Unilever latest results lower than expected: company blames the weather

By Lucy Whitehouse

- Last updated on GMT

Related tags North america Developed country Americas Europe

Unilever latest results lower than expected: company blames the weather
Unilever has posted its third quarter results, showing turnover has fallen by 1.6%, hit by a 5.1% blow from foreign exchange rates.

The consumer goods company said its underlying sales rose only 2.6%.

As media company RTE notes​, that was below the 3.9% growth expected by analysts in a company-supplied consensus, and below the 3% seen in the first half of the year.

The disappointing growth seen in this quarter was adversely affected by poorer weather in Europe and natural disasters in the Americas, Unilever says.

It pointed with optimism, though, at the promising results coming from the emerging markets, where underlying sales growth was 6.3% in the third quarter, with volume up 1.8%.

Commenting on the results, CEO Paul Polman says: “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.

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.​”

Personal care focus

Despite improved volumes, price growth was moderated by easing commodity cost increases, leading to lower underlying sales growth in the third quarter, says the company of its personal care business.

  • Highlights picked out by the company for personal care:
    Growth in skin cleansing was supported by innovations such as Dove shower foam, a new format that delivers an improved sensorial experience, which is now available in North America, Europe and Japan.

  • Baby Dove has been introduced to 26 markets, while Hijab Fresh, a new brand, was launched in Indonesia to provide a solution to the specific needs of the Muslim consumer.

  • In hair care, growth was driven by Sunsilk, helped by the expansion into natural propositions that has driven increased penetration among millennials.

  • Sales in deodorants were flat in the quarter with growth in the Americas offset by declines in the challenging markets of Europe and South Africa.

  • The prestige business performed well, driven by Dermalogica and Kate Somerville. The subscriber base of Dollar Shave Club expanded further, enabling another quarter of double-digit growth.

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