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Business News

Lollies on ice but emerging markets set to lift Unilever

A damp, cool summer for much of northern Europe has meant Wall's Magnum, Twister, Calippo and Mini Milk ices have been stuck in the freezer rather than being gobbled up.

Unilever, the owner of Wall's, will reveal that conditions in Europe continue to be tough in its second-quarter results on Thursday.

But in contrast to weather-hampered and euro-crisis-hit Europe, the emerging markets – which make up more than half of Unilever's business –will fare better for the world's second-largest consumer goods group.

Unlike rival Procter & Gamble – the world's largest – which issued a profits warning last month, Unilever is expected to report a solid but unspectacular quarter. The emerging markets are growing at different paces, and as China's growth begins to slow, areas of Latin America and Africa continue to boom.

Analysts expect the Dove soap-to-Knorr soup group to report 4.8% like-for-like sales growth although margins are forecast to be flat. Unilever's dividend could rise by as much 8 per cent.

Analysts also predict Procter & Gamble's activist shareholder Bill Ackman's Pershing Square Capital Management could move its focus to Unilever. Liberum Capital believes pressure will build for the company to sell a large chunk of its food business.