Unilever struggles with difficult business in Latin America

01-Feb-2019 - United Kingdom

Negative currency effects caused a drop in sales last year at the consumer goods manufacturer Unilever. The revenues of the manufacturer of brands such as Magnum, Knorr, Lipton and Dove fell by 5 percent compared to the previous year to 51 billion euros, as the Dutch-British company announced on Thursday. However, the reason for the decline was also the sale of the bread spread business to the financial investor KKR.

After an equally weak final quarter, the new Group CEO Alan Jope is now entering the new year with caution. Market conditions remained challenging in 2019, said the manager, who has headed the Group since the beginning of the year. In particular, business in Latin America should remain difficult, he said.

Unilever now expects organic growth for the current year to be at the lower end of its multi-year target range of 3 to 5 percent. At the same time, however, the operating margin is expected to improve continuously. "We remain on track to achieve our targets by 2020," Jope assured.

If acquisitions and sales such as spreads, currency effects and the effects of hyperinflation in Argentina are not taken into account, organic growth was also low last year at 3.1 percent. Unilever thus met analysts' expectations. While the household care business in particular performed well, the food sector lagged behind in terms of growth. In regional terms, Latin America in the final quarter and Europe were worse than a year ago.

Unilever sold the spreads, which include the margarine brands Rama and Becel, to KKR for a good 6.8 billion euros. This was also reflected in the result: on balance, the Group earned a good 9.8 billion euros in 2018 - a good half more than a year earlier./tav/jkr/jha/ (dpa)

https://www.yumda.com/en/news/1159402/unilever-struggles-with-difficult-business-in-latin-america.html