‘True strength of Unilever’: Hygiene helps fuel H1 10% net earnings rise
The European-headquartered consumer goods giant totted up net sales of €25.7bn for the first half (H1) of 2020, down 1.6% on the previous year. Total net sales in Europe were down 1.8%; up 5% in the Americas; and down 2.7% in Asia, Africa, Middle East, Turkey, Russia, Ukraine and Belarus.
Total net income for H1 across the business, however, sat at €3.5bn – up 10% on the previous year.
“Performance during the first half has shown the true strength of Unilever,” said Alan Jope, CEO of Unilever. “We have demonstrated the resilience of the business – in our portfolio, in a continued step-up in operational excellence, and in our financial position – and we have unlocked new levels of agility in responding for unprecedented fluctuations in demand.”
Skin cleansing remains strong in beauty and personal care
Unilever’s largest division – beauty and personal care – generated €10.6bn in net sales for H1, down 0.3% on the previous year. Net earnings across the division was split with €7bn for personal care; €0.3bn for prestige and a total of €4bn for hygiene, a part of which sat in Unilever’s home care division. For the second quarter (Q2), net sales were down 0.9% across the division at €5.3bn.
Overall business across personal care and beauty declined, except for hygiene products. And within the division, skin cleansing stayed strong with volumes driven by response to “the critical need for hand hygiene to prevent the spread of COVID-19”.
Q2 underlying sales growth for skin cleansing was up 27%, fuelled by a significant rise in sanitisers and liquid handwash, but underlying sales growth declined 10% across the rest of the beauty and personal care business. Unilever said its rollout of Lifebuoy across 50 global markets during H1 significantly increased its capacity in hand sanitisers
Skin care, deodorants and hair care each suffered amid nationwide lockdowns worldwide creating “reduced personal care occasions amidst restricted living”, the company said, and its prestige brands were also negatively impacted by closures across healthy and beauty channels worldwide.
Unilever’s largest beauty and personal care brand Dove “remained resilient” and demand for consumer oral care “remained robust”.
A ‘strategic future’ through unification
Jope said Unilever’s move to unify its dual-headed legal structure – announced last month – also signalled a move to “strengthen the strategic future of the company”.
Following 18 months of review, the company announced it would transition to a unified, single parent company structure with business registered in London. The plan remained subject to shareholder and regulatory approvals, though Unilever said it had received “widespread support” for the principle two years prior.
Jope said that Unilever would also continue portfolio evolution and investments in sustainability.
“From the start of the COVID-19 crisis, we have been guided by clear priorities in line with our multi-stakeholder business model to protect our people, safeguard supply, respond to new patterns of consumer demand, preserve cash, and support our communities. Our focus for the rest of 2020 will continue to be volume led competitive growth, absolute profit and cash delivery as this is the best way to maximise shareholder value,” he said.
Unilever's first quarter (Q1) 2020 financial results held steady with flat sales, though beauty and personal care net earnings rose by almost 2%.
