Unilever sales fall on weak EM currencies

Emerging markets demand continued at a brisk pace for Unilever but the weakness of their currencies against the euro led to a fall in quarterly sales at the Anglo-Dutch consumer group.

The owner of brands such as Magnum ice cream, Dove soap and Persil laundry detergent said on Thursday that reported sales fell 2 per cent to €12.5bn in the three months to the end of March compared with the same quarter last year.
Unfavourable currency movements hit sales by 7.1 per cent. Underlying sales — excluding currencies and mergers and acquisitions — rose 4.7 per cent, in line with market expectations and driven by a 2.6 per cent increase in volumes.

Unilever repeated its January warning that markets were volatile. It added on Thursday that consumer demand was “fragile”.

Paul Polman, chief executive, said: “We are maintaining momentum despite a tougher external environment.”

The sharp division between emerging and developed markets was underscored by underlying sales growing by a healthy 8.3 per cent in the former but dropping by 0.3 per cent in the latter.

Europe, beset by deflation, was the weakest area, with a 0.6 per cent drop in underlying sales. Within emerging markets, Latin America sales grew 18 per cent, mainly through higher prices. Growth was strong in the Philippines and also in China where it was driven entirely by online sales.

Home and personal care sales grew faster than the food categories, underscoring the group’s strategy to veer away from slow-growth food into personal care.

Omo and Comfort laundry products grew strongly in emerging markets, while in personal care dry spray deodorants did well in north America.

The foods category was once again held back by margarine. Sales of spreads continued to fall, despite the creation of a standalone business aimed at improving its performance.

Analysts at Canaccord Genuity said the sales figures showed “good momentum [was] maintained”.