31st Jan 2019 10:01
LONDON (Alliance News) - Consumer goods firm Unilever PLC on Thursday reported a performance in line with market expectations in 2018 but said it faces a difficult 2019.
Shares in Unilever were down 3.0% at 3,943.56 pence on Thursday morning.
The company's annual revenue declined as expected, falling 5.1% to EUR50.98 billion in 2018 from EUR53.72 billion the year before. This was in line with the analyst consensus published on Unilever's website prior to Thursday, which forecast a 5% revenue decline to EUR51 billion.
The revenue decline was the result of a 6.7% hit from currency and the EUR6.83 billion sale of the company's spreads business, including Flora and I Can't Believe It's Not Butter, to KKR & Co LP in July.
Unilever was slightly ahead of consensus in term of underlying operating profit, hitting EUR9.36 billion compared to a EUR9.32 billion forecast.
This represented a very marginal drop from the company's EUR9.40 billion underlying operating profit in 2017. Unilever's underlying figures use constant exchange rates.
The consumer goods company, which owns brands such as Dove soap and Lynx deodorant, reported a pretax profit of EUR12.38 billion, up 53% from EUR8.15 billion in 2017.
This was attributed both to improved margins, with its underlying operating margin widening to 24.6% from 16.5%. It was also a "stand out year" for ice cream in Europe, due to a hot summer, a boost to Unilever which owns the Ben & Jerry's, Magnum, Carte D'or, and Solero brands.
Growth in German ice cream sales helped to offer a decline in savoury and dressings sales. Ice cream was also the only category of Unilever product sales that did not decline in France.
Its region encompassing Asia, Africa, the Middle East, Turkey, Russia, Ukraine, and Belarus saw 6.2% growth in underlying sales while the Americas and Europe performed less favourably, with underlying growth of 0.9% and 0.7% respectively. Argentina performed particularly poorly, with a 10% decline in volume.
By division, underlying Beauty & Personal Care sales were up by 3.1%, Foods & Refreshment sales by 2.3% excluding spreads, and Home Care by 4.2%.
Looking ahead to 2019, Unilever Chief Executive Alan Jope is expecting that market conditions will "remain challenging".
"We anticipate underlying sales growth will be in the lower half of our multi-year 3% to 5% range, with continued improvement in underlying operating margin and another year of strong free cash flow. We remain on track for our 2020 goals," Jope said.
Unilever declared a final dividend of EUR0.3872, up 8.0% from EUR0.3585 a year before.
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