Unilever Targets Long-Term Growth in China and India
Unilever is targeting long-term sales growth of 3-5% after a recovery in China and India helped them gain momentum in the final three months of 2020.
The company's emerging market performance in Q4 has, nevertheless, missed market expectations, resulting in shares losing around 4% in early trading.
Setting out its longer-term targets, Unilever said it would aim for underlying sales growth ahead of its markets, as well as profit growth ahead of sales growth. Indeed, the company’s business in China had normalized in many categories, while economic activity in India picked up particularly in the last quarter. Sales in China and India both rose in the high-single-digit percentage range - the company's strongest performing markets in the quarter.
"Slower EM's (emerging markets) in Q4 is the root cause of the top line miss to Jefferies estimates, playing out against a background of extended lockdown activity worldwide”, Jefferies analysts commented. The brokerage expected Q4 underlying sales growth of 4.4%.
Turnover for the quarter came in at 12.1 billion euros, as opposed to analysts forecasts of 12.16 billion euros. Full-year 2020 turnover was 50.7 billion euros, slightly lower than the 50.81 billion euros expected. Adjusted earnings per share for the year were 2.48 euros, one cent lower than estimated.
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