LONDON – Currency headwinds dented growth at Unilever, parent of brands ranging from Dove and Vaseline to Lipton and Magnum, in the third quarter, the industry giant said in a trading update on Thursday.
Turnover fell 1.6 percent to 13.2 billion euros in the three months ended Sept. 30. Stripping out the spreads business which, as reported in April, Unilever plans to sell or demerge, growth in the quarter dipped 1.5 percent to 12.5 billion euros.
Underlying sales growth was 2.6 percent in the period and 2.8 percent, excluding the spreads division, a mature business that has been flat for months.
Turnover in the personal care division rose 1.8 percent on an underlying basis to 5 billion euros and, within that, prestige performed well, driven by Dermalogica and Kate Somerville. The subscriber base of Dollar Shave Club expanded further, enabling another quarter of double-digit growth, Unilever said.
“The transformation of Unilever into a more resilient, more competitive and more profitable business continues, and we are making good progress against the strategic objectives we have set out for 2020,” said Paul Polman, chief executive officer of the company.
“While conditions in our developed markets remain challenging, we are starting to see signs of improvement in some of our biggest emerging markets including India and China. Growth in the third quarter was adversely affected by poorer weather in Europe compared with last year and natural disasters in the Americas,” he added.
Polman said that for the full year, the company expects to see underlying sales growth of 3 percent to 5 percent, and an improvement in underlying operating margin.
Unilever said its personal care division showed improved volumes, although price growth was moderated by easing commodity cost increases, leading to lower underlying sales growth in the third quarter.
“We continued to grow the core with a strong set of new product launches while expanding the portfolio in higher-growth segments,” Unilever said, adding that growth in skin cleansing was supported by Dove shower foam, a new format that Unilever said delivers an improved sensory experience.
During the period Baby Dove was introduced to 26 markets, while Hijab Fresh, a new brand, was launched in Indonesia and targeted at the Muslim consumer. In hair care, growth was driven by Sunsilk.