Unilever, Nestlé Feast On Emerging Markets -- WSJ
19 Abril 2019 - 02:02AM
Noticias Dow Jones
By Saabira Chaudhuri
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 19, 2019).
Unilever PLC and Nestlé SA both beat first-quarter sales
forecasts, buoyed by stronger results in emerging markets.
Rising sales in developing countries for years have helped
consumer-goods companies offset sluggish growth in developed
markets. But the industry has faced a bigger challenge of late
because of volatile currencies and political uncertainty. That's
particularly been the case in Latin America where Argentina is
enduring an economic crisis and Brazil's economy continues to
recover from a truckers' strike last year.
However, those issues appeared to abate for Nestlé and Unilever
in the first three months of the year, with both reporting an
uptick in emerging-market growth driven by volumes and prices.
Unilever, which sells Dove soap and Hellmann's mayonnaise,
reported underlying sales growth -- which strips out acquisitions,
disposals and currency movements -- of 5% in emerging markets, up
from 4.5% in the fourth quarter. It grew 0.3% in developed
markets.
Nescafe coffee maker Nestlé reported sales growth of 6.3% in
emerging markets, stripping out acquisitions, disposals and
currency moves. Developed market growth was 1.2%.
Both companies flagged an improving situation in Brazil,
although Unilever Chief Financial Officer Graeme Pitkethly
cautioned the country's economy was still "very difficult."
Unilever said sales in Brazil rose by mid-single digits as it
pushed through higher prices even as volumes declined.
Nestlé reported an even stronger improvement in the country --
its fourth biggest market -- saying sales rose by a double-digit
percentage with both pricing and volume up. The world's biggest
packaged-foods maker said Latin America overall saw mid-single
digit sales growth helped by dairy, confectionery and petcare.
Overall, Nestlé reported total first-quarter sales of 22.18
billion Swiss francs ($21.98 billion), up from 21.26 billion francs
in the same period a year earlier. Comparable sales rose 3.4%,
beating the 2.8% gain analysts had expected.
Nestlé said sales in the Americas improved -- up 3.4% compared
with 2% in prior-year period -- driven by higher prices in the
U.S., as well as Brazil.
Overall revenue at Unilever fell to EUR12.4 billion ($14
billion) from EUR12.6 billion reflecting the sale of the company's
spreads business last summer. Unilever reported underlying sales
growth -- which strips out the impact of currency and acquisitions
and disposals -- of 3.1%, beating the 2.8% analysts were
expecting.
Unilever called out Indonesia, Thailand and Vietnam as having
performed well and said both China and India had a strong
quarter.
However, the company is still facing a tough environment in some
key emerging markets. In Turkey, Unilever is "battling with high
inflation and tricky economics," Mr. Pitkethly said on a call with
reporters.
Results also continued to be hit by hyperinflation in Argentina
where companies have been forced to significantly increase prices,
causing volumes to drop. Consumer prices in Argentina jumped 54.7%
in March from a year earlier, according to Argentina's National
Institute of Statistics and Censuses.
Unilever said its volumes in Argentina dropped 11% in the
quarter.
Given the abnormal nature of the price rises in Argentina,
Unilever strips these out, an accounting measure it said makes
comparing its results with those of peers difficult since different
companies are adopting various accounting approaches for
Argentina.
Brian Blackstone contributed to this article
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
April 19, 2019 02:47 ET (06:47 GMT)
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