Marmite and PG Tips owner Unilever expects slow start to 2017

Consumer goods giant Unilever has warned of a 'slow start' to 2017 after currency headwinds and economic challenges in India, Brazil and Europe dragged on full-year earnings.

The Marmite, Dove soap and PG Tips firm said annual net profit rose 5.5% to €5.5bn (£4.7bn), but revenues dropped 1% to €52.7bn euros (£44.7bn), while underlying sales rose by a lower-than-expected 3.7%.

The company said it suffered from severe disruptions from the economic crisis in Brazil and India's demonetisation drive, which saw huge banknotes taken out of circulation.

Unilever – whose vast array of brands also includes Flora spread, Magnum ice cream and Lipton tea – said price deflation in Europe also continued to weigh on sales in developed markets, which dropped 0.2% despite growth in North America.

The company also blamed the drop in turnover on negative currency impacts.

Chief executive Paul Polman said: 'Our priorities for 2017 continue to be volume growth ahead of our markets, a further increase in core operating margin and strong cash flow.

'The tough market conditions which made the end of the year particularly challenging are likely to continue in the first half of 2017. Against this background, we expect a slow start with growth improving as the year progresses.'