Small Unilever turnover drop as "everything goes against us"

Small Unilever turnover drop as "everything goes against us"

Unilever has struggled in its third quarter: European deflation, negative exchange rate effects, dwindling Chinese demand and weaker growth in emerging markets have pushed its quarterly turnover down 2 %.

Smallest growth in past 5 years

The British-Dutch manufacturer of food and beauty brands (like Knorr, Lipton, Axe and Dove) experienced a 2 % turnover drop to 12.2 billion euro in its previous quarter. Excluding negative exchange rate effects the company had a 2.1 % underlying growth, the smallest growth in the past 5 years. More so, the majority of that underlying growth was only achieved through price hikes.

 

Food sales dropped nearly 1 %, mainly because of a weak margarine market, while the disappointing European summer did not help ice cream sales (- 1.1 %). Soap, shampoo and deodorant sales went up (+ 1.1 %), but its growth increase is clearly fading as Chinese demand has also dropped. Its Home Care branch, Unilever's smallest division, grew 2.1 %.

 

The European market remains its weakest, falling 4.3 %, while the other markets managed growth. Asia went up 3.1 %, while the Americas even grew 6.8 %.

 

"Everything is going against us"

Financial manager Jean-Marc Huët explained to press agency AFN that everything is currently going against Unilever. "The results do not meet our expectations and sales have slowed down more than we had forecast at the start of the year. It has not only slowed down in China and South East Asia, but the unrest in the Middle East and Russia have also hampered us."

 

Deflation in Great Britain and France is part of the European problem, according to Huët. "We see clear opportunities to create structural growth in the long term, but we are currently in a perfect storm", he said.

 

CEO Paul Polman emphasizes that Unilever's underlying 3.2 % growth over the past 9 months is better than what its competitors have achieved. The company has therefore stuck by its forecast of being able to achieve profitable growth in 2014, despite "difficult marketing conditions for the remainder of the year, to say the least", Polman said.

Questions or comments? Please feel free to contact the editors


Arket Brussels opens: discover H&M's latest concept

14/09/2017

On Friday 15 September, H&M Group’s new store formula opens its doors on the Guldenvlieslaan in Brussels. The press got a sneak preview and discovered a surprising mixture of fashion, interior design and food. 

Nordstrom opens store without storage

13/09/2017

American fashion chain Nordstrom is to trial a new store formula in Los Angeles next month, in which customers will only be able to get advice and try out clothing. Purchases can be picked up at the store at a later date.

Primark benefits from weaker British economy

12/09/2017

Irish fashion chain Primark takes full advantage of the weak British economy, which prompted its parent company AB Foods to adjust its full-year forecast. The chain will also continue its expansion plans.

Participatiemaatschappij Vlaanderen invests in FNG

11/09/2017

Government investment fund Participatiemaatschappij Vlaanderen (PMV) will invest 15 million euro in fashion group FNG in return for 5 % of its shares. The money will go towards international expansion.

Gap Inc will focus on Old Navy and Athleta

08/09/2017

American fashion company Gap will alter its internal strategy and turn its attention to Old Navy and Athleta. Gap and Banana Republic, which both received the most attention up until now, will have to step aside.

Global Fashion Group cuts losses

08/09/2017

Global Fashion Group, the fashion group founded by investment group Kinnevik and Rocket Internet, managed to lower its losses even more in the second quarter. On top of that, turnover grew more than 25 %.

Back to top