Unilever announced its results for the first quarter of 2020, which show flat underlying sales with developed markets growing 2.8% whilst emerging markets declined 1.8%.
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“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,” said CEO Alan Jope.
Underlying sales growth was 0.0% with 0.2% from volume and negative 0.2% from price. Developed markets grew 2.8% whilst emerging markets declined 1.8%. China declined as a result of the downturn in food service, out of home ice cream and retail sales during the lock-down. Growth in India was impacted by both the slowing market and the lock-down implemented at the end of March, which stopped production and shipping for a number of days. Latin America grew 4.9% whilst South East Asia was mixed, following the introduction of strict restrictions in the Philippines. North America and Europe benefitted from household stocking, despite a decline in food service and ice cream. E-commerce grew as shoppers moved from offline to online channels.
Turnover increased 0.2%. There was a positive impact of 0.6% from acquisitions net of disposals and a negative impact of 0.4% from currency.
On 1 April 2020, Hindustan Unilever Limited, Unilever’s listed subsidiary in India, successfully completed the merger with GlaxoSmithKline Consumer Healthcare Limited. The transaction is in line with Unilever’s strategy to evolve the Foods & Refreshment portfolio into higher growth segments. In early April, Unilever also entered into agreements to buy out the minority shareholders of our subsidiary in Malaysia.
Beauty & Personal Care underlying sales grew 0.3%, with volume growth of 0.7% and negative pricing of 0.5%. Growth in key categories was driven by both consumption and household stocking.
Skin care declined, as travel restrictions impacted the Carver portfolio and India was impacted by lock-down conditions. Deodorants grew mid-single digit, with strong performances from Rexona Clinical range and Dove deodorants. Oral care grew, with growth from natural toothpastes and bamboo toothbrushes. Negative pricing was primarily driven by India following price reductions in the previous quarter.
Home Care underlying sales grew 2.4%, with 2.6% from volume and negative price of 0.2%. Foods & Refreshment underlying sales declined 1.7%, with volumes down 1.8% and positive pricing of 0.1%.
The largest volume decline was in ice cream, as the seasonal sell-in for out of home consumption in key markets such as Europe, Turkey and Latin America were heavily impacted by lock-down measures and the reluctance of distributors to commit to buying ice cream stock with an uncertain holiday and tourism season.
“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,” said CEO Alan Jope.