Unilever’s turnover slumped in the first quarter of 2019 compared to the year before, it revealed today.
Turnover fell 1.6 per cent to €12.4bn between January and March compared to the same period in 2018.
The maker of Marmite and Dove soap blamed the disposal of its spreads business last July.
However, underlying sales growth excluding the disposal stood at 3.1 per cent year on year, sending shares 3.29 per cent up to 4,522p.
Sales of home care products grew six per cent over the quarter, with fabric products and home and hygiene range having a particularly strong start.
But in foods and refreshment, underlying sales rose just 1.5 per cent as salad dressings suffered from the later timing of Easter this year and “high promotional intensity”.
Underlying sales in emerging markets climbed five per cent.
Chief executive Alan Jope said: “We have delivered a solid start that keeps us on track for our full year expectations. Growth was led by emerging markets and was balanced between volume and price.
“Accelerating growth is our number one priority. It requires both great execution and a continued strategic shift into faster growth segments and channels.
“We saw good performance in key growth channels including out of home and e-commerce and benefited from stronger global innovations and faster and more relevant local innovation.”
Unilever is now tracking to see underlying sales growth towards the lower end of its three per cent to five per cent forecast range.
However, Jope – who took over from long-serving Paul Polman towards the end of last year – said the business remains on track to hit its 2020 target with an improved operating margin and healthy cash flow.
Jope warned in January that market conditions would remain “challenging” in 2019.
Today he said: “The acquisitions we have made since 2015 collectively grew double-digit in the first quarter. With the leadership changes announced in March, we are building the right team to drive our growth agenda.”
Laith Khalaf, senior analyst at Hargreaves Lansdown, credited emerging markets with boosting Unilever’s revenue.
“Unilever’s global footprint helps the consumer goods giant to capitalise on growth opportunities, wherever they may be in the world, while at the same time helping to paper over the cracks in regions which might not be doing so well,” he said.
“On a typical day 2.5bn people use a Unilever product, and that enormous scale, combined with the strength of its brands, has made Unilever a stock market darling.
“The trick now for Unilever is to push its profit margins up to 20% per cent, and it looks like it’s going to have to do that while it’s at the lower end of its 3-5 per cent sales growth target.”