19th Jul 2018 08:31
LONDON (Alliance News) - Dove soap maker Unilever PLC on Thursday said a truckers strike in Brazil, weakening of economic conditions in Argentina, and adverse currency movements resulted in a year-on-year drop in sales and profit for the first half of 2018.
The Anglo-Dutch consumer goods giant also said it will hold general meetings for Unilever NV and for Unilever PLC shareholders on October 25 and 25, respectively, to vote on the company's previously announced business simplification plan, which includes abandoning its current dual-headed corporate structure and rebasing the company in the Netherlands.
For the six months to June-end, the company recorded pretax profit of EUR4.34 billion, down 6.3% from EUR4.63 billion in the year-ago period. Revenue fell 5.0% to EUR26.35 billion from EUR27.73 billion.
The company said adverse currency movement dented revenue growth by 8.9%, hurting profit for the interim period.
The truckers' strike in Brazil - one of the biggest markets for the company - hurt adjusted sales growth by around 60 basis points. Underlying sales growth refers to the increase in revenue for the period, excluding change in revenue resulting from acquisitions, disposals and changes in currency.
Total first-half adjusted sales growth, excluding the spreads business, stood at 2.7%. The 2.7% increase in adjusted sales was attributed to 2.5% growth in volumes. Prices in the period rose marginally by 0.2%.
"Our first half results show solid volume-driven growth across all three divisions, which was achieved despite the effects of an extended truckers' strike in Brazil, one of our biggest markets. Growth was driven by strong innovation and continued expansion in future growth markets. The margin improvement was of high quality and in line with our strategy, driven by further gross margin progression, increased investment behind our brands and strong savings delivery," said Chief Executive Paul Polman.
First half adjusted operating margin improved by 80 basis points to 18.6% due to further reduction in the underlying cost base and overheads. Unadjusted operating margin was down 50 basis points to 17.0%, mainly due absence of an exceptional disposal gain recorded in the prior year period.
"Our expectation for the full year is unchanged. We expect underlying sales growth in the 3% - 5% range, an improvement in underlying operating margin and strong cash flow. We remain on track for our 2020 goals," Polman added.
London-listed shares in Unilever were down 0.4% at 4,187.50 pence each on Thursday morning.
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