Unilever has announced its results for the first half of 2020, showing that overall underlying sales declined by 0.1%, with developed markets up 2.4% and emerging markets down 1.9%.
The firm said the spread of COVID-19, combined with lockdowns and other related restrictions have led to “significant changes” in the operating environment in its markets. Consumer demands have been impacted by channel closures, more time spent at home and the “critical importance of hygiene”, said the company.
China was the first of its markets to be impacted by the pandemic when it entered lockdown in January. Unilever’s markets in China “slowed significantly” with some recovery after April when the economy reopened.
In most other markets, sales patterns in January and February were ‘normal’ and COVID-19 impacted from March onwards, said the firm. In North America and Europe, there was “positive impact” from household stocking in March. Demand for hygiene and in-home products increased in the second quarter.
“Performance during the first half has shown the true strength of Unilever,” said CEO Alan Jope. “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 to unprecedented fluctuations in demand.
“We have also taken action to strengthen the strategic future of the company by announcing proposals to unify our dual-headed legal structure, progressing the strategic review of our global tea business and making new commitments to help protect the climate and regenerate nature.”
From the start of the COVID-19 crisis, Unilever has worked to protect its people; safeguard supply; respond to new patterns of consumer demand; preserve cash and support communities, added Jope. “Our focus for the rest of 2020 will continue to be volume led competitive growth, absolute profit and cash delivery,” said Jope, “as this is the best way to maximise shareholder value.
“I would like to thank every member of the Unilever team for the outstanding commitment they have shown in the most difficult of circumstances.”
The report showed that as people spent more time at home, the demand for some personal care products decreased, except hygiene products. Unilever saw demand for its home and hygiene products grow in ‘double digits’.
The company’s beauty and personal care underlying sales declined by 0.3%, with volume of growth of 0.1% and negative pricing of 0.4%. Growth was seen in skin cleansing and hand hygiene products. Lockdowns contributed to the reduction of personal care ‘occasions’, leading to lower demand for deodorants and hair care, which each saw volume and price decline. Unilever’s largest brand, Dove, remained resilient, with mid-single digit growth.
Underlying sales in the home care division grew by 3.2% from volume and positive pricing of 0.3%. The firm saw increased demand for household cleaning products, such as Cif surface cleaners. Working with environmental health experts, Domestos also educated customers about targeted cleaning of high-touch surfaces in the home to help prevent the spread of COVID-19.