Unilever reports Q3 net sales dip as outlook remains ‘unpredictable’

By Kacey Culliney

- Last updated on GMT

Unilever did, however, report underlying sales growth during the quarter as hand hygiene and skin cleansing demands remained high (Getty Images)
Unilever did, however, report underlying sales growth during the quarter as hand hygiene and skin cleansing demands remained high (Getty Images)

Related tags Unilever financial results Hygiene skin cleansing Skin care Personal care Dove Lifebuoy

Personal care major Unilever has reported a net earnings dip for the third quarter of 2020 despite signs of volume-led growth across the business, particularly in skin cleansing.

The European-headquartered consumer goods giant totted up net sales of €12.9bn for the third quarter (Q3) of 2020, down 2.4% on the previous year. Total net sales were down 1.3% in Europe versus 2019; down 1.3% in Asia, Africa, Middle East, Turkey, Russia, Ukraine and Belarus; and down 4.9% in the Americas.

“COVID-19 continues to influence consumer behaviours and channel dynamics in our markets,”​ Unilever said. However, the company noted that total underlying sales growth from the start to end of Q3 was up 4.4% – 3.9% of which was volume based.

Volume-led growth focus amid ‘unpredictable’ future

Alan Jope, CEO of Unilever, said the company had delivered a “strong performance”​ overall, with “volume-led growth” ​proving the company’s resilience to rapidly changing dynamics across consumer segments, geographies and channels.

“The environment we are operating in will remain unpredictable in the near term, so we will continue to maintain the speed and agility of our response. Our focus remains volume-led competitive growth, delivering absolute profit and free cash flow,”​ Jope said.

Beauty and personal care down versus 2019

Unilever’s largest division – beauty and personal care – generated €5.3bn in net sales for Q3, down 4.1% on the previous year, though underlying sales during the quarter growth grew 3.8%. Growth in the division had been fuelled by the entry of Dove into the antibacterial segment and extension of Lifebuoy into new formats and channels across several European markets.

“Demand for hand hygiene products remained high, albeit slightly below levels seen in the second quarter, and skin cleansing delivered underlying sales growth of 19.9%,” ​Unilever said.

The skin care and deodorant categories both declined, “negatively impacted by restricted living conditions”,​ the company said, but prestige business grew overall as health and beauty channels reopened.

Unification plans strongly supported by shareholders

Back in June, Unilever announced plans to simplify its dual-headed legal structure​ – proposals that it said had received strong support from both NV and PLUC shareholders during Q3. Plans on how this would continue to proceed would be communicated in the short-term, it said.

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