Strong full-year results at Unilever

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Recently Unilever announced their results for the full year 2020, which show underlying sales growth of 1.9%. The company focused on driving competitive growth through execution against their five growth fundamentals and delivered a step up in competitive performance.

Resilience and agility

“In a volatile and unpredictable year, we have demonstrated 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 maximise 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. 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.”says Allen Jupe, CEO Unilever.

Beauty & Personal Care underlying sales grew 1.2% driven by volume, with flat price

Skin cleansing saw mid-teens volume-led growth for the year, driven by the important role of hand hygiene in combatting the spread of Covid-19. Our Lifebuoy hygiene brand grew by over 50%, launching H for Handwashing, an educational campaign to teach children the importance of handwashing with soap.

Lock-downs and restricted living in the company´s  markets 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 high-single digit and deodorants declined mid-single digit. In hair care, growth in wash and care partially offset a decline in styling products, leading to a low-single digit decline overall. Oral care grew with price growth more than offsetting negative volumes driven by supply disruption related to lock-downs in key markets in the second quarter.

The company´s Prestige Beauty business was impacted by door closures in the health and beauty channel, but achieved a shift to over 50% e-commerce, overall declining low-single digit.

Underlying operating margin in Beauty & Personal Care declined by 100bps, with a reduction in gross margin driven by adverse mix and additional costs related to Covid-19. This was partially offset by a reduction in brand and marketing investment, as we conserved spend during lock-down periods, before significantly stepping up investment in the second half.

Home Care underlying sales grew 4.5%, with 5.1% from volume and negative pricing of 0.6%.

The compay´s  home and hygiene brands delivered high-teens volume-led underlying sales growth. Demand for products with germ-killing and antibacterial benefits has been elevated throughout the year. Domestos grew over 25% as we launched the brand in China and introduced spray and wipe formats. The living hygiene range of local brands grew over 50%, led by Lysoform’s educational campaigns in Italy. Within the fabric category, fabric solutions declined slightly, driven by lower consumer prices as we passed on some of the benefits of reduced commodity costs in the second half of the year. Capsules and liquids continued to grow. Low-single digit growth in fabric sensations was led by Indonesia and by Turkey, where the relaunched Snuggle (Yumos) brand performed well. Underlying operating margin in Home Care declined by 30bps, driven by increased brand and marketing investment as they invested strongly behind their brands in the second half of the year. Overheads and gross margin improved, helped by lower material costs, despite Covid-19 related costs and negative price.

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