Consumer goods group Unilever said 2012 would likely be a difficult year as emerging market growth slows and Europe and North America stay flat, after matching 2011 sales forecasts helped by its own sharp price rises.
The Anglo-Dutch group, which pushed up the prices of brands such as Dove, Hellmann's, and Knorr to offset higher commodity costs, said on Thursday growth in emerging markets had now slowed due to those price rises and weak consumer confidence.
Finance director Jean-Marc Huet said growth in emerging markets such as Africa, Asia and Latin America stayed strong but the group needed to do better in Russia and eastern Europe where its own performance was sluggish.
We have seen a deceleration in some markets and one or two are now more difficult, so our focus is on Russia and eastern Europe where we need to improve, he told reporters.
The world's third-biggest consumer goods group reported underlying sales in 2011 rose 6.5 percent in line with forecasts of 6.4 percent, with four-quarter growth of 6.6 percent compared to rival Procter & Gamble which saw a 4 percent rise.
Unilever shares were the biggest faller on London's FTSE 100 index, down 3 percent at 2,023 pence by 8:05 a.m.
Emerging markets, which make up 54 percent of Unilever's business, grew 11.5 percent in 2011. In product terms, its personal care goods like Lux and Sunsilk were the fastest growing at 10 percent while its food business grew just over 3 percent.
We expect the macro-economic environment to remain difficult in 2012 and input cost headwinds will persist although to a lesser extent than in 2011, said Chief Executive Paul Polman said in a results statement.
The group which sells Lipton tea, Ragu sauces and Blue Band margarine, reported 2011 core earnings per share rose 4 percent to 1.41 euros, below forecasts of 1.46 euros.
European food rivals report later this month with France's Danone on Feb 15 and Swiss Nestle (Reporting by David Jones; Editing by Hans-Juergen Peters)
(Reporting by David Jones; Editing by Hans-Juergen Peters)