GCI Magazine

Marketers Sponsored by

Email This Item!
Increase Text Size

Emerging Markets Help Push Unilever to 3.2% Sales Growth

Posted: October 24, 2013

Unilever released its results for the third quarter and first nine months of the year. Highlights for the third quarter include underlying sales growth of 3.2%, with emerging markets up 5.9%, and underlying volume growth up 1.9%, with pricing up 1.3%. Turnover for the third quarter decreased 6.5% to €12.5 billion, including a negative currency impact down 8.5%.

For the first nine months of 2013, Unilever shared highlights of underlying sales growth increased by 4.4%, with emerging markets up 8.8%, and underlying volume growth up 2.4%, ahead of markets, with pricing up 1.9%. Turnover for the time period decreased 2% to €38 billion, including a negative currency impact of 5%.

Growth continued to slow in emerging markets for Unilever as macro-economic headwinds and the consequences of currency weakness affected consumer demand across a significant number of the emerging countries. The company also saw developed markets have not recovered and remain flat to down, with little sign of any improvement so far. In this context, the company expects to see continued high levels of competition in many markets and promotional intensity remains high.

Against this background, Unilever continued to grow ahead of its markets, albeit at a slower rate, and maintained a good balance between volume and price. Emerging markets growth slowed to 5.9% while developed markets showed a progressive improvement but still declined in the quarter by 0.3%. Volume growth was positive in both emerging and developed markets in the quarter, but price growth moderated as the company lapped prior year increases and took action to ensure that its brands remain competitive in key markets.

Commenting on the results, CEO Paul Polman said, “Underlying sales growth of 4.4% over the first nine months is ahead of our markets. Emerging markets continue to be the main driver of our growth and, despite the current slowdown, they remain a significant growth opportunity which the company is well-placed to capitalize on. We have not yet seen an improvement in market conditions in North America or Europe. We will continue to accelerate our innovations, backed with competitive support, to build long term growth and value. We expect to report a sequential quarterly improvement in underlying sales growth in the fourth quarter driven by a strong innovation pipeline. We remain focused on achieving another year of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow.”

Specifically for Unilever’s personal care division, the company continued to deliver healthy, volume-led growth in the quarter ahead of markets, with a good balance of growth across the sub-categories.

Hair performed well, reflecting the strength of its portfolio of brands. Dove Repair Expertise has now been launched across most of the company’s markets, Clear delivered double-digit growth despite lapping high prior year comparators, and TreSemmé is making good progress in new markets such as India and Indonesia. Sunsilk progressed well thanks to a strong activity plan, which included the relaunch of Sunsilk Soft & Smooth, and the launch of Toni&Guy into new markets continues with, for example, the recent introduction in the U.S. retail channel.

Skin cleansing growth was driven by strong performances by Dove and Lifebuoy. Improved Dove NutriumMoisture shower gels delivered strong results, and the Dove Purely Pampering range has been successfully launched in China. Lifebuoy Clini-care 10 performed well with notable strength in South Africa and in India, and in skin care, Vaseline body lotion sprays continued their success in North America and are now being extended to the U.K. and the Netherlands. The male face launch of Dove Men+Care continued to drive growth, and Unilever re-launched Fair & Lovely in India, bringing the brand to market with large-scale marketing support. Also Pond’s Flawless Radiance BB cream has been successfully launched in South Africa, and Pond’s Men is progressing well in Indonesia.

Deodorants growth reflected another strong performance by Dove in both the male and female ranges. The Rexona “Do:More” campaign is gaining traction in many markets, and the new Rexona Men packaging is being rolled out, starting in Latin America and the U.K. And despite increasing competitive intensity, Unilever’s oral business has done well as a result of the “Brush Day and Night” campaign and new product launches such as Pepsodent Germicheck+ in India and Zhong Hua Porcelain White in China. Closeup Diamond Attraction was launched in Brazil.

Find more details on the 2013 third quarter and first nine months results from Unilever by clicking here.