Dove Baby

LONDON — Unilever’s sales edged up 0.2 percent to 12.4 billion euros in the first quarter, with demand for food staples and household products robust and ice cream losing its appeal as the coronavirus spread through its major markets.

There was no underlying sales growth in the three months to March 31.

The parent of brands including Dove, Vaseline, Magnum and Ben & Jerry’s said Thursday it had withdrawn its previous growth and margin outlook for 2020, and was working to support consumers, staff and suppliers as COVID-19 lockdown measures devastate economies around the world.

The company said it has made donations of soap, sanitizer, bleach and food worth 100 million euros, and leveraged its procurement network to acquire medical equipment for organizations around the world. It has also made available 500 million euros of cash-flow relief for its “most vulnerable” small- and medium-sized suppliers, and small retail customers whose businesses rely on Unilever.

Chief executive officer Alan Jope pointed out that the company has a strong balance sheet and cash position, and plans to pay out dividends, as usual, in June, September and December.

He said demand patterns are changing, with “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.”

Jope said Unilever was adapting to the new demand patterns and preparing for “lasting changes in consumer behavior” in each country as trends shift from crisis to recovery. He also stopped short of giving any kind of outlook, citing the “unknown severity and duration of the pandemic, as well as the containment measures that may be adopted in each country.”

Unilever also said that in the first two months of the year, most major markets outside China saw normal patterns of consumption, with COVID-19 impacting in March. Developed markets grew 2.8 percent while emerging markets declined 1.8 percent.

Underlying sales in the beauty and personal care division were up 0.3 percent with skin-cleansing products, such as Lifebuoy soap, among the most in demand. Vaseline and oral-care products, such as natural toothpastes and bamboo toothbrushes, also performed well.

Unilever said its prestige portfolio was impacted by the health and beauty channel closures in many markets, while hair care grew in the U.S.

Household cleaning brands Domestos, Cif and Seventh Generation grew 2.4 percent in the three months to March 31, as did food ingredients such as Hellmann’s mayonnaise and Knorr stock cubes as consumers were forced to cook at home. Unilever said the strategic review of its tea business is ongoing. As reported, the company is looking to sell that division, similar to what it did with spreads.

Jope said, overall, Unilever was well-positioned to trade through the crisis and confront “the changing world” that will emerge when COVID-19 abates. “We remain focused on delivering superior long-term financial performance through our sustainable business model.”

load comments
blog comments powered by Disqus