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Unilever reports 3.8% growth in underlying Q3 revenue

Unilever PLC on Oct. 18 reported a 4.8% decline in third-quarter revenue for 2018 partly due to the effects of foreign currency translation, although underlying sales rose 3.8% as the company saw improved growth across all divisions.

The Anglo-Dutch consumer goods company, whose Amsterdam-listed entity is Unilever NV, said revenue in the three months through September fell to €12.53 billion from €13.17 billion in the same period a year ago. Unilever said it had restated its revenue in 2018 to reflect the adoption of certain financial reporting methods to account for the hyperinflationary economy of Argentina.

A mean consensus of analysts' estimates had pointed to revenue of €12.55 billion, according to data compiled by S&P Global Market Intelligence.

Underlying sales, which exclude the impact of acquisitions, disposals or currency changes, rose 3.8% as growth accelerated across each of the three divisions of beauty and personal care, home care and foods and refreshment.

"We were able to increase prices whilst maintaining good volume growth which reflects the strength of our brands and quality of our innovation program," said Paul Polman, Unilever's CEO, in a statement. "We continue to expect underlying growth in the 3%-5% range, an improvement in underlying margin and strong cash flow. We remain on track for our 2020 goals."

Unilever, which makes Dove soap, Knorr soups and Lipton tea, was recently dealt a blow on Oct. 5 when it withdrew a proposal to scrap its dual Anglo-Dutch structure and move its headquarters to the Netherlands, an idea championed by Polman and other executives. Unilever abandoned the plan after several big shareholders opposed it.

In the third quarter, the beauty and personal care division reported underlying sales growth of 4%, helped by improved price growth and strong growth momentum in the skin care business. Underlying sales growth was 4.5% for the home care business, boosted by stronger pricing and the recovery from a trucker's strike in Brazil. Underlying sales growth was 3.2% for the foods and refreshment business. For the first nine months of 2018, underlying sales rose 2.9%.

Unilever's business in Europe grew modestly in the quarter, mainly driven by strong ice cream sales that got a boost from warmer weather. In the U.K., good ice cream growth was partly offset by increased competitive pressure in fabric solutions. France was flat, while Italy declined in the quarter, Unilever said.

Underlying sales in Latin America rose 1.5%, partly reflecting recovery from the trucker's strike in Brazil. In Argentina, price growth accelerated to 34% and put pressure on volumes, which declined by double digits. Underlying sales in North America rose 1.9% in the quarter. Asia and other markets reported underlying sales growth of 6.6%.