FMCG manufacturer Unilever hasn't managed to achieve its expectations for the past quarter: due to the incessant rain in Europe, turnover increased by 3.3% while analysts had predicted 3.7% growth.
Developing nations keep growing
In the past second quarter, underlying turnover at Unilever ended 3.3% higher. That result is slightly below the 3.7% growth of analysts' expectations for the producer of Dove and Knorr, among others. Total turnover even decreased by 1% down to 26.1 billion euros, but Unilever claims that was because of the sale of its margarine department last year.
The company still stresses that it managed to grow on its own strengths (without acquisitions) in the first half of the year, solely through price and volume increases. Developing nations are the strongest contributors to this growth. Unilever says their volume share keeps growing in Indonesia, the Philippines, India and China. These up-and-coming markets already represent 60% of all turnover and managed to grow by another 7.4% in the past quarter.
Fewer ice creams in the spring
However, in the mature markets, turnover decreased by 1.6%. The rainy spring may have played its part, according to the brand manufacturer. 13% of Unilever's turnover usually comes from ice cream, with such brands as Magnum, Ola and Ben & Jerry's in their porfolio. As a result, the reduced sunshine and increased rainfaill in April and May throughout Europe had a negative impact, especially after the past two hot and sunny summers. The current summer, which is once again a scorcher, may still change that.
Unilever maintains its expectations for the full financial year: the manufacturer predicts underlying turnover growth of 3 to 4%. In 2020, the group wants to achieve an operational margin of 20%. In the past quarter, the company generated an underlying operational profit of more than 5 billion euros.