Unilever sales disappoint after China slowdown
CONSUMER goods giant Unilever reported lower-than-expected fourth quarter sales yesterday as it continued to grapple with a slowdown in demand for its products in emerging markets, particularly in China.
The owner of Lipton tea and Dove soap said like-for-like sales rose by 2.1 per cent in the fourth quarter, in line with the third quarter, which was the slowest quarterly growth since 2009.
Total sales for the year to 31 December, including the impact of currency movements, declined by 2.7 per cent to €48.4bn (£36.9bn).
Unilever makes more than half of its sales in emerging markets and so is particularly exposed to slowing demand countries such as India, as well as the sharp economic deterioration in Russia.
Its Chinese business was particularly hit, with quarterly sales down 20 per cent, after a sharp slowdown in the market left retailers with too much stock on their shelves.
Despite disappointing sales growth, pre-tax profits rose seven per cent at reported currency rates to €7.6bn.
Chief executive Paul Polman said the company does not plan on a significant improvement in market conditions in 2015. “Against this background, we expect our full year performance to be similar to 2014 with the first quarter being softer but growth improving during the year.” Unilever cut 1,400 jobs last year in a bid to cut costs and simplify the business. It has also sold several brands including its Slim-Fast brand and Ragu and Bertolli pasta sauces.
Shares edged down 0.59 per cent to close at 2,713p last night.