Despite having reticent consumers pull down its growth in sales in the third quarter, marking its weakest in almost half a decade, Unilever (ULVR.L) (UNc.AS) vowed to investors that profits will go up through increased cost cuts and new, less expensive products.
Unilever has a majority of its sales in Europe, thus the maker of household brands such as Dove soap and Omo detergent have been burdened heavily by Europe’s emerging market slowdown and continuing economic problems.
The company is injecting less expensive products in the market such as smaller Cornetto ice cream cones that will be sold for as low as 1 lira in Turkey or 1 euro in Spain. In Brazil, it is given more focus on local food brand, Arisco.
Unilever Chief Financial Officer Jean-Marc Huet stated that the company has learned the essentials of value brands and owning them in the portfolio and that when the disposable income level falls, it will be there to catch some of the downtrading.
He went on to state that at times when markets are weak and growth is less, applying all levers to translate top line growth into earnings per share is all the more crucial.