Unilever reports growth especially in emerging markets

seven arrows in different shades of blue are arranged like a pyramid and point upwards. They symbolize the growth of the company named in the message.
seven arrows in different shades of blue are arranged like a pyramid and point upwards. They symbolize the growth of the company named in the message.

Source: GHotz_Fotolia_133754926_Wachstum

According to the Unilever traiding statement for the first quarter 2019 the company experienced an underlying sales growth of 3.1 % compared to the Q1 2018. Underlying sales in emerging markets grew 5.0 %. Turnover decreased 1.6% driven by the disposal of spreads.

“Acquisitions we have made since 2015 collectively grew double-digit in the first quarter”

“We have delivered a solid start that keeps us on track for our full year expectations. Growth was led by emerging markets and was balanced between volume and price. Accelerating growth is our number one priority. It requires both great execution and a continued strategic shift into faster growth segments and channels. We saw good performance in key growth channels including out of home and e-commerce and benefited from stronger global innovations and faster and more relevant local innovation. The acquisitions we have made since 2015 collectively grew double-digit in the first quarter. With the leadership changes announced in March, we are building the right team to drive our growth agenda. For the full year we continue to expect underlying sales growth to be in the lower half of our multi-year 3% – 5% range, an improvement in underlying operating margin that keeps us on track for the 2020 target and another year of strong free cash flow”, says CEO Alan Jope.

Overall performance

Underlying sales growth was 3.1%, led by our emerging market business which grew 5.0%. Growth was balanced between volume and price and the pick-up in volume, compared to the fourth quarter, was helped by sustained momentum in South East Asia and North Asia. Price growth from Argentina, which would have added 80bps to reported USG, was excluded due to its hyperinflationary status whilst the volume decline reduced group underlying sales growth by 10bps. Turnover decreased 1.6% to €12.4 billion, driven by the disposal of spreads which we completed in July 2018.

Beauty & Personal Care: Skin care and deodorants had a good start

Underlying sales grew 3.1%. Skin care and deodorants had a good start, whilst hair and skin cleansing grew modestly. Sales in oral care declined due to challenging market conditions. The company´s  global brands were helped by innovations including the launch of a new patented anti-perspirant technology in our “Rexona” Clinical Protection range and “Dove” foaming handwash in North America, with five times more moisturisers than the leading hand wash. “Ponds” and “Sunsilk” also grew well. A further increase in the number of local innovations is helping us to capture emerging trends better and faster than ever before, such as our St. Ives facial mists, an on-trend new format and Love Beauty & Planet continued to build scale. Our acquisitions performed strongly – “Dollar Shave Club” rolled out a new ‘full-service model’ designed to make it easier for subscribers to add a full range of grooming products to their monthly regime and Equilibra, the company´s  nutritional supplements brand, which is not yet included in USG, positions the company well to address the trend towards natural health, beauty and wellbeing. Prestige delivered another quarter of double-digit growth and “Schmidt’s” and “Quala”, both now included in USG, grew strongly, helped by their expansion into other personal care categories.

Home Care: double-digit growth in liquids and capsules

Underlying sales grew 6.0%. Fabric solutions and home and hygiene had a strong start whilst fabric sensations grew modestly. The life essentials category was flat. the company´s strategic focus on premium formats in fabric solutions led to double-digit growth in liquids and capsules and we saw good performance from a new range of “Domestos” toilet blocks. Many of their brands benefited from the naturals trend which helped to deliver good performance for “Seventh Generation”, “Sunlight” and our new “Omo” Eco Active range. The company will further address the trend towards naturals with our newest brand “Love, Home & Planet” which launched this quarter. “Blueair“ returned to growth.

 

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