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Unilever's Personal Care Helps Prop Up Results for Q4 2013, Full Year 2013
Posted: January 21, 2014
Unilever reported its 2013 full year and fourth quarter results. Of the results, Paul Polman, CEO of Unilever, noted, “2013 provides further evidence of the progress we are making in transforming Unilever into a sustainable growth company. We have delivered another year of consistent underlying sales growth and margin expansion coupled with strong cash flow. This has been achieved despite significant economic headwinds and highly competitive markets and reflects the benefits of strong margin accretive innovations and active cost management.
“Looking forward, we anticipate ongoing volatility in the external environment and are positioning Unilever accordingly. Although the investments we have made over the last five years ensure that we are well placed, we are determined to make Unilever even more agile and to fund further growth opportunities by driving out complexity and cost. Once again, we remain focused on delivering profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow,” Polman concluded.
For the full year 2013, Unilever reported a 3% drop in turnover to €49.8 billion, with foreign exchange down 5.9% and net acquisitions and disposals reporting a drop of 1.1%. However, underlying sales growth increased 4.3% with a volume increase of 2.5% and a price increase of 1.8%. Emerging markets saw underlying sales growth of 8.7% with a 4.8% increase in volume. Additionally, for Q4 2013 for Unilever, highlights included underlying sales growth of 4.1%, with volume growth of 2.7% and price growth of 1.4%. And emerging markets reported underlying sales growth of 8.4% for the quarter, with volume increasing 5.3%.
In its personal care division for Q4 2013, Unilever recorded turnover of €4.5 billion, representing a 7.3% increase in underlying sales growth, a 6.1% increase in underlying volume growth and a 1.2% increase in underlying price growth. For the full year 2013, the company saw €18.1 billion in turnover, which resulted in a 7.3% increase in underlying sales growth, a 5.5% increase in underlying volume growth and a 1.7% increase in underlying price growth.
Hair care growth in the quarter was underpinned by strong performances from Unilever’s global brands Dove, TreSemmé, Sunsilk and Clear. TreSemmé benefited from launches into countries such as India and Indonesia, as well as the success of its Keratin Smooth product range. Dove Repair Expertise is now in more than 50 markets, Toni&Guy was launched into the U.S., and Lux hair was relaunched in Japan and China with good initial results.
Skin cleansing growth highlights included Dove Nutrium Moisture shower gels, including the Purely Pampering range, Lifebuoy Clini-Care10 coupled with handwashing market development activities, and the launch of Lux Fine Fragrance body wash. In skin care, Vaseline Spray and Go continued to grow strongly, and Dove was driven by the Dove Men+Care face range and the new Dove facial cleansing range with DEFI technology launched in Japan. Also, Pond’s BB+ cream made good progress while the Pond’s Men range in Indonesia and Thailand is leading the development of the male segment of the market.
Deodorants grew ahead of markets, supported by the success of the Rexona Do:More campaign and the MotionSense technology, now available in both male and female versions. Axe Apollo established itself as a very successful variant, and compressed deodorants have driven growth ahead of the market while delivering significant environmental benefits. Oral care saw the continuation of the successful Brush Day and Night campaign, which is now in 15 countries, and successful innovations such as Pepsodent Germicheck+ and Zhong Hua Porcelain White launched.
Geographically, the company’s Asia/AMET/RUB region saw growth improve in Q4 versus Q3, despite slowing market growth in many countries. Unilever recorded a step up in growth in Russia, Turkey, China and Indonesia, while Australia rounded off the year with a fourth successive quarter of growth. However, growth in other countries such as Vietnam, Thailand and South Africa remained below historical run rates as a result of the weaker markets.
For the Americas, Latin America finished 2013 strong with double-digit underlying sales growth in Q4 underpinned by increased volume growth. The implementation of the new information system in Brazil was successfully completed. However, North America declined in weak markets mainly due to lower volumes in spreads and ice cream, but the personal care division continued to grow ahead of the market building on a high comparator in the same period in 2012.
And for Europe, Unilever’s markets remained flat, with the early signs of stabilization in southern Europe offset by slowing growth in northern Europe. Sales performance, while negative, was competitive. Declines in spreads weighed on performance in Germany and the Netherlands, but the U.K. delivered its twenty-fifth consecutive quarter of growth.