Scrummy sales for Unilever as emerging markets bounce

Investors breath a sigh of relief as emerging markets push profits up.

by Rachel Savage
Last Updated: 20 Jan 2015

Consumer goods giant Unilever reported a rise in full year profits, driven by a rebound in emerging markets, just a quarter after delivering its first profit warning since 2004.

The maker of everything from Ben & Jerry’s ice cream (nom) to Marmite and Vaseline said pre-tax profits climbed 9% to €7.1bn (£5.9bn) from 2012. That was despite turnover falling 3% to €49.8bn. Stripping out the effect of foreign exchange movements and divestments, underlying sales growth was 4.3%.

Unilever’s underlying sales in emerging markets, which account for almost 60% of sales, grew 8.4% in the fourth quarter, up from 5.9% in the previous three months. The third quarter lull was behind Unilever’s first profit warning in nine years in October.

Unilever’s developed markets business didn’t do particularly well, with underlying sales down 1.7% in the fourth quarter. Revenue fell 1.3% in Europe as growth slowed in northern Europe, but the UK was perkier, growing for the 25th successive quarter.

‘Another year of consistent underlying sales growth and margin expansion… has been achieved despite significant economic headwinds and highly competitive markets,’ CEO Paul Polman said.

The ex-trainee priest also warned of ‘ongoing volatility in the external environment’ (Code for: if anything goes wrong it’s not our fault – we did warn you).

‘Investors appear to be breathing a sigh of relief,’ said Keith Bowman, an analyst at stockbrokers Hargreaves Lansdown. And indeed they are – shares were up over 3.5% in mid-morning trading.

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