Published: Sun, February 03, 2019
Markets | By Otis Pena

Unilever Posts 3.1% Sales Growth In Full-Year 2018

Unilever Posts 3.1% Sales Growth In Full-Year 2018

"Market conditions have been challenging throughout the year, particularly in the second half where currency devaluations and rising commodity costs put pressure on consumer demand".

We anticipate underlying sales growth will be in the lower half of our multi-year 3-5% range, with continued improvement in underlying operating margin and another year of strong free cash flow.

Unilever's new chief executive officer, Alan Jope, told analysts in his first post-results call as CEO the results are "solid" but admitted increasing the speed of growth is crucial for the business. Organic sales growth of 2.9% last quarter missed consensus forecasts of 3.5% growth, supported by price hikes but with volumes decelerating.

"Let me state. upfront, that accelerating quality growth will be my number-one priority", Jope told analysts.

The Anglo-Dutch group, which is working to move on from last year's botched plan to shift its main headquarters to the Netherlands, saw its shares fall almost 3 percent on Thursday as the sales miss overshadowed full-year earnings that were ahead of expectations. The company, which previous year scrapped plans to abandon its London headquarters, further warned that market conditions were likely to remain challenging. Noting problems in Argentina and Brazil, he called Latin America the most troubled part of the world.

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Magnum ice cream maker Unilever is stockpiling products ahead of Britain's departure from the European Union in preparation for a no-deal Brexit. The target calls for an operating margin of 20 percent.

He said Unilever remained on track for its 2020 goals.

For the 2018 financial year, total turnover was €49.6bn, excluding the divested spreads business, down 2.3% on a year ago.

Underlying sales grew by 2.9% in 2018 from the year earlier and, excluding the spreads business, by 3.1%. The group blamed flat volume growth in developed markets. The stock is underperforming the broader United Kingdom market, with the benchmark FTSE 100 index now standing 0.52 percent higher at 6,977.51 points.

Its full-year earnings were 3.48 euros per share.

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