Unilever’s third-quarter sales have come in below expectations after growth in emerging markets was offset by continued weakness in Europe and North America.
Over three months to the end of September, the consumer goods giant’s turnover rose 5.8% to €13.3bn, although underlying sales growth slowed to 2.9% from 3.5% the previous quarter. Volumes increased by 1.4% and prices by 1.5%.
Unilever highlighted that its Emerging Markets unit performed particularly well, with underlying sales growth of 5.1% to €7.8bn, driven by South East Asia markets. However, it did say that growth in India had softened further and China slowed a little.
By contrast, underlying sales in its Developed Markets unit fell 0.1% to €5.5bn. Sales in North America edged up 0.3%, helped by price growth. However, sales in Europe fell 0.3% with volumes up 0.5% and price down 0.9% in a “retail environment that remains difficult”.
Unilever’s Home Care division was its star performer with underlying sales up 5.4%, driven by its hand dishwash products and surface cleaning brand Cif.
Beauty & Personal Care sales grew 2.8%, led by deodorants and skin care products. Meanwhile, its Foods & Refreshment division saw sales increase 1.7%, although volumes declined 0.2% due to weaker sales of ice cream against a strong comparative with the previous year when demand was boosted by good summer weather in Europe.
In nine months so far this year, Unilever’s underlying sales growth figure is 3.4%, with volume growth at 1.3% and price growth at 2.1%.
Despite the slower growth in the last quarter, the company stuck to its full-year target for an underlying sales rise in the lower half of a 3% to 5% range and to achieve a 20% operating margin in 2020.
Chief Executive Alan Jope commented: “We have maintained momentum in the quarter, with a good balance between volume and price. Emerging markets and Home Care have been the key growth drivers. We will step-up competitive top line performance through innovation and portfolio evolution to serve the faster growing geographies and channels.”
He added: “We are committed to delivering superior long-term financial performance and balanced, compound growth of the top and bottom line through our sustainable business model. We are taking action to remain relevant to the consumer of the future, such as setting stretching goals on plastic use which we recently announced.”
