Unilever posts profit rise, warns of 'tough market'

Dutch giant Unilever on Thursday posted a 5.5 percent rise in net profit boosted in part by deodorant sales, but warned "tough markets" are to continue in 2017.

The Rotterdam-based group clocked 5.5 billion euros ($5.9 billion) in net profit last year, while turnover came in at 52.7 billion euros, down 1.0 percent year-on-year.

Unilever said it "delivered another good all-round performance, despite severe economic disruptions, particularly in India and Brazil, two of our largest markets." Brazil's economic crisis and India's demonetisation "presented significant additional headwinds," group chief executive Paul Polman said in a statement.

Despite setbacks Unilever grew its personal care arm by 0.5 percent, including in the deodorant sector, driven by the continued success of dry sprays in North America. Its biggest personal care brand, Dove, also "had another good year," Unilever said.

In Europe, fourth-quarter sales fell 2.3 percent, hurt by weak volumes and continued price deflation in many markets. Yet Pitkethly said European prices were starting to show recovery, due partly to price rises in Britain the company took in the wake of the Brexit-related fall in the pound.

"You are actually starting to see the impact of things like the devaluation in the UK pull through in terms of market growth," Pitkethly said.

Created in 1929, Unilever said it was now reshaping its portfolio by adding new businesses in fast-growing segments. Last year it bought the US-based start-up Dollar Shave Club, which shook up markets with its online subscription model. It also bought haircare products maker Living Proof, whose lotions and potions are billed as high-tech products based on scientific research from the Massachusetts Institute of Technology (MIT). In September, Unilever announced it was acquiring eco-conscious US cleaning products group Seventh Generation to expand its range of environmentally friendly brands.

But Unilever's Polman warned that "tough market conditions which made the end of the year particularly challenging are likely to continue in the first half of 2017".

"Against this backdrop, we expect a slow start with growth improving as the year progresses," Polman said.

Core earnings increased to 1.88 euros per share for 2016.

Unilever, which employs 173,000 people around the world, owns more than 400 brands.