Unilever turnover drops because of exchange rates | RetailDetail

Unilever turnover drops because of exchange rates

Unilever turnover drops because of exchange rates

British Unilever’s 2013 turnover dropped 3 % to 49.797 billion euro, but the decrease was mainly because of exchange rate fluctuations: at stable rates, there would have had a 3.2 % increase.

Food branches under pressure

Despite the difficult economic circumstances, the underlying sales still pushed forward with a 4.3 % increase. The company not only managed a 3.2 % turnover increase (with stable exchange rates), but it also factors in a 1.1 % increase as Unilever brushed aside products with low margins.

 

Personal care (with products like Dove, Lux, Rexona and Axe) had an underlying 7.3 % turnover growth, while home sanitation products (Omo, Sunlight, Cif, ...) chalked down an 8 % increase. Food (Bertolli, Knorr, ...) and drinks (Lipton, ...) were under pressure, with mere 0.3 and 1.1 % increases.

 

Drop in Europe

The underlying European turnover dropped 1.1 %, but elsewhere Unilever saw positive evolutions: turnover in the Americas grew 4.6 %, while Asia and the emerging countries even managed a 7.8 % increase. The latter is becoming increasingly important and already represents a 20.1 billion euro turnover, on a total of some 50 billion euro.

 

CEO Paul Polman recognized that the growth in the emerging countries has been lower than in the past, but stated that the relative weakness of the local currencies is partly to blame, as that resulted in inflation. He has said the inflation increases have not been put into increased prices for the consumer.

 

Profit increases nevertheless

Despite the pressure, Unilever has managed to boost its full year profit another 9 % to 5.263 billion euro and its gross margin rose by 110 base points to 41.2 %, because the company decided to halt a product range with lower margins. It has also launched a line of innovative products with higher margins and has managed to lower costs.

 

Advertising and promotional costs did rise 460 million euro however, as Unilever extended investments because of increased competition for the consumer. Polman believes that the volatile nature of the market will remain visible in the next few months and Unilever will be positioned in such a way to handle that.

 

 

 

(Translated by Gary Peeters)

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