Unilever’s Q3 sales increase in care, beauty and home sectors despite high inflation

27 Oct 2022 --- Unilever’s latest sales report shows growth acceleration of 10.6% in the third quarter, raising sales guidance for this year to be above 8%. Personal Care underlying sales were up 8.9%, Beauty & Wellbeing grew by 6.7% and the Home Care sector delivered 13.6% underlying sales growth.

Overall, price growth increased to 12.5% in the quarter, with volumes declining by 1.6%. Additionally, turnover increased by 17.8% to €15.8 billion (US$15.9 billion), including a currency impact of 8.8% and a decline of 2.1% from disposals net of acquisitions.

“Unilever has delivered another quarter of growth in challenging macroeconomic conditions,” says Alan Jope, CEO.

“We have delivered growth in each of our five business groups, led by a strong performance from our billion+ Euro brands, growing 14% in the quarter. Strong pricing allows us to continue to drive increased investment behind our brands.”

The company expects to increase spending on branding and marketing, R&D as well as capital expenditure in the second half of 2022.

The billion+ Euro brands, accounting for more than 50% of Unilever turnover, was led by strong performances from OMO, Hellmann’s, Rexona, Magnum and Lux.Personal Care segment contribution
Personal Care underlying sales growth was led by increased pricing and a lower volume decline; contributing 23% to Q3 turnover.

The company highlights that deodorants continued to perform strongly, delivering double-digit pricing and positive volume growth, supported by “continued premiumization and strong innovations, such as the 72-hour protection technology from Rexona.”

The Skin Cleansing category delivered double-digit solid price growth. Lux’s relaunch of its bars in South Asia and the Middle East aided the strong growth. At the same time, the reformulated Dove deep moisture body wash, with microbiome nutrient serum, continued to perform well.

Unilever reports its Oral Care segment achieved high single-digit growth, helped by the relaunch of Pepsodent with increased naturals and efficacy credentials in South-East Asia, Africa and the Middle East.

Hair care, beauty and well being 
Beauty & Wellbeing growth was driven by price with slightly negative volume primarily due to core Skin Care and Hair Care categories. This business group contributed 21% of the Q3 turnover.

The Hair Care division grew high single-digit, driven by Latin America and South Asia, partially offset by modest growth in developed markets and China. In contrast, the Skin Care division increased by a low single-digit, as solid growth in South-East Asia was offset by declines in Europe and North Asia.

Contributing brands like Sunsilk, Clear, Vaseline and Pond’s have been highlighted in the report, along with Prestige Beauty brands Paula’s Choice and Living Proof.

Decline in home sanitization
Unilever’s Home Care sales growth had a volume decline of 3.6%, having taken the highest pricing action given its exposure to input cost increases.

The company reports that its Fabric Cleaning category achieved more than 20% price growth, driven by good performance in India, Brazil, Turkey and Vietnam. Fabric Enhancers grew by double-digits as the category “benefitted from some post-COVID-19 return of consumers in South-East Asia and Turkey.”

While the Comfort division also grew with positive volume aided by a new fragrance and ‘Clothes Care’ technology, the Home & Hygiene category reported a lower volume “in a declining market that reflects a slowdown in disinfecting habits.”Beauty & Wellbeing contributed 21% of the Unilever Q3 turnover.

Dynamic market
Unilever is reporting a 13.3% growth in emerging markets. South Asia continued to grow strongly through both price and volume. Price growth in Latin America increased to 23.2% and China returned to slightly positive growth.

The company said sales growth in South-East Asia benefitted from lapping the prior year’s lockdown effect in some markets.

Meanwhile, developed markets increased by 7.1%, with North America growing by 8.3%, boosted by a strong performance of the Nutrition and Ice Cream division. Ice cream sales also aided in growth in Europe.

“The global macroeconomic outlook remains mixed and we expect the challenges of high inflation to persist in 2023. The delivery of consistent growth remains our first priority,” Jope concludes.

Edited by Radhika Sikaria