Unilever dogged by currency headwinds and competitive markets

"Good progress in tough markets" is the phrase Unilever has chosen to describe its performance in 2013.

The Anglo-Dutch products giant said its determined to improve by “driving out complexity and cost”.

In its full year results for 2013, Unilever reported underlying sales growth of 4.3 per cent (4.1 per cent in the fourth quarter) - slightly ahead of analysts’ forecasts - with profit before tax up nine per cent to €7.1bn in the year.

But the year was by no means an easy one. From the statement:

Growth continued to slow in emerging markets as a result of the impact of economic uncertainty and currency depreciation on consumer demand. Developed markets remained weak with little sign of any overall improvement despite the more positive macro-economic indicators in recent months.

In the fourth quarter 2013, developed markets saw a decline of 1.7 per cent.

And revenues were down three per cent to €49.8bn 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.

When it came to emerging markets, sales growth was up 8.7 per cent in the year, and 8.4 per cent in the fourth quarter from 5.9 per cent in the third.

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

Cooling demand in emerging markets saw Unilever deliver its first profit warning in ten years in September, shocking markets.

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

He added: "Looking forward, we anticipate ongoing volatility in the external environment and are positioning Unilever accordingly."