Unilever’s sales growth far exceeded expectations in Q3 amid strong demand for Lifebuoy soap and other personal care products, making it the latest consumer goods group to release dynamic numbers in the pandemic.
Underlying sales growth, a key measure for the industry, was 4.4%, well above the 1.3% expected by analysts, while revenue of $ 12.9 billion euros exceeded expectations by 12.7 billion euros.
The hygiene boom has also boosted businesses such as Reckitt Benckiser and Procter & Gamble, both of which improved profit forecasts for the full year this week after increasing production to meet growing demand.
Nestlé, the world’s largest food manufacturer, is also planning solid figures in a full year, citing consumer demand for “trusted” brands.
Graeme Pitkethly, chief financial officer of Unilever, said the company has demonstrated “incredible speed and agility in responding to ever-changing consumer dynamics around the world. . . the stock’s growth masks incredible volatility across channels and geographic areas ”.
Sales of Lifebuoy soap and sanitizers have grown 65% so far this year, Pitkethly said, making Lifebuoy a $ 1 billion brand after the company rolled it out to new markets .
Multinationals have gained ground on smaller players since the outbreak of the coronavirus, but Mr Pitkethly said that may not last. “The biggest brands have benefited because [they] were more available and we have been. . . able to maintain high service levels compared to smaller brands, ”he said.
“We would expect that, as things normalize, to return to a more normal mix on retail shelves.”
Foods sold in stores also flourished: Hellmann’s mayonnaise took advantage of households eating at home, with sales rising from a mid-teens figure and a vegan version now available in 30 countries, a Unilever said. This has helped offset the drop in demand for products like ice cream that are normally purchased outside the home.
Consumers had discontinued products such as deodorants and skin care during lockdowns earlier in the year, but these recovered somewhat in the third quarter, the company said.
Unilever sales fell 0.3% in the second quarter, their first decline in 16 years, as the coronavirus hurt sales and restaurants in emerging markets.
Sales in emerging markets rebounded strongly in the three months to September, growing 5.3% versus 3.1% in developed markets. However, the company did not provide advice for the full year.
The maker of Dove soap, Ben & Jerry’s ice cream and Domestos bleach said it was preparing for the global economic downturn caused by the coronavirus, with dedicated teams to ensure low-budget products are available in different segments and geographies.
“We are already seeing a number of market declines in Southeast Asia, Latin America and India, but not as much in a few other major markets like Turkey and China,” Pitkethly said. Price promotions have intensified in Europe, he added.
Under Alan Jope, who took over as chief executive last year, Unilever sought to unify its bicellular structure into a single UK-based entity to facilitate divestitures and acquisitions.
This move was approved by shareholders of its Dutch and UK entities, with the change expected to be completed on November 29. But political support is growing in the Netherlands for a law to hit multinationals leaving the country with billions of dollars. exit taxes, which could further sabotage the plan.
Unilever said it will move forward “provided that unification, in the opinion of the boards, remains in the best interests of Unilever, its shareholders and other stakeholders as a whole. “.
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