Unilever’s sales drag down

Unilever companyKraft-Heinz’ dumped takeover of British-based FMCG giant Unilever doesn’t appeared to have spurred stronger sales growth, with its third quarter result falling short of analyst expectations.

The Dove, Weis and Lipton owner booked a 2.6 per cent increase in underlying sales in the third quarter, excluding its recent swathe of acquisitions, well below the 3.9 per cent consensus estimate.

Sales in developing markets, which account for more than half of the giant’s total revenue, increased by 6.3 per cent during the period, but that was offset by a 2.3 per cent sales decline in developed markets. Unilever blamed poor weather in Europe and natural disasters in the Americas for the weak sales growth, particularly in its ice cream division, which booked a 1.6 per cent decline in turnover.

“While conditions in our developed markets remain challenging, we are starting to see signs of improvement in some of our biggest emerging markets including India and China,” CEO Paul Polman said. “For the full year, we continue to expect underlying sales growth within the 3 – 5% range, an improvement in underlying operating margin of at least 100 basis points and strong cash flow.”

Unilever’s Asia/AMET/EUB division, which includes Australasia, booked sales growth of 6 per cent on increasing volumes, with China leading the way amid an expansion of e-commerce sales and new product launches. The company said it had made “good progress” against its growth strategy in the third quarter, with new country category business teams now in place in a bid to strengthen its innovation pipeline.

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