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Unilever misses estimates as sales slow in China, India

Published: October 17, 2019 13:20:03 | Updated: October 19, 2019 13:57:41


The logo of the Unilever group is seen at the Miko factory in Saint-Dizier, France, May 4, 2016. REUTERS/Philippe Wojazer/File Photo

Consumer goods giant Unilever reported weaker than expected third-quarter sales, citing softer demand in India and a slowdown in China, two of its biggest emerging markets.

Emerging markets, which account for 60 per cent of Unilever’s business, have been a key area of focus for Chief Executive Alan Jope since he took the reins in January.

Jope has been focusing investment in countries such as Vietnam and Bangladesh, where growing populations and an emerging middle class are driving demand for household products.

Shares in the maker of Knorr soups, Dove soap and Ben & Jerry's ice cream have risen more than 11 per cent this year, nearly double the rise in the broader FTSE 100 .FTSE index, buoyed by a weaker pound and strong performance in markets such as Indonesia and the Philippines.

Yet two of its biggest emerging markets show signs of slowing growth, with the impact of trade wars hitting domestic consumption in China and irregular monsoons curbing rural spending in India, Reuters reported.

“South East Asian markets continued to grow well, while growth in India softened further and China slowed a little,” the company said on Thursday.

Unilever reported underlying sales growth of 2.9 per cent in the quarter, missing an average forecast of 3 per cent, according to a company supplied consensus.

Turnover was 13.3 billion euros ($14.7 billion), above the 13.24 billion euros analysts had expected.

However, the company stuck to its full-year target for underlying sales growth in the lower half of a 3 per cent to 5 per cent range and to achieve a 20 per cent operating margin in 2020.

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