Unilever has cut its forecast for the year’s underlying sales growth, citing a slowdown in south-east Asia and “difficult” trading conditions in west Africa.
The Anglo-Dutch consumer goods giant said in a trading update today (17 December) it expects sales to be “slightly below” the previous guidance of the lower half of a 3-5% range. Earnings, margins and cash are not impacted by the downgrade. Unilever is due to release final results for 2019 on 30 January.
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“Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance,” chief executive Alan Jope said in a filing with the London Stock Exchange.
While Unilever noted difficulties during the current quarter in south-east Asia, one of its biggest markets, it also cited challenges in developed countries where it said North America is showing signs of a pick-up for the company, although “a full recovery there will take time”. Earlier this month, Fabian Garcia was announced as the new president for the region starting in the New Year.
Jope continued: “Due to challenges in certain markets, we expect a slight miss to our full-year underlying sales-growth delivery. Looking ahead to 2020, growth will be second-half weighted. While we expect improvement in H1 2020 versus this quarter, we expect that first-half growth will be below 3%.”
In a further sign of the challenges facing Unilever in emerging markets, it recently announced potential job cuts in the Caribbean as a result of restructuring in Trinidad and Tobago following “exhaustive analyses of the current operations to ensuring the economic viability of the organisation”.
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