Published: Sun, February 03, 2019
Business | By Eloise Houston

Unilever has more to do on growth, new CEO Alan Jope admits

Unilever has more to do on growth, new CEO Alan Jope admits

Alan Jope, who recently replaced Paul Polman as chief executive, said: "In 2019 we expect market conditions to remain challenging".

Shares in Unilever (LON:ULVR) have fallen deep into the red in London this morning as the consumer goods giant warned that sales growth this year was likely to be at the lower end of its multi-year guidance.

The Anglo-Dutch group reported sales growth of 2.9 per cent, which was below a consensus forecast of 3.5 per cent.

Unilever shares were down around 3 percent to 45.87 euros at 1021 GMT on January 31.

'In 2019 we expect market conditions to remain challenging.

Unilever has said it is stockpiling Magnum and Ben & Jerry's ice cream, in preparation for a no-deal Brexit.

The London-based manufacturer, which is trying to move on from 2018's rejected plan to move its headquarters from the United Kingdom to the Netherlands due to concerns over uncertainty surrounding Brexit, had stated that full-year sales would be at the bottom end of its 3 to 5 percent forecast range.

Unilever's ice creams are produced on the Continent.

The Unilever chief executive said that the company had only stockpiled two weeks' worth of goods and raw materials because "one of the things we have learned is, when you".

Management is targeting an underlying operating margin of 20% and cash flow conversion of 100% by 2020.

"There's nothing new about the intention, but so far at least the reality has failed to live up to it", said analysts at RBC Capital Markets, referring to Jope's stated focus on accelerating growth.

The company's underlying sales in North America edged up 0.9 percent as strong sales of deodorants, soaps and home care products were offset by competition in the market for tea and dressings. Overall, underlying sales in developed markets grew only 0.4 percent in the quarter.

Full year sales growth was 3.1 per cent, excluding the spreads business it sold last year, with annual turnover €49.6bn (£43.4bn), a five per cent decrease on 2017. Its full-year underlying earnings were 2.36 euros per share, topping analysts' estimates of 2.31 per share.

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