Unilever reports strong Q3 with Prestige Beauty double-digit growth and e-commerce boom

21 Oct 2021 --- Unilever is reporting strong performance via its third-quarter results, driven by an e-commerce rise of 38% and a double-digit growth for its Prestige Beauty business, which was boosted by the acquisition of Paula’s Choice earlier this year.

“We have delivered a good quarter against strong comparators, with underlying sales growth of 2.5%,” says Unilever CEO Alan Jope.

“The combination of our strategic choices and focus on operational excellence continue to drive competitive growth. Underlying sales growth is now at 4.4% for the year to date and we are confident that we will be well within our multi-year framework of 3-5% for the full year.

The company reports an underlying sales growth of 2.5%, with 4.1% price and (1.5)% volume.

Turnover increased 4.0%, including 1.6% from acquisitions net of disposals and (0.1)% from currency.

Key areas of growth
The company saw satisfactory growth across its three priority markets which include the US, China and India.

Unilever’s growth is fueled by an e-commerce rise of 38% and a double-digit growth for its Prestige Beauty business.Southeast Asia continues to be impacted by COVID-19 and was the main source of volume decline in the quarter, Unilever says.

The significant growth of its e-commerce business now accounts for 12% of its sales.

Along with Prestige Beauty, the company’s new business of Functional Nutrition also grew double-digit.

“Cost inflation remains at strongly elevated levels, and this will continue into next year,” Jope details.

“We have and will continue to respond across our categories and markets, taking appropriate pricing action and implementing a range of productivity measures to offset increased costs. We continue to expect that we will deliver in line with our margin guidance of around flat for the full year.”

Priority markets
According to the company, the operating environment across its markets remains volatile, and restrictions on daily life continue around the world to varying degrees, impacting channel dynamics, sales mix and consumer behavior.

In India, as COVID-19 cases reduced and restrictions eased the operating environment improved. In China, normalization has continued; however, overall, the market remains below pre-COVID-19 levels. Markets are growing in Latin America, driven by price.

North America and Europe markets declined against a high base in the prior year driven by demand for in-home food and hygiene products. Conditions across South East Asia continue to be challenging, with the quarter impacted by lockdown restrictions in the region.

“In the US, our food solutions, functional nutrition and Prestige Beauty businesses all contributed to growth, whilst in-home food and ice cream declined. China grew high single-digit led by volume with broad-based growth across divisions. India grew double-digit as the country continued to recover from Covid-19 related impacts.

Latin America grew high single-digit with strong prices and a small decline in volume. Price increases have been taken in response to rising input costs.

The company reports an underlying sales growth of 2.5%, with 4.1% price and (1.5)% volume.Southeast Asian markets were significantly impacted by rising COVID-19 cases and related restrictions and were the main source of overall volume decline. Europe grew, with the price of 2.1%, although volume declined partly due to a strong prior year comparator in Home Care.

Beauty & Personal Care
The company’s Beauty & Personal Care underlying sales grew 2.6%, with a negative 1.3% from volume and 3.9% from price.

Skincare grew high single-digit, with double-digit growth from its Vaseline brand, and deodorants grew mid-single digit.

“While skin cleansing saw a step up in pricing, underlying sales declined overall as we lapped significantly increased demand in the prior year related to COVID-19,” Unilever reports.

“Haircare grew low single-digit, with mid-single-digit price growth and negative volumes. Our Dove hair therapy innovation in North America, which applies state-of-the-art skincare ingredients to hair, continued to perform well.”

Oral care declined amidst challenging market conditions in South East Asia. The company’s vegan brand Hourglass launched its new customizable, refillable Curator eyeshadow palettes. We increased pricing in response to commodity inflation across categories and regions.

Home Care
Unilever’s Home Care underlying sales grew 1.4%, with negative 3.2% from volume and 4.8% from price.

Within fabric care, fabric cleaning grew low-single digit, with mid-single-digit underlying price growth and negative volumes.

Growth was driven by South Asia and strong price action in Latin America. Volume declined in Europe due to a strong prior year comparator and in South East Asia as Covid-19 restrictions were imposed.

In Brazil, growth was supported by the rollout of our “tougher on stains, kinder to the planet” plant-based innovation under the OMO brand.

Low-single digit growth in fabric enhancers was driven by ongoing market development in South Asia, and the company’s Comfort fragrance boosters continued to perform well in China.

“We lapped high demand for household cleaners during the prior year resulting in a high single-digit decline in home and hygiene, although we continue to trade ahead of pre-pandemic levels.”

“We took pricing action across the portfolio in response to commodity inflation, particularly in Latin America, South Asia and Turkey,” the company concludes.

By Kristiana Lalou

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