* Q4 emerging markets sales up 8.4 pct vs 5.9 pct in Q3
* CEO - no change in strategy, accelerating investments
* Full-year earnings, sales top analysts expectations
* Shares up 3.5 pct
By Martinne Geller
LONDON, Jan 21 Unilever said it would stick to
its emerging markets growth strategy as a fourth-quarter
recovery in sales in the region boosted the consumer goods
maker's 2013 results and reassured investors who had been
worried about consumer demand there.
Unilever generates more than half of its sales in emerging
and developing markets, so was hurt by economic weakness last
year in countries such as Indonesia and the devaluation of
currencies including the Brazilian real and Indian rupee.
However, the Anglo-Dutch firm , which makes
a vast array of products from Ben & Jerry's ice cream and Lipton
tea to Dove soap and Vaseline, said on Tuesday that sales in
emerging markets rose 8.4 percent in the fourth quarter, up from
a 5.9 percent rise in the third quarter.
"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
By 1145 GMT Unilever shares were up 3.8 percent at 2529.4
pence. The shares had fallen 11.5 percent over the last six
months and are flat over the past year, underperforming an
average 12 percent increase for its global consumer staples
rivals, according to Thomson Reuters data.
Aside from Unilever's own slowing sales, news that rivals
L'Oreal and Revlon had pulled some brands out
of China amid a slowdown had stoked the market's unease.
"Investors appear to be breathing a sigh of relief," said
Hargreaves Lansdown Stockbrokers analyst Keith Bowman.
"Importantly, sales in the emerging markets have seen a rebound,
with Russia, Turkey, China and Indonesia notable performers."
Chief Financial Officer Jean-Marc Huet cited strength in
Latin America and Southeast Asia, as well as the increased
contribution from Hindustan Unilever, 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."
Underlying sales grew 4.1 percent for the fourth quarter,
topping analysts' estimates of 3.9 percent, according to a
company-supplied consensus. That was up from 3.2 in the third
WEAKER START TO 2014
Polman noted that encouraging economic indicators in
developed markets had not yet translated into greater demand for
"So far, it has been sectors like cars and housing that have
seen the benefits," Polman said. "Developed markets therefore
remain flat at best."
But Unilever stood by its goals for 2014, which call for
volume growth ahead of its broader markets and improvements in
operating margin and cash flow.
While overall markets are currently growing at about 3
percent, it forecast its own sales growth at about 3 to 5
percent for the year. Growth will be closer to the low end of
that range for the current first quarter, the company said,
citing a later Easter holiday that should push some sales into
the second quarter.
In 2013, underlying sales rose 4.3 percent. Including the
impact of currency exchange rates and divestments, turnover fell
3 percent. Core earnings were 1.58 euros per share, above
analysts' average estimate of about 1.53 euros per share.
Foreign exchange rates should reduce sales growth by about 5
percent in 2014, the company said. It has a large presence in
Brazil, India, South Africa, Indonesia, Argentina and Turkey --
which have all seen a depreciation in their currency.