Unilever has reported slower growth in the third quarter and lower turnover as demand slipped for its products around the world, following last month’s warning of a slowdown in emerging markets.
Underlying sales growth for the quarter was 3.2%, compared to 4.9% and 5% for the previous two quarters. Although most growth still came from emerging markets, with sales up 5.9%, this was down significantly from the double-digit growth of recent quarters.
However, the company’s CEO Paul Polman said in a statement that Unilever’s growth was ahead of its markets for the first nine months. Meanwhile, turnover fell 6.5% in the quarter, to €12.5bn.
“Emerging markets continue to be the main driver of our growth and, despite the current slow-down, they remain a significant growth opportunity which the company is well-placed to capitalise on,” he said.
He added that there was no improvement in North America or Europe, and sales in developed markets fell 0.3% in the quarter.
Underlying sales in the food division were down 0.3% and the company said the division was held back by its spreads business. In response, the intention is to highlight the naturalness of its products, with a recent relaunch of Flora in the UK, emphasising “the goodness of sunflower”, while Rama with Butter has been launched in Germany.
Ice cream sales were boosted by good weather in northern Europe, but this was offset by lower sales in southern Europe, particularly in Italy, Unilever’s largest ice cream market.
“We will continue to accelerate our innovations, backed with competitive support, to build long term growth and value,” said Polman, adding that he expected to report an improvement in sales growth in the fourth quarter, driven by innovation projects.
“We remain focused on achieving another year of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow,” he said.
More than half (57%) of Unilever’s sales come from emerging markets, and its business in India, Bangladesh, Brazil and Russia has been particularly hard hit by weaker currencies.
The company’s share price was flat in early trading.