Unilever sales fall to four-year low

Unilever, the world's second-biggest consumer-products maker, reported the slowest quarterly sales growth in four years as demand for its soaps and spreads declined. So-called underlying sales rose 3.2 per cent in the third quarter compared with a year earlier, the British-Dutch maker of Clear shampoo said.

That compares with 5 per cent growth in the first half, while the median estimate of 14 analysts surveyed was for a 3.3 per cent gain. The Magnum ice-cream maker said sales growth will accelerate in the fourth quarter, driven by innovation. Demand has slowed in emerging markets, where the company generates more than half of its revenue, and failed to pick up in North America and Europe amid higher levels of competition.

“We are not planning on any improvement in market growth – things remain volatile,” chief financial officer Jean-Marc Huet said. “Emerging-market countries have slowed to 6 per cent to 7 per cent growth and that is good planning for the quarters to come. We want to do better than those rates.”

Unilever said last month that sales growth in the quarter would be 3 per cent to 3.5 per cent, hurt by weak currencies in developing countries, which account for 57 per cent of revenue.

In Europe, Unilever sold more products overall as it cut prices and as warmer weather buoyed demand for frozen treats in the north of the region, bringing underlying sales growth to 0.4 per cent.

“The absence of mature market growth is a salient feature relative to a number of its peers,” Oriel Securities analyst Chris Wickham said in a note to clients.

Revenue growth in emerging markets slowed to 5.9 per cent compared with 12 per cent in the same period last year. It’s the first time since the end of 2010 that sales in developing markets such as India and Indonesia increased less than 10 per cent. – (Bloomberg)