Slowdown in emerging
countries
The owners of brands like Axe, Bertolli, Dove and Lipton expect the underlying sales growth in the third
quarter to be a mere 3 to 3.5 %. The first six months saw an underlying sales growth of 5 % and analysts
expected Unilever to maintain that number in the third quarter.
Unilever puts most of the blame for the failed target on the emerging
countries, as they are experiencing a slower growth. The situation is worsened by the weakened local currencies
compared to the euro. The developed Western markets will manage to hold onto a “flat
or slightly lower turnover”.
Lowest exchange rate in 11
months
The profit warning is not a complete surprise, because Unilever had already
mentioned in the second quarter that the market situation had worsened. However,
investors were not pleased: the Unilever
share dropped 3 % in Amsterdam, its lowest point in 11 months. London followed suit, dropping 3.6 %.
Unilever’s management points out that it is still on track to reach its previously mentioned goals for 2013: a volume growth and a durable improvement of the operational margins
in its core activities. Paul Polman, CEO, expects an “underlying sales growth
in the fourth quarter”.
