Unilever is removing the word "normal" from its beauty and personal care packaging and advertising.

LONDON — Unilever made strides in the first quarter of 2021 with underlying sales growing 5.7 percent to 12.3 billion euros, and the spinoff of its smaller beauty assets underway.

The parent of brands ranging from Dove, Pond’s and Kate Somerville to Magnum and Ben & Jerry’s said Thursday that actual growth in the three months to March 31 was down 0.9 percent, due chiefly to currency headwinds.

Unilever’s shares on the London Stock Exchange closed up 3.4 percent at 42.14 pounds on Thursday.

Unilever’s Beauty and Personal Care division accounted for just under half of overall sales, rising 2.3 percent in underlying terms to 5 billion euros in the period. Skin cleansing, and skin and hair care all grew by a mid-single digit, while deodorants declined in the high-single digits as the market was impacted by fewer people leaving their homes to go to work, or for social occasions.

Unilever said its Prestige business grew in the “strong double digits,” helped by the gradual restocking and reopening of brick-and-mortar stores in the U.S. The company noted that Hourglass launched a red lipstick formulated with a patent-pending pigment produced from crushed beetles, a centuries-old technique.

The company also confirmed that the spinoff of its smaller beauty and personal care brands is underway. The brands, which are predominantly sold in Europe and North America, will operate under the name Elida Beauty “and will benefit from dedicated management focus,” Unilever said.

The brands in the group are Q-tips, Caress, Tigi, Timotei, Impulse and MonSavon, and together generated revenues of 600 million euros in 2020. Earlier this year, Unilever had flagged its plans to shift the brands and to focus on its bigger beauty and prestige names, as well as on vitamins and nutrition.

In fiscal 2021, the company said it expects to deliver underlying sales growth within its multiyear framework of 3 percent to 5 percent, with the first half of 2021 “around the top” of this range.

It expects underlying operating margin to increase “slightly” in the full year, following a decline in the first half that was driven by a number of factors.

Unilever said COVID-19 continues to cause “additional supply chain costs and a negative margin mix,” and noted that commodity and freight costs have increased further, while marketing spend will also be higher than in the corresponding period last year when the pandemic had forced much of the world into lockdown.

Unilever said the operating environment remains “volatile” across the company’s broad geographic footprint, and that fluctuating COVID-19 case levels and markets entering and exiting lockdowns “continue to impact consumer behavior and channel dynamics.”

The company noted that strong demand in North America and Europe for in-home food has continued, while consumer activity in beauty and personal care categories has remained “subdued.”

Unilever continues to push ahead in the underperforming deodorant category. Earlier this week, the consumer giant said Rexona deodorant — also known as Sure and Degree — has launched a new beta program to develop an inclusive deodorant for people with visual impairment and upper limb motor disabilities.

The Sure brand is working with 200 individuals in the U.S., alongside design experts from Wunderman Thompson, to trial a new prototype design called Sure Inclusive. The new designs look to eliminate the challenges of twisting a deodorant cap, turning a stick or pushing down on a spray can with limited arm mobility.

The deodorants have features such as a hooked design for one-handed usage, magnetic closures, enhanced grip placement for easier application and a larger roll-on applicator. The products also come with a braille label for those with visual impairment.

Unilever said conditions in China are “normalizing,” while economic activity in India increased in the first quarter, although parts of the country are now newly locked down as a result of sharply rising COVID-19 cases. Markets grew in Latin America in the first quarter, despite macroeconomic conditions remaining volatile and conditions in Southeast Asia remain “challenging.”

Pierre Tegnér, sell-side analyst at Oddo BHF, said in a flash report following the publication of the results that vitamin sales are “skyrocketing,” with 54 percent growth in the period as they start to build scale, while e-commerce climbed 66 percent in the period and now represents 11 percent of sales.

He said the company now has 36 data centers providing data and consumer insights on top of 46 existing marketing hubs. Unilever has also been running millions of one-to-one interviews with consumers each year to get feedback, said Tegnér, who put an “overperform” rating on the stock. 

Unilever added that it’s planning a share buyback program of up to 3 billion euros in May, in one or more tranches, to be completed by the end of the year. The company said the buyback plan reflects its “strong” cash flow delivery and balance sheet position and is in line with its capital allocation framework.

Alan Jope, Unilever’s chief executive officer, said the company had made a good start to the year and would continue to focus on its Prestige Beauty and Functional Nutrition divisions.

“We are committed to delivering superior long-term financial performance through our sustainable business model, which we believe has never been more relevant than it is today,” Jope said.

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