Unilever reports “solid” Q3 but takes a hit from currency effects, beauty is strong

Unilever’s Q3 trading statement on Thursday was all about “solid results” at the giant Anglo-Dutch consumer products giant, although it was hit hard by negative currency effects.

For the entire group, turnover was €15.2 billion, which meant underlying sales growth (USG) of 5.2%, although turnover on a reported basis was down 3.8%. 

In the giant Beauty & Well-being division, turnover was €3.1 billion, a 4.9% fall on a reported basis, but a 7.4% USG increase. And the even bigger Personal Care division saw turnover of €3.6 billion, which was down 2.2% as reported but up 8% USG. 

The company, which has been steadily increasing the prices of its popular brands said that of the 5.2% underlying sales growth, 5.8% was down to higher prices, with that figure pulled back slightly by a 0.6% volume decline.

It added that underlying price growth continues to moderate as inflation eases with underlying volumes now positive in both Beauty & Well-being and Personal Care.

But what about that overall turnover decline on a reported basis? The company said that 8% of the drop came from negative currency effects and 0.6% from disposals, net of acquisitions. 

Yet the company’s billion-plus-euro brands, which account for 56% of its total turnover, delivered underlying sales growth of 7.2% with 1.4% of that accounted for by volume growth, which is good news as these brands need to see their volumes expanding. The Dove brand and Sunsilk were among the leading brands with strong performances. 

Looking back at specific divisional performance, as we said, Beauty and Wellbeing delivered 7.4% USG. That came with a balance of price and volume growth, with Prestige Beauty and Health & Wellbeing continuing to grow strongly. 

Personal Care’s 8% growth divided into 4% from price and 3.9% from volume driven by double-digit growth from Deodorants. 

Emerging markets grew underlying sales by 8.3% with volume growth improving to 2.6% and price growth of 5.6%. Latin America delivered USG of 14% with volumes improving further at 6.2% growth while price growth slowed to 7.4%. 

South Asia grew in mid-single-digits with price growth slowing as it reduced prices in Skin Cleansing and Fabric Cleaning. The Chinese market is recovering more slowly than expected and sales declined mid-single-digits while South East Asia grew in low-single-digits.

Developed markets grew 0.8%, driven by price growth of 6.3% with a volume decline of 5.2%. North America and Europe grew in low-single-digits, driven by price.