Unilever sales miss estimates

Unilever, the world's second biggest consumer goods maker, reported quarterly sales that missed estimates and said growth was slowing in emerging markets while conditions remained difficult in the US and Europe.

So-called underlying revenue rose 5 per cent in the second quarter, the Anglo-Dutch maker of Lipton tea said yesterday in a statement. That fell short of the average estimate of 14 analysts polled by Bloomberg for a 5.3 per cent increase.

Sales in developing markets rose 10.3 per cent in the second quarter, the company said, little changed from the pace of the first three months.

Chief executive Paul Polman said on a conference call that it was not “realistic” for growth to remain at those levels after nine straight quarters of double- digit gains given the tougher economic conditions.

“Slowing does not mean crashing,” Andrew Wood, an analyst at Sanford C Bernstein, said in a note yesterday.

“Despite slowing emerging markets, Unilever still delivered double-digit growth, which was basically in line with the first quarter.”

The company said yesterday: “Growth is slowing in emerging markets as macroeconomic headwinds influence consumer behaviour.

“Within this overall trend we see a mixed picture across the major countries.”

Slackening economic growth in nations such as India and China is a concern to Unilever, which gets about 57 per cent of sales from developing regions.

The MSCI Emerging Markets Index, a barometer of developing economies, has fallen 6.2 per cent over the past three months.

While Unilever’s sales growth was strong in Latin America, Africa and southeast Asia, south Asia was “a little less so”, chief financial officer Jean-Marc Huet said by phone.

In India, Unilever saw “an overall slowdown of the market, as well as the consumer”, said Mr Huet. – Bloomberg