Unilever sticks with emerging markets as sales rebound

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Submitted by Chris Humberstone on Tue, 01/21/2014 - 01:49

After some unnerving news about L’Oreal and Revlon pulling brands out of China, finally some good news about emerging markets from Unilever:


Unilever’s sales in emerging markets rose 8.4% in the fourth quarter. More than half of Unilever’s sales are in emerging and developing markets.

The article notes that Russia, Turkey, China and Indonesia were notable performers.

While long term I think Turkey is a very important market to participate in, I also believe Turkey is in for some real challenges in 2014.

The article continues, “Chief Financial Officer Jean-Marc Huet cited strength in Latin America and Southeast Asia, as well as the increased contribution from Hindustan Unilever (HLL.NS), a venture in which Unilever recently increased its stake.
The company's capital expenditures for 2014 will be between 4 and 4.5 percent of sales, higher than its historic average, with most of the investment going into the personal care and emerging markets businesses. CEO Polman said the company would be investing more in Africa as the region stabilizes.
"From where we were in September, we're pleased with the performance of emerging markets," Huet said in an interview with Reuters. "The good news ... is that a big proportion is just good volume growth - we're selling more products."”

While they expect some negative currency effects in 2014, Unilever are solidly convinced the place to focus is the emerging markets.

"Make no mistake," said Chief Executive Officer Paul Polman. "Growth here remains well above that in the developed world and will continue to do so. We are therefore accelerating our investments in emerging markets and there is no change in our strategy."

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