Unilever sees 2019 remaining ‘challenging’ with slower sales growth

Unilever’s new boss started his tenure on a downbeat tone saying he expects the new year to remain tough and that sales growth will come at the lower end of the consumer goods giant’s target.

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

“We anticipate underlying sales growth will be in the lower half of our multi-year 3%-5% range, with continued improvement in underlying operating margin and another year of strong free cash flow.”

He maintained that Unilever is on track for its 2020 goals.

Mr Polman stood down at the end of December after a decade at the group where he oversaw the failed plan to move Unilever’s headquarters from London to Rotterdam and fended off a takeover bid from rival Kraft Heinz.

Mr Jope was promoted to CEO from his previous position of president of the group’s beauty and personal care division.

Unilever posted a 5.1% decline in turnover to 50.98 billion euros (£44.65 billion), which the company blamed on foreign exchange headwinds of 6.7% and the disposal of the spreads business, which was completed last July.

However, pre-tax profits increased 52% to 12.38 billion euros (£10.84 billion).

Underlying sales grew by 2.9% in 2018 from the year earlier and, excluding the spreads business, by 3.1%.

Mr Jope said Unilever had a “solid” 2018 with good volume growth of 2.1% and “high-quality margin progression”.

Unilever’s operating margin grew 8.1% thanks to the 4.3 billion euro (£3.7 billion) profit made on the sale of the spreads unit.

“Looking forward, accelerating growth will be our number one priority. With so many of our brands enjoying leadership positions, we have significant opportunities to develop our markets, as well as to benefit from our deep global reach and purpose-led brands,” Mr Jope said.

“We will capitalise on our strengthened organisation and portfolio, and our digital transformation programme, to bring higher levels of speed and agility. Strong delivery from our savings programmes will improve productivity and fund our growth ambitions.”