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Unilever reports sales growth in “challenging input cost environment”

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Unilever has reported underlying sales growth of 7.3% in a “very challenging input cost environment”.

The company’s turnover increased by 11.8%, including a currency impact of 3.5%. Price stepped up further from the levels seen in Q4 2021, with some negative impact on volume, most notably in Home Care, which took the strongest pricing action.

Unilever’s Beauty and Personal Care segment grew 7.1% in the quarter. Deodorants posted high single-digit growth, helped by technology-driven innovations behind Dove and Rexona, as well as Axe making a strong start to the year. Hair posted mid-single-digit growth driven by both styling and wash and care.

Sunsilk and TRESemme contributed strongly with price-led growth while Suave declined. Skin cleansing delivered high single-digit growth with Dove, Lux, and Lifebuoy performing well, but volumes declined in a contracting market.

“We are executing well in a very challenging input cost environment,” said Unilever’s CEO, Alan Jope.

“Underlying sales growth of 7.3% was driven by strong pricing, with a limited impact on volume in the quarter. This performance was delivered against the backdrop of significant rises in input costs that have further accelerated through the first three months of the year, and the human tragedy of the war in Ukraine.

“The delivery of another solid quarter of sales growth builds on the improved growth momentum that we achieved in 2021 and is underpinned by Unilever’s increased focus on operational excellence as well as disciplined adherence to our chosen strategic priorities.

“We are maintaining strong investment in our top brands, growing our €13 billion+ brands by 8.8% in the quarter. E-commerce sales now represent 14% of turnover following another quarter of strong double-digit growth.

“There is more to do as we navigate our business through unprecedented cost inflation, but we are making good progress. We are committed to sustaining this step-up in our growth and competitiveness.”

Unilever said it expects input cost inflation of around €2.1 billion in the first half of the year, but the war in Ukraine and the related increase in raw material inflation have raised its cost forecast for the second half of the year. It currently expects input cost inflation for H2 to be around €2.7 billion.

The company added: “This period of unprecedented inflation requires us to take further pricing action with some impact on volume as a result. We now expect underlying sales growth in 2022 to be towards the top end of the previously guided range of 4.5-6.5%.

“We will ensure that we protect the health of our brands as we continue to invest competitively in marketing, R&D and capital expenditure.”

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