Unilever full-year turnover falls

21 January 2014

Consumer goods maker Unilever posted a decline in full-year turnover today, with a slowdown in some emerging markets hitting sales.

The Anglo-Dutch maker of Ben & Jerry's ice cream, Lipton tea and Dove soap, which generate over half its sales from developing and emerging markets, said turnover for the full year was down 3 per cent, hit by foreign exchange rates and divestments.

Underlying sales were up 4.3 per cent for the year and 4.1 per cent in the fourth quarter.

However, fourth quarter sales growth at the maker of Magnum ice cream and TRESemme shampoo, beat estimates, as emerging markets rebounded.

Revenue excluding acquisitions and currency fluctuations rose 4.1 per cent in the three months through December, according to the London-and Rotterdam-based company's statement. 

Growth in emerging markets picked up significantly with sales in those regions increasing 8.4 per cent, better than the third-quarter's 5.9 per cent gain.

The company generates 57 per cent of its revenue from countries such as India and China and on 30 September said that slowing growth in those regions would weigh on second-half sales.

Bloomberg quoted Jeff Stent, an analyst at BNP Paribas as saying in a note, given the considerable anxiety ahead of this release a  positive reaction may be expected today.

Unilever shares were up 3.3 per cent to 29.79  in early Amsterdam trading, after the stock had fallen 1.5 per cent this year, among the five worst performers in the Dutch benchmark AEX Index.

Bloomberg quoted chief financial officer Jean-Marc Huet as saying by phone that results in emerging markets were  ''pleasing,'' despite decelerating economic growth and depreciating currencies.

Indonesia, Brazil and India, which together account for 18 per cent of Unilever's sales, have each seen their currencies fall over 10 per cent against the euro over the past year, according to Bloomberg data.

Underlying sales in developed markets were down 1.7 per cent, with markets not showing any sign of improvement, according to Unilever.
Personal-care came in as the best-performing product category in the quarter, with underlying sales growth of 7.3 per cent.

Sales of home-care products such as fabric cleaners and fabric conditioners were up 6.5 per cent, outpacing growth of 1 per cent in foods.

Revenue in the refreshments division was down 1.2 per cent on weak spreads sales in North America.

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