Unilever Full-year 2020 Results

Growth was driven by hand and home hygiene products, laundry and in-home food and refreshments.
Growth was driven by hand and home hygiene products, laundry and in-home food and refreshments.

Unilever has announced its full-year 2020 results that showed an underlying sales growth of 1.9%, with volumes growing 1.6% and 0.3% from price.

Previously: No, Unilever is Not Selling Off its Beauty, Personal Care Business

The company reported that its underlying operating profit decreased 5.8% to €9.4 billion, but increased by 0.7% at constant exchange rates. Underlying earnings per share decreased 2.4%, but increased 4.1% at constant exchange rates.

E-commerce grew by 61% as Unilever captured demand in online channels, and now comprises 9% of Unilever sales.

According to Unilever, growth was driven by hand and home hygiene products, laundry, and in-home food and refreshments. 

The beauty and personal care category saw underlying sales grow 1.2% driven by volume, with flat price. 

Skin cleansing saw mid-teens volume-led growth for the year, driven by hand hygiene in combating the spread of COVID-19. Unilever's Lifebuoy hygiene brand grew by more than 50%, launching H for Handwashing, an educational campaign to teach children the importance of handwashing with soap.

Lockdowns and restricted living led to lower demand for skin care, deodorants and hair care, which each saw volume and price declines, most significantly in the second quarter. Skin care declined in the high-single digits and deodorants declined mid-single digits.

In hair care, growth in wash and care partially offset a decline in styling products, leading to a low single-digit decline overall.

Unilever's prestige beauty business was impacted by door closures in the health and beauty channel, but achieved a shift to more than 50% e-commerce, overall declining in the low single digits.

Oral care results rose with price growth, more than offsetting negative volumes driven by supply disruption related to lockdowns in key markets in the second quarter.

Underlying operating margin in beauty and personal care declined by 100 bps, with a reduction in gross margin driven by an adverse mix and additional costs related to COVID-19. 

CEO Alan Jope said:

In a volatile and unpredictable year, we have demonstrated Unilever’s resilience and agility through the COVID-19 pandemic. I would like to thank the Unilever team, whose dedication and hard work has delivered a strong set of results under the most difficult of circumstances.

Early in the year, we refocused the business on competitive growth, and the delivery of profit and cash as the best way to maximize value. We have delivered a step change in operational excellence through our focus on the fundamentals of growth. As a result, we are winning market share in over 60% of our business in the last quarter, on the basis of measurable markets. The business also generated underlying operating profit of €9.4 billion and free cash flow of €7.7 billion, an increase of €1.5 billion.

We progressed our strategic agenda, building on our existing sustainability commitments with ambitious new targets and actions, most recently with our plans to help build a more equitable and inclusive society. We completed the unification of our legal structure under a single parent company and we continue to work on separating out the tea business as we evolve our portfolio.

Today we are setting out our plans to drive long term growth through the strategic choices we are making and outlining our multi-year financial framework. While volatility and unpredictability will continue throughout 2021, we begin the year in good shape and are confident in our ability to adapt to a rapidly changing environment.

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