Unilever beats expectations

Currency headwinds dampened full-year reported sales growth, but strip these out and underlying revenue was 4.3 per cent higher. Chief executive Paul Polman said product innovation, low-margin business disposals, cost savings and an 110 basis-point improvement in the gross margin all helped push the crucial operating margin 40 basis points higher, to 14.1 per cent.

Otherwise, it was the usual story of a two-speed Unilever, with emerging markets outpacing developed ones, and the home and personal care categories outperforming the food and refreshment ones. Emerging market growth may not have been as pacey as in previous years, but the bloc, which accounted for 57 per cent of group revenue, still saw sales rise 8.7 per cent. Latin America even experienced double-digit year-on-year growth in the final quarter. Unilever's developed markets, by comparison, saw revenue slump 1.3 per cent, as flat growth in Europe and declines in North America offset a decent showing in the UK.

Food was another weak point. The segment managed just 0.3 per cent underlying sales growth, hampered by the struggling North American spreads business and weak ice-cream sales within the refreshments division. In contrast, home-care sales jumped 8 per cent, while personal care enjoyed a 7.3 per cent rise. Dove soap and laundry detergents were particularly popular, while household cleaners such as Domestos bleach seemingly flew off the shelves in the final quarter.

Broker Panmure Gordon expects underlying EPS of 157¢ for 2014, down from 158¢ in 2013, as weakening emerging market currencies offset underlying growth.