deodorants, where Dove and Schmidt's Naturals led the growth.
There was some shift in promotional sales from March to April as a result of the later Easter, which mainly impacted the foods business. Our dressings business in North America continues to be engaged in heavy price competition. From a channel perspective, e-commerce is growing around 60%, both from omni-channel and pure plays. We delivered in Europe around 0.7 of underlying sales growth, with 0.8% volume. Both Western and Central Eastern Europe delivered volume growth. Ice cream had a strong start to the year with innovations such as Kinder and Magnum continuing to grow well, and in Home Care, we saw good growth in Italy and France through home and hygiene. Despite a solid start, the market in Europe continues to be challenging, with a slowdown in the last 12 weeks across several categories. Turnover for the quarter was EUR 12.4 billion.
Underlying sales growth added 3.1%, acquisitions and disposals decreased turnover by 5.3%, following the disposal of spreads in July 2018. Currency translation increased turnover by 0.7%. Based on the latest spot rates, we expect a positive currency impact of around 1% on both turnover and EPS in 2019, which is a welcome return to more benign currencies after a particularly strong impact in 2018. This is important because we plan the business using long-term average currency rates rather than short-term fluctuations. Now I'll hand back to Graeme to wrap up.
Thanks, Richard. Just before I finish with our priorities for the year and our outlook, I would like to just spend a moment on our Sustainable Living Plan and draw your attention to that, because this month we issued our annual Sustainable Living Report, and you'll be able to find that on our website. Since 2010, we have hit many important milestones in making sustainable living more commonplace in the world, while at the same time, we've delivered attractive returns to shareholders. These are connected. Just to paraphrase Alan, who said this publicly a few times now, it is not purpose ahead of profit, it is purpose driving better profits. Looking at just a few of the numbers, we've now reached over 650 million people through our programs on hand washing, on safe drinking water and sanitation, on oral health, and on self-esteem.
We've delivered a 31% reduction in waste, we've reduced our CO2 emissions by 52% from better energy efficiency in our factory network. Our company continues to be more diverse and inclusive. Women now make up 49% of our 15,000 managers. Many of our brands such as Dove, Lifebuoy, and Vaseline already play an integral role in our sustainability agenda, and you can expect us to drive purpose much more explicitly across all of our brands in the months and the years ahead. This is just one example, but those of you who might have traveled through London by train this morning might have seen our Simple brand on the cover of "The Stylist" commuter magazine. It advertising our launch of Simple's new biodegradable cleansing wipes. Let me turn now to our 2019 priorities. We want quality growth, and that's growth that is consistent, competitive, profitable, and responsible.
Q1 is an example of good quality growth. For consistent growth, we will continue to invest behind our brands appropriately as we have been doing. We will be competitive, driving growth ahead of our markets. We need to be profitable, which means strong efficiency and savings programs and the right level of both price and volume. Finally, growth must be responsible, which, as I've just explained, means having purpose in our brands and the Unilever Sustainable Living Plan at the heart of everything that we do. We must be future fit, accelerating our speed and our digital capabilities. We will continue to drive efficiency and effectiveness through our ZBB, 5S, and net revenue management programs to allow for reinvestment in the brands, products, and channels of the future. This is the efficiency that delivers the 2020 underlying operating margin of 20%.
Let me confirm the guidance for 2019. We expect underlying sales growth to be in the lower half of our multi-year 3%-5% range. We will continue to progress on the underlying operating margin through a focus on savings programs and continued restructuring as we take out costs. We will continue to invest competitively behind our brands, both in media spend, in building new capabilities, and in people, such as in our digital hubs. We will target another year of strong cash flow and maintain our leverage level. As you'll note from today's trading statement, we're pleased to announce a further increase in our dividend for 2019 by 6%. Our outlook on all other items remains the same as it was in January, with tax around 26% at an interest rate on net debt of around 3%.
That's the end of our prepared remarks, but before we move on to take questions, Alan, is there anything you'd like to add?
Well, thanks, Graeme and Richard, and good morning, everyone. I must admit, it's certainly been a busy quarter with many highlights. Probably the highlight of all the highlights was listening to Graeme talking about the UniCornetto and the global unicorn trend. One thing I've spent a lot of time on since January the 1st is carefully listening to lots and lots of Unilever's shareholders and other stakeholders. I must admit, it's been a very helpful exercise. It's confirmed a lot of the views and the feedback that I expected to hear. Frankly, I want to stay in listening mode by joining this morning's session. I'm very keen to know what's on our investors' minds. I also want to get a sense of the role that these quarterly trading statements play in helping our stakeholders to understand our business.
For the half year and full year results, of course, Graeme and I will continue to do a double act. Certainly, this has been a solid start to 2019, with a good quarter one, puts us on track for the guidance that we've given for the full year. Yes, we will be focusing on accelerating growth as our number 1 priority. Actually, I think with that, it'd be best to use the time that we've got left in more of a dialogue with our friends who have chosen to dial in and join us this morning. Richard, I'm going to flip it right back to you.
Thanks, Alan. We'll now take questions. As a reminder, if you want to ask a question, please press star 1. If you wish to cancel your question, please press star 2. If you're listening to the conference call on a speakerphone, please use the handset while asking your question. Finally, please keep your questions to a maximum of two. I see that our first question is from Richard Taylor at Morgan Stanley. Go ahead, Richard.
Good morning, gentlemen. Rich Taylor from Morgan Stanley. Three questions from me. The first one, I think you commented in your statement that you're gaining share in 60% of markets. That's after growing in line pretty much for the last four quarters. Maybe can you give us a bit of color on what's changed, what you've done differently that's enabled that change? That's the first one. Secondly, perhaps a longer term question. In order to consistently hit the top end of your medium term guidance, is the most important factor a further pickup in emerging market growth, or is it further changes to the portfolio? Finally, I know you've made a number of leadership changes so far this year, particularly recreating the COO role. Can you give us a little bit of color behind that, please?
Morning, Richard. How are you doing? Let me take the first two of your questions and then let Alan pick up the third one. On the business winning share, we think we're growing about the level of our markets right now. That equates to around about half of our business winning share from a turnover perspective. However, as we click down a level below that, we're quite encouraged to see that 60% of our business is winning volume share, so high quality share, in three important constituents that we measure. First of all, 60% of our business is winning volume share in beauty and personal care, 60% of our business is winning volume share in the emerging markets, and 60% of our business is winning volume share in home care.
Very good lead indicators that we're getting that extra bit of outperformance from a competitive perspective back, and that correlates to that acceleration of growth. That leads to your why is that, and what are the key things behind that, I think you said. Fundamentally, being close to the consumer, having the right messages for the consumer, having the right innovations for the consumer. Of course, there's many ways that we're doing that now. Traditional, more linear innovation. We're doing it through launching new brands, and we're doing it by taking brands that we have that we know are on trend, moving into the faster consumer growth spaces and rolling those out more quickly across our network. We're seeing the uptick in the speed with which we're able to react around our business. That, of course, comes from our Connected for Growth organization.
I think the single biggest reason why we're getting that spark of competitiveness firing again is because the changes with Connected for Growth are working, and they're bedding down across our organization globally. The question on what would it take to get into the top end of the medium-term guidance, is it a step up in emerging market growth or a change in portfolio? I think the biggest determinant will be a step up in category growth and in the growth that we see across our footprint. Of course, with 60% of our business in the emerging markets, that's where we would look to. If I were to call out a more specific area, because actually our emerging market growth at 5% I think has been a very good performance with almost 2% from volume.
When you consider that that has almost zero contribution from Latin America, which has historically been a big engine for us, I think you see that in the AAR sort of Asia part of our emerging markets businesses, we've got some good growth there. I think the big trigger would be a return to growth in Latin America. We're not really calling that yet, but we are seeing good signs, particularly in Brazil, that we're starting to navigate through that very difficult economic period that we've had there. Alan, do you want to take Richard's third point?
As soon as Richard Williams had said a maximum of two questions, you dived in with three, we'll give you your head and address the third one. On leadership changes, we announced several moves in the Unilever exec, there were really two elements that were structural. The first was to appoint a Chief Operating Officer, we really have just the man for the job, Nitin. He's perfectly cast for that role. There was a second and more subtle element, which is that we've removed any dedicated regional layers. The last place where we had dedicated regional layers in Unilever was Europe and Southeast Asia. Now we've moved to an organization where we have 14 or 15 big markets that will report directly to Nitin, and those will take care of any surrounding markets.
For example, India will report to Nitin and supervise Pakistan, Bangladesh, Nepal, and Sri Lanka. That model is now replicated, which means that we now have a faster, more agile organization directly connecting global to the big markets. Secondly, Nitin will bring a high level, I think, of in-year operational grip on the business, driving the in-year performance and P&L delivery. Thirdly, there are initiatives that we need to land across the company at scale quickly. That's increasingly a characteristic of our business, and Nitin and his team is perfect venue for landing those big capability driving initiatives. I'm quite optimistic this is one of the highest leverage short-term moves that we'll get to accelerate the growth of the business.
Thank you, Alan. Our next question is from Jonathan Feeney at Consumer Edge. Would you like to go ahead, Jonathan?
Thanks very much, Richard, good morning. The first question would be, Graeme, you gave us the net, I think you told us net EUR 4 billion for recent acquisitions, net of divestitures, added 70 basis points to sales. If you could give us a sense what profit, I don't know if you want to call it accretion, dilution on a net basis, what was the cost or your total impact on profit roughly, if you have that number handy? Secondly, Richard, you cited an e-commerce growth number of 60%. I wasn't sure if that was in a regional discussion or if that's a 60% global number. If it's in fact the latter, could you give me a sense of how much contribution that was to underlying sales growth globally? Thanks very much.
Morning, Jonathan. How are you doing? Let me pick up the first one while Richard thinks about the second. It's a really difficult question you've asked, actually. I mean, the net M&A expenditure we've had is EUR 2.4 billion, as I said in the prepared slides. I think it is really important to think about why we do that. We're doing M&A, a bolt-on strategy, to accelerate the movement of our portfolio into the higher growth spaces. That can take place through two lenses, basically. You can look at it through what I call this kind of big P portfolio or macro lens, which is movements between our divisions. What you see there is more beauty and personal care, less food and refreshment, would be the sort of macro shift there at a divisional level.
Of course, within each of these businesses, we have to have a relevant consumer portfolio. What I call the micro lens of that, or the small P portfolio, is the way in which we use M&A to accelerate into high growth spaces, be that more premium, be it therapeutics, be it naturals, et cetera. Or be it something like Dollar Shave Club, which takes us into entirely new channels. There's a range of profitability, of course, across all of that. Of course, you would expect that when we look at M&A proposals, we have a very detailed process for that, and we expect to, if something is dilutive to our profitability in the short term, we look at the period over which it recovers and gets back to being accretive to profitability and earnings and value creation.
In aggregate, I can't answer as an up or a down, but what I would like to pick up on is something that we mentioned obliquely in the presentation, but that is the fact that all acquisition will short-term dilute your ROIC. One of the features, I think, of our bolt-on strategy, which has become increasingly popular, I think, across the sector, is that you have more people chasing fewer assets, and therefore, there's been inflation on pricing. That means that the time to value creation, and we measure that by the ROIC WACC crossover, or payback period, I guess, in our acquisition proposals. That has definitely stretched out. That's why I think it's very important that the margin improvement we can deliver in Unilever from our productivity programs is highly strategic. It's not just margin for margin's sake.
It's margin because that allows us to maintain that high ROIC. It backfills the ROIC, because acquisitions in the short-term will dilute your ROIC. Of course, we've got ROIC in our management long-term performance metrics for all of our managers. There's a nice tightness there around how we use M&A in that bolt-on strategy.
Jonathan, your e-com question, the 60% was North America, and that was just a Q1 number. Just in that period, it grew about that. Just to help you size it, e-com is around 2% of our North American business, you can probably size it using that.
Thanks, Jonathan.
We've got a lot of questions lined up, I better move to the next one. Next question is from Celine Pannuti at JPMorgan.
Good morning. I'll try to make only two questions here. My first one is in terms of the full year, the growth, how do you see that balancing out? I think Q2 last year, you had this issue in Brazil. Are we right to expect that there should be an acceleration? In general, was there anything specifically that you would call out in the first quarter that was unusual? Then, if on the same topic, because, I think, Alan, you said that your focus was to accelerate growth. What, I think from a previous question, the answer in terms of what worked, you talked about C4G, you talk about how the organization is growing together. I just wanted to understand from your perspective, what else you think you need to add for this acceleration to happen. My second question is on Europe.
You talk about a more challenging environment. Can you give us a bit more color on that? I think there were some retail disputes, news of retail dispute in the quarter as this impacted Q1, or shall we expect maybe pricing to decelerate as we go into the rest of the year? Thank you.
Thanks, Celine, and good morning. Look, we are guiding to 3%-4% for the full year. We're not going to pin ourselves down on a quarterly by quarterly number against that. However, mathematically, if we start at 3.1 in Q1, if you hear me talking about accelerating through the year, obviously we'd expect some higher numbers to show up. Q2's got a couple of things helping us. Last year, we had the Brazil trucker strike in Q2, and we had Easter. We have an Easter effect that will get in the way. On the other hand, we had a very strong ice cream season in Q2 last year. Yes, I do think we'll see a stronger top line in Q2. Beyond that, I don't want to comment on exactly the phasing quarter by quarter.
Graeme already hinted at what it's going to take to get our growth rate to continue to accelerate. We have to keep working really on three axes. We've got to keep working on evolving our portfolio. We've got to keep working on the full channel shifts that are happening, making sure that we take advantage of the higher growth opportunities in places like out of home consumption, e-commerce, beauty stores, and a few funny pockets like, for instance, cash and carries Brazil happens to be a very high growth space right now. There's a channel dimension. The third is geographically, to make sure that we keep our emerging markets in momentum and take advantage of our strong footprint there. If we can do all of that and keep working on our speed, agility, and nimbleness, that's what it'll take to keep accelerating through the year.
To Richard's question earlier, move up into the top half of that range in successive periods. Graeme, maybe you could talk about some of the specific questions around Europe.
Yeah, I will. Morning, Celine. On the specifics of the European pricing landscape, I think the best way to describe it is mixed. There are markets in Europe, such as the Netherlands, such as Greece, where we've been able to get ahead on a little bit of pricing. By and large, I think when you look at the marketplace in Europe, it's one of high promotional intensity. That continues to put pressure on pricing. It's particularly strong in the foods space. That's where we feel it most. Of course, we've got a big foods business component in Europe. Tough market. Impacted by specific retail pressures, which have been quite centered on Germany and in France. Despite the declines in the market in Germany and France, we are winning share in savory in Germany. We continue to evolve and modernize that foods portfolio.
The strategy, which we've shared a few times on foods to fundamentally modernize the portfolio, is probably most acute in our developed markets and in Europe in particular. We have been impacted by, and I think you sort of alluded to it slightly there, Celine, some retailer disputes in Germany and France. One or two of those you might have read about. We're not going to comment. We never would on a specific retailer discussion. What I would say is that these things happen. We tend to manage them well. It's important that we shift our business into a healthy state. Sometimes that means we have to take a bit of short-term pain in order to improve the overall longer-term outlook. That's exactly what we're doing here.
I just want to underscore your points, Graeme, that shifting our portfolio in Europe into higher growth spaces is a big job to be done. Dealing with a retailer dispute that breaks out here or there is a very small thing that we can easily take in our stride. Just to put some sense of proportionality around the sub-points to your question, Celine.
Okay. Thanks, Celine. We've still got a lot of questions, actually, to get through. The next one is from Martin Deboo at Jefferies. Morning, Martin. Do you want to go ahead?
Richard, thanks. There's a short one and a longer one. I'll ask the short one first or I'll forget it, which was there anything unusual in Home Care in Q1 that drove the strong result? The longer one is an attempt to try and get away from the quarters in the spirit of what Alan said at the start and the emphasis on quality growth. If you take a step back from all this, the good news in Q1 is it looks to me like the underlying trends have continued to improve and emerging markets are improving. The problem, if there is one, is the interrelated one of slow growth in developed markets and slow growth in Food and Refreshment, which I'm sure as you know, are closely intertwined.
My strategic question is, first of all, is that a diagnosis you would recognize for the business? Secondly, if it is the answer to shift resource growth investment into developed market and Food and Refreshment, or is the analysis more that the situation is relatively hopeless and the real answer is just to keep withdrawing capital from those parts of the business as you did in the 2013 period? I suppose what lies behind it is the feeling that I've always had with Unilever, that because the glamour in the business is in HPC and emerging market, the resource and the good people all get sent there, and somehow developed market and Food gets left behind, and that's hurting you. Just value comments on that really. Those are the two. Thank you.
Martin, as usual, very perceptive questions. On Home Care, it's pretty straightforward. Our Home Care portfolio is the one that's most exposed to currency moves. The urgency on taking price becomes more important on Home Care when commodities are moving in an upward direction, compounded by the fact that Home Care is a strong emerging markets footprint where, quite frankly, it's easier to land price increases. That's why you see the strong price leverage. We're delighted that so far we haven't seen volume elasticity there, and we've been able to show volume growth alongside that strong price contribution. I think that's the only special characteristic of the quarter for Home Care. To the bigger point, it is a bigger point, is about the slower growth in developed markets and Food and Refreshment. I would say see previous answer.
It is a structural challenge that we need to address by getting our food footprint more into healthy spaces, and that's why you see us shifting the portfolio into things like vegetarian food, healthy snacking, children's nutrition, and moving out of things like spreads and sausages, not to put too fine a point on it. We've got to do work on the portfolio. We've got to do work on our channel footprint in Europe. The only thing I would totally disagree with is that somehow or other we prioritize our good people into the emerging markets and into HPC. That's not true at all.
We have a fantastic team of people working in Europe and on foods and on foods in Europe. In fact, one of the things we deliberately do is try to put some of our best people onto our most difficult challenges, and reward them accordingly when they turn it around. Grappling with the structurally lower growth in foods in Europe, yes, that's a high-quality problem that we're dealing with.
All right. Thanks, Alan. Thanks, Martin. Next question from Karel Zuta from Kepler. Go ahead, Karel.
Yes. Good morning. Thanks for taking my questions. I've two. First one is quite an easy one on the timing of Easter and the impact on the phasing on your foods business. The second one is on your oral care, your toothpaste business. That was down again in 2019, first quarter, despite the pick-up we see in several emerging markets where you play, and also in 2018 it was flat. What is needed in your oral care business to do better? Because global growth is quite good, but you're not very big on the global scale. Those are the two questions. Thank you.
Graeme, do you want to-
Yeah
have a crack at the Easter timing?
Sure. Karel, we haven't really gone into the detail of calculating a specific impact on it. There's definitely an impact there. It's probably relatively small. I can tell you where you see it most is on our foods business, obviously, both in Europe and in North America. Thinking about our foods business and savory business in North America, it was flat, and the continued pressures in our dressings business in North America, you're definitely seeing an impact there, which is compounded by the timing of Easter this time round. We haven't called it out specifically at all.
As far as oral care is concerned, Karel, first of all, it has been one of the slower-growing beauty and personal care markets that we've observed. Secondly, our oral care business is a very unusual business for Unilever in as much as it's not truly a global business. There's half a dozen or eight countries where we are very strong and have high shares, and we have got a competitive situation now where in almost all those markets, the local players have been faster onto some of the trends. It seems like an obvious point to make, but things like naturals. Some of the channels that are growing very quickly in the developed world are channels we're not strong in. All I would say is watch this space.
We intend on continuing to be a strong player in oral care, leveraging the massive leadership positions that we have in important markets for the future, like Indonesia, Vietnam, Indonesia, Brazil, parts of Africa, Nigeria, and our leadership position that we have in France. Watch this space. We announced a couple of weeks ago the acquisition of two oral care brands to compete in the pharmacy channel in Europe. That'll be an important play, and we've got lots of naturals brands in our portfolio that lend themselves perfectly well to extension into oral care. Those are the types of moves on the portfolio and channel dimensions that I was referring to earlier.
All right. Thank you. Moving quickly to our next question because we still have quite a number to get through. Alan Erskine from Credit Suisse. Do you want to go ahead, Alan?
Yes. Good morning, guys. Just two questions from me. The first one is on Latin America. If I've done my math correct, I think ex-Argentina, your volumes were down something like 3% in Q1, which was a deterioration on Q4 without any tougher comparisons. I just want to understand better why that performance deteriorated sequentially. My second question is on Carver. I think if I heard you correct, you said Carver grew year-on-year, which given it was down, I think 30% in Q4, implies quite a big sequential improvement, and I think probably better than you were expecting. Can you just give us more granularity exactly as to why Carver dipped so dramatically in Q4 and seems to have performed so much better in Q1? Thanks a lot.
Graeme, do you want to have a crack at Latin America? That seems the harder of the two questions.
Thank you.
I'll.
Thanks, pal.
Pallet.
Yeah. Thanks. Morning, Alan. How are you doing? First thing, on Latin America, if I might digress just for a second, we all seem to be dealing with Argentina pricing differently, and it's a bit of a bugbear of mine, and I had a go at one of the Big Four about it the other day. It must be very frustrating for you guys. It certainly is for me to see everybody accounting for Argentina pricing in a different way. I think we've been very prudent in how we've done it. Sorry for the lecture, the slide we have to put on at every one of these calls, we do think it's important to give you all the detail on it. You've unticked that nicely because volume performance in Latin America was down a little bit in Brazil in particular.
We weren't down by 3%, we were down about half of that. We took quite a lot of price across the business in Brazil because of inflation, et cetera, and we've seen that elasticity there. I think we're calling a
Steady recovery in Brazil, coming out of really a historical period of very significant economic turmoil. There's very substantial channel shift. We're performing well in cash and carry, which isn't a measured channel, and I know we're being competitive across things in Brazil. We've got share recovery in the big categories of DEOs, in hair and fabric solution, and we're bringing a lot of innovation into the marketplace. The ice cream market in Brazil is becoming a little bit less focused on price, and I think we'll see a volume pickup start to pull through there. The other thing to mention, to your point about flat volumes in Latin America, negative volumes in Latin America, is Middle Americas, which has been highly competitive. Again, we're seeing price go in, but the consequent reaction in volumes.
As I said earlier, I think our emerging markets performance is very high quality at the moment because you're not seeing much of a contribution from Latin America there. Historically, you would've seen quite a lot of Latin American pricing sitting in emerging markets performance. The 5% that we've delivered in the first quarter, with two from volume, is consequently very high quality.
Instead of hinting about the Carver business, let me open up a little bit and share what's going on there. Carver is, to slightly simplify, a business of thirds. A third of the business is sold in Korea to Koreans, a third of the business is sold in China to Chinese, and a third of the business is sold in Korea to Chinese who carry it back to China and sell it online. Those informal importers are what's called the Daigou trade. In the fourth quarter of last year, the Chinese government started to clamp down using taxation on online sales on that third part of the business, the bit that's bought in Korea by Chinese people and taken back and sold informally online. That bit, we were quite pessimistic about the rate that that would come back, and it has come back much stronger than we expected.
Still our growth is coming from us taking control of managed channels in China. The result of all those moving parts is that Carver Korea grew high single digits in Q1, which was a little bit of a beat versus our expectations. Hopefully that gives you a little bit of a sense of the dynamics on what is an important, and bang-on trend business for us.
Right. We now have the next question from Eddy Hargreaves at Investec.
Morning, Eddy.
Good morning, all. I just wonder whether you could dig a bit further into North America. I believe you said that market growth had halved. Forgive me if I'm wrong there, but I think you said it had halved. If so, was that relative to the comparative period or relative to Q4 or the last full year? I just wasn't sure about that. Just on the reasons for that, you've obviously called out dressings. Are there any more specifics within that? Gas prices, government shutdown, or whatever, or within the categories. Could you just put a bit more flesh on what you think is happening in North America, and what the outlook for the rest of the year is there, please?
Let me take that one, Eddy. This is Alan. The North American markets have slowed down to about 1% growth in Q4. That's the blended average across our categories, that's carried on into Q1. What we're seeing in Q1 is really a continuation of how we exited last year, that is down, actually it is about half of what the markets were growing at a year ago. The biggest challenge that we have is in our foods business. I'm going to call out two pockets. One we already mentioned, which is a dressings battle that we intend to prosecute through to victory. Secondly, a significant slow growth from our low price ice cream portfolio. All the growth that we're getting in North America is coming from HPC, which in turn ends up being mostly beauty and personal care because we're a very small home care business.
Is there anything else I want to share that just kind of gives you a bit more color? Maybe just that interesting channel dynamic in North America where, of course, e-commerce continues to grow. Really the bigger story is probably that the core mass merchant operators of Walmart, Target are doing well, and where we are seeing growth is from some of those bigger customers. That's against the global trend of big box retailers struggling. In fact, it's good news for us to see Walmart and Target adding some mojo and showing growth.
Even within the e-commerce channel, I think in the U.S., it's very easy to focus very much on Amazon. I think we've got as big a business or even a larger business in e-commerce with our omni-channel retailers, so the Walmarts, the Targets, the Kroger, as we have with the sort of single item purely Amazon model. I find that interesting as well.
Yeah. Good build.
Okay, thanks, Eddy. Let's move now to David Hayes at Société Générale. Morning, David. Do you want to go ahead?
Morning, guys. Thanks so much. Yeah, two from me. Just on the market share commentary that you were making earlier, about 50% taking share, 60% I think you said in the HPC areas, which I guess would by rough default mean in food you're taking around 40% share, obviously, lower in that area. I just wonder whether you can talk about whether that lower market share performance in food is partly because the local competitors are taking more share, and is that partly because your scale advantage is diminished in the food relative to the HPC? I guess also related to that, is there a risk that you need to price lower through the year to try and get that 40% number back up to be on the group average?
A second question, in the past, you've talked at times over the quarters about differing levels of brand support and differing levels of innovation. I just wonder whether you can talk about the first quarter, whether that was a big brand support/innovation period or whether we should expect that to come through in any other quarters or later in the year. Thanks so much.
David, let me kick off with your first one, then Alan Jope, I think he wants to comment on the first point because it's a great area to dig into. Yes, we're winning 60% volume share in home care and beauty and personal care. What's happening within Food? On your question, is it lose to locals? Not really, no. We're engaged in a couple of very competitive environments, a couple of which are in North America. The North American mass ice cream market is the first thing I would talk about. That's about 2% of Unilever. It's a highly volume-driven game, extremely price competitive, extremely low margin. We're pleased, in fact, with the performance of our premium ice cream brands in North America. Magnum and Ben & Jerry's are winning share and performing well.
In that bulk mass business, it's much tougher to win only beyond pricing. That's the first one to call out. The second one I've talked about before a little bit is the dressings business in North America. That is also between 1% and 2% of the total business there. In that, the market overall is declining by about 2.5% because of the very strong pricing action, in that particular sector from competition and from private label. In a bit of a battle of strategic value destruction of a category there. The final one I'd call out in foods again, is developed markets tea, there it's a portfolio challenge for us because we've got such a big black tea business and the growth in developed markets is in fruit tea, herbal tea, and green tea. We're doing the right things in premiumizing our portfolio.
For example, I mentioned Pukka. Pukka is growing at over 20%, and we're rolling it out very quickly from a U.K. base into all the countries in Europe, into North America, into Australasia, et cetera. We're doing the right thing. It just takes time to turn. Not really a battle. Of course, there's locals in foods, but really it is in the big sells with the big players, and when it comes to the developed markets tea business, it's much more a question of portfolio structure.
Let me take the point on brand support and innovation. We watch this like a hawk. The first thing I would comment on is that our efficiencies programs are on track to drive the EUR 2 billion of savings that we need in perpetuity, actually, every year, we'll need that level of efficiency. That may seem like a strange place to start, but I want to underscore that our financial model begins with those efficiencies, creating the funds that we can choose where we redeploy them and how much we turn to the bottom line. As I said, we watch our competitiveness of our spend like a hawk. In Q1, we have not seen a material increase in media intensity, nor even in the latter stages of Q1.
In fact, our share of spend to share of market is up year-on-year and is over 100 now. It's a little bit opaque in our P&L, the exact movements that are happening because we aggregate at quite a high level. Within our brand and marketing investment, you should be aware that over the last two years, we've spent EUR 300 million more in working media and point to sale, which has been funded by a reduction in things like advertising, production, and agency fees, things that the consumer doesn't see. We're reasonably confident that we continue to support our brands at competitive levels. As far as innovation's concerned, I think the short answer to your question is that the aggregate amount of innovation in Q1, I would describe as normative, neither particularly low nor particularly high.
The big change that we've seen over the last, call it 18 months, is an acceleration in our ability to develop and roll out innovation. The C4G organization model, with much less of a regional layer going straight from global to local, is accelerating the rate at which we can develop new products and roll them out. Thanks, David.
Okay, thanks. I'm conscious that we are out of time. I think we've still got a couple of questions we haven't covered. To remind everybody that you can give Laura, Becky, or myself a call, we'll be on the phones all morning. At that point, I will bring the call to a close. Thank you, Alan. Thank you, Graeme. Thank you, everybody.
Thanks very much.
Thanks a lot, everybody. Cheers.