Unilever falls short of expectations

Unilever delivered solid results in its third quarter, although the FMCG manufacturer fell slightly below analysts’ expectations. Emerging markets remain the growth driver par excellence, despite the fact that the Sino-American trade war caused a slowdown in Asia.

Barely 0.1 %

Unilever saw its quarterly turnover grow organically by 2.9 % to 13.3 billion euros: the manufacturer of Dove and Ben & Jerry’s outperformed analysts’ expectations by just 0.1 %, achieving a 3.0 % organic growth. All divisions made progress, but in particular, the home care division sprung ahead with a 5.4 % growth.

In Europe, the group’s revenue fell by 0.3 % as the volume of sales increased, but products were sold at lower prices. Last year’s very hot summer also resulted in an enormous boost for ice cream sales, a windfall that did not happen again this year. Overall, sales in developed markets fell by 0.1 % to 5.5 billion euros.

Trade War

Emerging markets continued to deliver growth, even though they have experienced a slowdown compared to the previous quarter. Indeed, the trade war slowed down domestic consumption in China. Emerging markets as a whole grew by an average of 5.1 %: a good result, but still a slowdown as in the second quarter it was still more than 7 %.

Unilever is maintaining its full year expectations, with the FMCG producer forecasting underlying sales growth of 3-4 %. By 2020, the group aims to achieve an operating margin of 20 %.