Unilever sees double-digit turnover increase but warns of tough times ahead

19-Jan-2016 - Last updated on 19-Jan-2016 at 09:47 GMT

The Anglo-Dutch consumer goods giant recorded double-digit growth in turnover in its full year 2015 results with innovations in the Personal Care business driving the segments improvement, but company CEO Paul Polman has warned 2016 will be tough thanks to market volatility.

In its results, Unilever revealed that turnover increased by 10% to €53.3 billion, including a positive currency impact of 5.9%; while underlying sales growth was 4.1%, ahead of its markets, with volume up 2.1% and price up 1.9%.

While the company is pleased to have grown ahead of its markets in such a challenging year, with slower global economic growth, intensifying geopolitical instability, and high currency and commodity volatility, CEO Polman says it will not get carried away.

“These results further demonstrate the progress we have made in transforming Unilever into a more resilient company, capable of consistently delivering competitive underlying sales growth, margin expansion and strong cash flow,” he says.

The Unilever boss adds that the consistency of performance shows that the firm’s focus to build its company for the long term is paying off, but that it remains cautious.

“We are preparing ourselves for tougher market conditions and high volatility in 2016. Therefore it is vital that we drive agility and cost discipline across our business,” he says.

Personal Care improvement

The Dove skin care maker’s 2015 results are set against the context of challenging market conditions and fragile consumer demand, and many emerging markets have continued to be weak, particularly those dependent on oil and other commodity exports and those where currency devaluation is pushing up the cost of living.

However, growth in Personal Care has improved from the slower growth of the previous year, and this was driven by innovations within its core brands and the decision to extend into more premium segments.

“We are starting to see the results from sharpened category strategies that guide increased investment in our brands, our infrastructure and our people as well as extensions into attractive new markets like Prestige Personal Care,” says Polman.

Thanks to the acquisitions of Dermalogica, Murad, Kate Somerville and REN in the first half of 2015, Unilever has been able to establish its Prestige business, particularly in skin care.

Deodorants benefited from the launch of dry sprays in North America and compressed formats in Latin America.

In hair, growth was driven by the Dove Advanced Hair Series roll-out and the launch of Lux Luminique in Japan.

And the improved Dove body wash formulation, focusing on a better sensorial experience, performed well in skin and is now present in over 30 countries.