Unilever CEO blames lacklustre results on U.S. fiscal fiasco
by Toby Sterling THE ASSOCIATED PRESS
The consumer goods giant's chief executive said uncertainty around the U.S. fiscal position hampered performance in emerging markets, where it counts more than half of its sales.
AMSTERDAM, Netherlands—Unilever, the maker of consumer products from Ben & Jerry’s ice cream to Dove soaps, said Thursday its third quarter revenues suffered from slowing growth in developing countries, where it has more than half of its sales.
Consumers in emerging markets lost purchasing power as their currencies weakened in recent months. That was caused mainly by concerns the U.S. would tighten its ultra-loose monetary policy, which had been fueling investment in emerging markets.
“I think it’s disappointing how the U.S. is working right now on a macroeconomic level and frankly it’s depressing some of these markets,” said Chief Executive Paul Polman on a conference call with analysts.
He noted that, in the meantime, the U.S. and European economies were not improving.
In a trading update, Unilever said its “underlying” sales—a measure that strips out the effects of acquisitions and currency effects —grew by 3.2 per cent thanks to price hikes and higher volumes, with growth still centred in Latin America and Asia. “Despite the current slow-down, they remain a significant growth opportunity,” Polman said of developing markets.
Unilever’s reported revenues fell 6.5 per cent to 12.5 billion euros ($17.2 billion) due to the strong euro.
It was the slowest quarterly growth for Unilever in several years.
The consumer goods giant said personal care products such as Dove soaps and Vaseline moisturizers performed most strongly. Its foods and refreshments arms, which makes Knorr sauces and Lipton teas, among others, saw a divergence in Europe.
Northern Europe performed fairly well, “offset by declines in southern Europe, where the continuing impact of difficult economies (was) combined with a poor ice cream season,” the company said.
