30th Jan 2020 08:45
(Alliance News) - Consumer goods firm Unilver PLC on Thursday reported sales growth across the board but its profit fell by a third following a sharp reduction of gains made from a joint-venture disposal.
In the year ended December 31, revenue was 2.0% higher at EUR51.98 billion from EUR50.98 billion, though pretax profit was 33% lower year-on-year at EUR8.29 billion from EUR12.36 billion.
In 2018, the company registered a EUR32 million gain on disposal from a spreads business joint-venture in Portugal. This time around however, it booked just a EUR3 million gain from that.
Unilever, which owns names such as Dove soap and Ben & Jerry's ice cream, said underlying sales climbed 2.9% year-on-year in 2019, though growth was below its guided range following a fourth quarter "slowdown".
In its 2018 results, the company said it expected underlying sales growth between 3% and 5% for 2019.
Underlying sales grew 1.5% in the fourth quarter of 2019.
"There has been a significant slowdown during 2019 in South Asia, and we have seen some market softening in China. While parts of Latin America have been volatile, we have seen signs of improvement in Brazil. South East Asian markets maintained good growth while developed markets, in particular Europe, remained challenging," the company said.
The company declared a fourth quarter dividend of EUR0.4104 per share, up 6.0% year-on-year from EUR0.3872 per share.
Segmentally, there was growth across the board for 2019 as a whole. Beauty & Personal Care's underlying sales grew 2.6%, helped by double-digit growth from Dove, Unilever explained.
Home Care, which includes surface cleaning product Cif, delivered underlying sales growth of 6.1%. In Foods & Refreshment, the underlying sales climb was less strong at 1.5%.
Unilever explained: "Ice cream grew, however volumes declined due to a strong comparator from a particularly good European summer in the prior year. Tea saw price-led growth, however volumes declined due to subdued consumer demand for black tea in developed markets."
The ice cream business was boosted by new Ben & Jerry's products and Magnum's vegan range. The company has "initiated a strategic review" of its tea business.
Looking ahead, Unilever said: "In 2020, our underlying sales growth is expected to be in the lower half of the multi-year 3% to 5% range and will be second-half weighted. While we expect an improvement from the fourth quarter of 2019 into the first half of 2020, first half underlying sales growth will be below 3%."
The company also said the impact from the coronavirus outbreak is unknown. The contagion has claimed more than 150 lives in mainland China.
"As we near the completion of our three-year strategic plan, we expect continued improvement in underlying operating margin and another year of strong free cash flow, remaining on track for our 2020 goals," Chief Executive Alan Jope said.
Unilever shares were 1.7% higher at 4,514.50 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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