Unilever surprises with a stronger end to year

Kasmira Jefford
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CONSUMER goods giant Unilever reported a better-than-expected finish to its financial year thanks to a rebound in sales in some emerging markets, sending shares higher yesterday.

The company behind Lipton Tea and Dove soap surprised the market in October after issuing its first profit warning in almost a decade.

It blamed an accelerated slowdown in developing markets and a further weakening of currencies such as the Indian rupee against the dollar.

The Anglo-Dutch firm said yesterday that emerging markets, which account for 60 per cent of sales, grew by 8.4 per cent in the fourth quarter, up from a 5.9 per cent rise in the previous quarter.

But while countries including Russia, Turkey and China saw a “step up” in growth, Vietnam, Thailand and South Africa remained weak.

Sales in Unilever’s mature markets saw a decline of 1.7 per cent despite personal care products such as Dove, Tresemme and Sunsilk recording positive growth.

Southern Europe had stabilised but this was offset by slowing growth in northern Europe. The UK was the top performer, delivering the twenty fifth successive quarter of growth.

The group said total sales for the full-year were down three per cent to €49.8bn (£40.9bn) in the year, hit by foreign exchange costs and acquisitions and disposals.

Currency headwinds also dented free cash flow in the year, which was down from 2012 at €3.9bn.

Chief executive Paul Polman said the Persil and Marmite maker had managed to achieve sustainable growth, notwithstanding “significant economic headwinds and highly competitive markets”.

“Looking forward, we anticipate ongoing volatility in the external environment and are positioning Unilever accordingly,” he warned.

Hargreaves Lansdown analyst Keith Bowman said investors “appeared to be breathing a sigh of relief” after shares, which had fallen 11.5 per cent over the last six months, closed up 1.76 per cent last night.

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