Unilever has fared better but still faces tough competition

The manufacturer of Ben & Jerry's ice cream and Knorr soups saw sales rise by 4.8% in the July to September period.

The firm said it was confident that it would continue its sales-led recovery, though it is still being outperformed by rivals Nestle and Procter & Gamble.

The latest results were greeted positively by analysts.

"The story looks more convincing quarter by quarter, with good news on margins set to come as cost rises ease and pricing comes through," said David Lang, an analyst with Investec Securities.

'Growth ambitions'

Sales rose in all product categories and regions, with a notable contribution from Europe - which represents 38% of sales - said Unilever.

The UK returned to growth, while France and Germany also performed better.

Shares in the firm - which also makes Omo detergent and Sunsilk shampoo - rose by 3% in early trading.

"Looking ahead, our priority is to improve our operating margin, while delivering our growth ambitions," said chief executive Patrick Cescau.

The quarter saw the firm sell its European frozen foods business.

Unilever has decided to provide shareholders with an additional 250m euros in 2006, up from the originally planned 500m share buyback.