Personal care focus brings positives for Unilever but Group turnover drops in tough conditions

By Andrew MCDOUGALL

- Last updated on GMT

Personal care focus brings positives for Unilever but Group turnover drops in tough conditions
Personal care sales once again led the way for Unilever in its first quarter 2016 results, although turnover saw a 2% decline due to the strength of the euro and company CEO Paul Polman once again highlighted the tough market conditions.

The Anglo-Dutch giant has been veering away the slow-growing food market to focus more on personal care in recent times and turnover the segment reached €4.8 billion for the first quarter with a strong deodorant performance in North America helping boost the figures.

The Personal Care business grew ahead of the group average thanks to its expansion in premium segments, while also seeing the higher growth male grooming segment do well, with the launch of the new Axe range, opening the brand to a broader audience.

As mentioned, deodorants continued to perform strongly, supported by new variants of the successful dry sprays in North America and by the roll-out of Rexona Antibacterial that provides 10x more odour protection into 15 countries.

In hair, TRESemmé launched the Beauty-Full Volume range with a unique reverse conditioning system , while in skin cleansing, Lifebuoy demonstrated strong volume-driven growth across the emerging markets helped by digital and local activation behind Unilever’s handwashing campaign.

‘Fragile consumer demand’

It wasn’t all good news for the company as a whole as it still battles on in tough market conditions. Although underlying sales growth was up 4.7% and underlying volume growth was up 2.6%, turnover declined 2.0% to €12.5 billion including a negative currency impact of 7.1%.

Company CEO Paul Polman commented that the Dove skin care maker is maintaining momentum despite a tougher external environment, but admitted that consumer demand is ‘fragile’.

“With markets remaining volatile, we continue to focus on driving agility and resilience in our business through the key programmes which we set out at the end of last year: net revenue management, zero based budgeting and the next stage in our continued organisational transformation,”​ he said.

“This will position us well to deliver another year of volume-driven growth ahead of our markets, steady improvement in core operating margin and strong cash flow. These underpin sustained long-term value creation for our shareholders.”

The company also added that volume growth slowed further in the markets in which it operates, with market growth weak in emerging markets, negligible in North America and negative in Europe.

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