17th Dec 2019 08:14
(Alliance News) - Consumer goods firm Unilever PLC on Tuesday said it is now expecting 2019 underlying sales growth to fall short of guidance due to economic slowdown in south Asia and tough trading conditions in West Africa.
Shares in the Hellmann's mayonnaise maker were down 5.4% at 4,381.50 pence in London in early morning trade, the worst performer in the FTSE 100 index.
The Anglo-Dutch company had been guiding for underlying sales growth in the lower half of its 3% to 5% multi-year range. However, it now expects underlying sales "slightly below" this guidance.
The reason given for this change in expectations is "challenges in the quarter in some markets", including continued trouble in west African markets and a slowdown in south Asia, one of Unilever's biggest markets.
Further, among developed markets, the consumer goods major said the trading environment is also "challenging". While north America is showing early signed of improvement, Unilever said a full recovery in the region will take time.
Weaker underlying sales growth is not expected to hurt Unilever's earnings, margin, or cash.
Chief Executive Alan Jope said: "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%. Our full year underlying sales growth is expected to be in the lower half of the multi-year range.
"Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance."
By Anna Farley; [email protected]
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