Unilever reports strong 2020 results boosted by hygiene products

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Unilever has reported strong full-year results for 2020, demonstrating its ‘resilience’ and ‘agility’ during the pandemic, with results boosted by hygiene products.

For the full year, Unilever grew underlying sales by 1.9%, with volumes growing 1.6% and 0.3% from price. In Q4, underlying sales growth was 3.5%, with volumes of 3.3% and 0.2% from price.

Growth was driven by hand and home hygiene products, laundry, and in-home food and refreshments. As people stayed at home and fewer opportunities to socialise, they spent less time on personal grooming, which impacted sales in much of Unilever’s beauty and personal care business, except for hygiene products, where demand was high.

Category demand patterns varied throughout the year and by market, driven by the differing status of lockdown restrictions. E-commerce grew by 6.1%, as the company captured demand in online channels, and is now 9% of Unilever.

Beauty and personal care underlying sales grew 1.2% driven by volume, with flat price. Skin cleansing saw mid-teens volume-led growth for the year, driven by the ‘important role’ of hand hygiene in combatting the spread of COVID-19. The firm’s Lifebuoy hygiene brand grew by more than 50%.

Lockdowns and restricted living in its markets led to lower demand for skincare, deodorants, and haircare, which each saw volume and price declines, most significantly in Q2. Skincare declined high-single-digit and deodorants declined mid-single digits. In haircare, growth in wash and care partially offset a decline in styling products, leading to a low-single-digit decline overall.

Home care underlying sales grew 4.5%, with 5.1% from volume and negative pricing of 0.6%. Unilever’s home and hygiene brands delivered high-teens volume-led underlying sales growth. Demand for products with germ-killing and antibacterial benefits has been elevated throughout the year. Domestos grew over 25% as the company launched the brand in China and introduced spray and wipe formats.

“In a volatile and unpredictable year, we have demonstrated Unilever’s resilience and agility through the COVID-19 pandemic,” said Unilever CEO Alan Jope.

“I would like to thank the Unilever team, whose dedication and hard work has delivered a strong set of results under the most difficult of circumstances.

“Early in the year, we refocused the business on competitive growth, and the delivery of profit and cash as the best way to maximise value. We have delivered a step change in operational excellence through our focus on the fundamentals of growth. As a result, we are winning market share in over 60% of our business in the last quarter, on the basis of measurable markets. The business also generated underlying operating profit of €9.4 billion and free cash flow of €7.7 billion, an increase of €1.5 billion.

“We progressed our strategic agenda, building on our existing sustainability commitments with ambitious new targets and actions, most recently with our plans to help build a more equitable and inclusive society.

“We completed the unifaction of our legal structure under a single parent company and we continue to work on separating out the tea business as we evolve our portfolio.

“Today, we are setting out our plans to drive long-term growth through the strategic choices we are making and outlining our multi-year financial framework. While volatility and unpredictability will continue throughout 2021, we begin the year in good shape and are confident in our ability to adapt to a rapidly-changing environment.”

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