Times are getting tough for European firms in emerging markets where HSBC talks of a cyclical "slowdown", Diageo sees "choppy conditions" and Unilever views deceleration as the "new normal."

One way or another, the slowing growth story in countries like China, Brazil and India is turning out to be the Achilles heel of Europe's big corporations this reporting season - from banking to whisky to food and pharmaceuticals.

Faced with recession-hit demand at home, companies have been expanding heavily in emerging markets, which are expected to account for 33% of sales this year, or 2.8 times more than in 1997, according to a Morgan Stanley analysis of 505 leading European groups.

That has attracted investors on the way up - but it now makes businesses vulnerable as the boom loses momentum. It is also exposing particular missteps in some crucial countries.

So far this year, shares in European companies with high emerging markets exposure have increased by just under 5%, lagging gains of more than 11% in the broader European market.

"Investors are less and less viewing emerging markets as a safe haven. Instead, they are looking at putting more money back into Europe," said Stephane Ekolo, chief European strategist at Market Securities.

Adding to the pain is a weakening of a number of emerging market currencies, such as the Brazilian real and India rupee, which Unilever CEO Paul Polman said had been "bigger and deeper than anybody has anticipated" - a fact that threatens Western companies' pricing power overseas.

On top of pressure on sales and margins, the current slowdown can also reveal other weaknesses.

HSBC's bad debts in Brazil and Mexico, for example, have jumped, adding to the more general gloom that sent shares in Europe's biggest bank down more than 4% on Monday, while rival Standard Chartered hit problems in South Korea.

Brazil has been a black spot, too, for drug maker Sanofi as slowing sales exposed over-stocked supply lines - a situation CEO Chris Viehbacher described as "a mess."

Unwinding Stretched Valuations

China is the real worry for many companies, however. With an expected 2013 growth rate of more than 7%, it may sound like an economy still humming, but the decline from the double-digit rates seen in earlier years is a shock.

Germany's Lanxess, the world's largest maker of synthetic rubber for tires, felt the China chill on Tuesday as it warned that slowing growth and no sign of a recovery in car markets would hit earnings.

Such warnings - coupled with a survey showing business activity across emerging economies contracted for the first time in over four years last month - help explain eroding premiums for companies with emerging markets exposure.

"We're seeing an unwinding of what were some pretty stretched valuation premiums, especially now we've started to see positive signs on the European economy," said Andrew King, head of European equities at BNP Paribas Investment Partners.

Structural changes are also redrawing some market opportunities, particularly in China, where there is a shift to less reliance on exports and investment as drivers of growth.

"There will be stresses and strains as China makes that shift and that's evident," said Standard Chartered CEO Peter Sands, who sees plenty of variation across emerging markets.

A change of leadership in Beijing has also brought with it a crackdown in the tradition of gifts-for-favors, hitting makers of luxury watches and handbags, such as Gucci owner Kering and LVMH, as well as producers of deluxe drinks brands, including Diageo and Remy Cointreau.

Drug companies face probes into over-pricing and alleged bribery in the industry, centered on GlaxoSmithKline, threatening short-term turmoil in a pivotal growth market.

Top Western milk formula makers, including Nestle and Danone, have already been pressured to cut prices in China - and foreign luxury carmakers could be next, according the country's official media.

While growth in the big emerging markets saved corporate profits during the depth of the downturn, it is clear things will look different from now on - though that does not mean the emerging markets story will flip from boom to bust.

HSBC CEO Stuart Gulliver points out that China's economy is still growing more each year than its original GDP 18 years ago.

And the weather remains kind to Unilever. The consumer group now sells 40% of all its ice cream in emerging markets, where at least the sun shines for more of the year.