Unilever Q1 Sales Flat, Turnover Up 0.2%

Unilever has reported some resiliency in beauty and personal care.
Unilever has reported some resiliency in beauty and personal care.

Unilever has reported Q1 2020 turnover of €12.4 billion, a gain of 0.2%, year-over-year. Sales in developed markets grew 2.8%, while emerging market sales dropped 1.8%. Beauty and personal care sales rose 0.3% during the period, driven by 0.7% volume growth and household stocking.

Underlying conditions: Beauty 2020-2030.

  • Skin cleansing sales volume drove mid-single-digit growth due to hygiene product demand.  The Lifebuoy brand launched in 43 new markets in the quarter, while new products in the hygiene space were launched under a number of brands.
  • Skin care sales fell due to travel restrictions and a major lockdown in India. Vaseline, however, did well, with mid-single-digit growth. The company's anti-bacterial hand cream in the United Kingdom and the Pro Derma Clinical range in China boosted results. Prestige brands were hit by beauty channel closures across markets. The Prestige portfolio was impacted by health and beauty channel closures in many markets.
  • U.S. hair care sales grew for the period, though sales were negatively impacted by lockdowns in India and China. Deodorants grew in the mid-single-digit range, driven by Rexona Clinical and Dove.
  • Oral care growth was led by natural toothpasts and bamboo toothpasts. Negative pricing was primarily driven by India following price reductions in the previous quarter.

CEO Alan Jope commented:

COVID-19 is having an unprecedented impact on people and economies worldwide. Unilever has moved at speed to support our multiple stakeholders and maintain our operations through the crisis, and prepare for growth in a new normal. We have structured our immediate response into five areas: supporting our people; protecting supply; serving demand; contributing to society; and maintaining our financial strength.

Our people are our priority and we moved quickly to ensure the safety of our workforce as well as to protect incomes and jobs. We are now focused on redeploying people to those parts of the business that are seeing high demand.

We have been able to maintain the supply of product and we are keeping our factories running through the many unpredictable challenges in local operating environments across our value chain. We are also opening up new capacity where it is most needed, such as in hand hygiene and food.

Demand patterns are changing. As the crisis hits countries around the world, we see upswings in sales of hygiene and in-home food products, combined with some household stocking, and near cessation of out of home consumption which is particularly affecting our food service and ice cream business. We are adapting to new demand patterns and are preparing for lasting changes in consumer behaviour, in each country, as we move out of the crisis and into recovery.

The crisis highlights the importance of our commitment to use our scale and brands as a force for good in society, throughout the pandemic and beyond. We are supporting communities through donations and partnerships, while our Lifebuoy and Domestos brands are leading the way on hygiene education programmes.

We take these actions in the knowledge that we enter the crisis with a strong balance sheet and cash position. We are systematically reviewing all areas of cash generation and usage and re-evaluating all costs in the light of the current circumstances, so that we can continue to invest in our brands and reallocate funds towards the best opportunities.

We will continue to adapt throughout this crisis. However, the unknown severity and duration of the pandemic, as well as the containment measures that may be adopted in each country, mean that we cannot reliably assess the impact across our markets and our business. We are therefore withdrawing our previous growth and margin outlook for 2020.

Our portfolio, our financial stability and the quality of our leadership teams around the world mean that Unilever is well-positioned during this crisis and for the changing world that will come afterwards. The fundamental drivers of growth continue to be the key principles driving our execution as we remain focused on delivering superior long-term financial performance through our sustainable business model.






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