The Dutch-British FMCG giant Unilever has issued a sales warning due to difficult market conditions in South Asia and West Africa, which are set to continue.
Less than 3 % growth
Until now, the producer of brands like Axe, Lipton and Magnum had expected its turnover growth to be between 3 and 5 %, but the company is now scaling back expectations and anticipates an outcome of somewhat lower than this range. Unilever reassures however that profits, margins and cash flow are unlikely to be effected.
Unilever pointed to difficult market conditions as an explanation for the poorer performance: "This is a result of challenges in the quarter in some markets, including the economic slowdown in South Asia, one of Unilever's largest markets, and trading conditions in West Africa remaining difficult", the company stated in a trading update. Unilever does see signs of an improvement in North America, but a full recovery will take time.
The company is anticipating turnover growth to increase, but in the first six months of the new year that growth will not exceed 3 %. Across the whole of 2020 Unilever is expecting a rise in turnover of between 3 and 4 %. "Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance", CEO Alan Jope said in the statement.