Unilever reports flat underlying sales amid COVID-19 pandemic

COVID-19 is having an "unprecedented impact" on people and economies across the globe, according to Unilever's CEO Alan Jope.

The consumer goods giant released its Q1 2020 results revealing flat underlying sales with developed markets growing 2.8% while emerging markets declined 1.8%. Unilever said the pandemic has led to 'extensive changes' in the operating environment in its markets, with lockdowns and other restrictions impacting consumer demand patterns and the supply of goods.

Underlying sales growth was 0.0% with 0.2% from volume and -0.2% from price. Developed markets grew 2.8% while emerging markets dropped by 1.8%. The firm said China declined as a result of the downturn in food service and retail sales during the lockdown. Growth in India was impacted by the slowing market and the lockdown implemented in late March, which stopped production and shipping for several days.

Latin America grew 4.9% while South East Asia was mixed, following the implementation of strict restrictions in the Philippines. North America and Europe benefitted from household stockpiling. E-commerce grew as shoppers moved online.

Unilever's beauty and personal care underlying sales grew 0.3%, with volume growth of 0.7% and negative pricing of 0.5%. Growth in key categories was driven by consumption and stockpiling. In the US, products in the hair category grew, however, China and India were impacted by the lockdown. The organisation said deodorants grew in the mid-single digits, with strong performances from its Rexona Clinical range and Dove deodorants.

In the home and hygiene sector, there was increased demand for household cleaning products, such as the firm's Cif surface cleaners and Domestos bleach. In China, Unilever accelerated the launch of its new Botanical Hygiene range, addressing demand for natural cleaning products.

"COVID-19 is having an unprecedented impact on people and economies worldwide," said Jope. "Unilever has moved at speed to support our multiple stakeholders and maintain our operations through the crisis, and prepare for growth in a new normal. We have structured our immediate response into five areas: supporting our people, protecting supply, serving demand, contributing to society and maintaining our financial strength."

In the last quarter, Unilever introduced several measures to support efforts to tackle the pandemic. The organisation contributed €100 million through donations of soap, sanitiser, bleach and food, as well as leveraging its procurement network to acquire medical equipment. The firm also made €500 million of cash flow relief available to its most vulnerable small and medium-sized suppliers and small-scale retail customers whose business relies on Unilever.



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