Unilever profits up but more to be done in emerging markets

Anglo-Dutch consumer goods giant Unilever posted healthy profit margins for 2013, but a slowdown in emerging markets posted weaker growth and has not gone unnoticed.

Turnover was down 3% to €49.8 billion in 2013 after a slowdown in some emerging markets hit sales and weighed down by foreign exchange rates and divestments.

Company CEO Paul Polman says that developed markets remained weak with little sign of any overall improvement despite some macro-economic indicators looking up in recent months.

Upbeat

The Dove maker’s boss remains upbeat though and says that 2013 provided further evidence of the progress the company was making in transforming Unilever into a sustainable growth company.

“Looking forward, we anticipate on-going volatility in the external environment and are positioning Unilever accordingly,” he says.

“Although the investments we have made over the last five years ensure that we are well placed, we are determined to make Unilever even more agile and to fund further growth opportunities by driving out complexity and cost.”

Q4 profit

Sales growth in the fourth quarter was helped by Russia, Turkey, China and Indonesia, but consumers in Vietnam, Thailand and South Africa continued to spend less on its products.

Unilever’s fourth-quarter profit was up at €4.84 billion, from €4.37 billion in the comparable period a year earlier.

The New York Times quoted Polman as saying, looking forward, the company anticipated volatility in the external environment and was positioning Unilever accordingly.

Segment breakdown

As for the business segment, hair care growth in the fourth quarter was underpinned by strong performances from Dove, TRESemmé, Sunsilk and Clear, whilst Dove once again shone in skin care.

Deodorants grew ahead of its markets supported by the success of the men’s and womens’s Rexona brands, and compressed deodorants drove growth ahead of the market whilst delivering significant environmental benefits.

UK – EU debate

Polman was also reported in UK daily The Guardian as saying Unilever could review its investment in the UK if the country left the EU; which could happen as the UK's ruling Conservative party has promised to hold a referendum if re-elected next year, on the country's EU membership.

"We are very concerned about the overall competitiveness of Europe vis-a-vis the rest of the world," he says Paul Polman in a media statement.