Unilever (LON:ULVR) shares fell nearly five percent on Thursday, after the company admitted “challenging” market conditions had given the company a difficult start to the year.
Currency fluctuation had a big effect on the group, whose revenue fell 1 percent to 52.7 billion euros. This was largely offset by a 5.5 percent rise in net profit from a year earlier to 5.5 billion euros.
For the full year to the company saw underlying sales grow 3.7 percent, ahead of market movements, with prices moving up 2.8 percent and volume up 0.9 percent. Unilever’s growth strategy of late has involved hiking prices rather than volumes of sales, causing some concern for analysts and prompting its share price to fall.
Paul Polman, Unilever’s Chief Executive Officer, said in a statement:
“We have delivered another good all-round performance despite severe economic disruptions, particularly in India and Brazil, two of our largest markets. This further demonstrates the progress we have made in transforming Unilever into a more resilient business. We have again grown ahead of our markets, driven by strong innovations that support our category strategies.
“Our priorities for 2017 continue to be volume growth ahead of our markets, a further increase in core operating margin and strong cash flow. The tough market conditions which made the end of the year particularly challenging are likely to continue in the first half of 2017. Against this background, we expect a slow start with growth improving as the year progresses.”
The global company, who sell brands including Ben & Jerry’s, Dove and Hellman’s, saw the strongest growth in emerging markets, where sales were up 6.5 percent despite a 5.4 percent price hike.
The personal-care arm of the group reported underlying sales growth of 4.2 percent, a small rise on the 4.1 percent reported for 2015. In home care, Unilever reported 4.9 percent growth, a significant fall on the 5.9 percent achieved last year.
Shares in Unilever are currently trading down 4.51 percent at 3,195.00 (1239GMT).