‘Bright future’ hope: Unilever unveils Elida Beauty carve-out amid Q1 2021 net sales dip
The announcement came as the company reported a minor dip in overall net sales for the first quarter (Q1) of 2021 – down 0.9% at €12.3bn. Unilever’s largest division beauty and personal care generated €5bn, down 5% on the previous year, and its home care division also saw net sales drop 4.2% for the quarter. Foods and refreshment, however, grew – up 6% on the previous year.
Globally, European turnover was down 3.2%, driven in part by lower demand for personal care products amidst ongoing lockdowns in markets like the UK and Germany. Turnover in the Americas was also down 6% because of continued weak demand in beauty and personal care.
Despite this, Unilever’s total underlying sales growth [turnover growth excluding acquisitions, disposals, changes in currency and price growth] was up 5.7% and up 2.3% for beauty and personal care. Alan Jope, CEO of Unilever, described the results as a “good start to the year”.
Unilever names beauty carve-out ‘Elida Beauty’ and outlines ‘bright future’ hope
Jope said prestige beauty and functional nutrition had performed particularly well in Q1 – prestige beauty grew double digits alone – and moving forward, Unilever would remain focused on “driving the evolution” of these segments and other parts of the business.
He said this was already evident as Unilever made “good progress in creating a new unit, Elida Beauty, comprising a number of our smaller beauty and personal care brands”.
The CEO said Elida Beauty was made up of brands predominantly sold in Europe and North America – each with "great brand equity", including Q-Tips, TIGI, Timotei and Impulse, that together generated revenues of around €600m in 2020. TIGI recently revamped its flagship Bed Head brand in a bid to remain relevant to changing consumer needs.
The separation and regrouping of these brands, Jope said, would create a space where they would “benefit from dedicated management focus as we explore different options for value creation from this standalone business”.
Jope had previously suggested divestment could be considered as an option but gave little away on today’s call. Responding to an analyst’s question about whether more brands would be added to Elida Beauty and what the future might hold for this newly separated business unit, the CEO said: “At the moment, the perimeter is fixed: we’ve agreed which brands are in or out and we’re not looking to drip other brands in their over time. We’ve done the review; we’ve made the decision. It’s now a standalone group and we’re looking at what the best way is to build a bright future for that portfolio.”