Unilever has reported a 7% increase in full-year pre-tax profit to E4.83bn, on sales up 3% at E39.64bn.

Its business in Europe returned to growth of 1% during 2006, with “encouraging improvements” in the UK and Germany, while sales in the US were 2.4% ahead.

“We expect the business and competitive environment in 2007 to be broadly unchanged, with consumer demand remaining modest in Europe but robust elsewhere,” said group CEO Patrick Cescau.

“Prospects for home and personal care input costs are more favourable than in 2006 but there has been no let-up in the rise of foods commodity prices,” he added.