Unilever misses 2019 sales target, cites tough conditions in West Africa and slowdown in south Asia
Unilever Plc has announced it will miss its 2019 expected sales target as the company’s shares were sent into their steepest fall in six months.
According to Alan Jope, Unilever CEO, “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,” added Jope, who took on the top job earlier this year.
Shares in Unilever were down 1% as at early Tuesday, while rival Nestle slipped 1.2%.
Unilever’s forecast suggests it suffered its lowest fourth-quarter sales growth in more than a decade.
Jope specifically noted that growth in South Asia – India, Bangladesh, Pakistan, Sri Lanka and Nepal – slowed to 5% this year, marking a “significant deceleration” from last year’s 10% rise. He also cited tough trading conditions in West Africa as a factor.
“Much of this was caused by a sharp slowdown in consumption in rural India, where growth for the first time is underperforming urban markets”, Jope said.
India is Unilever’s second-biggest market after the United States, contributing nearly 10% of its group revenue.
“When India takes a slowdown, we definitely feel it …but this is more turbulent than normal,” Jope said, adding that he expects the market to recover in the second half of 2020.
The statement also revealed that developed economies have been a drag for Unilever for several quarters, where growing numbers of consumers are turning to fresher foods, niche brands or cutting back on spending.
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