Unilever has recorded underlying sales growth of 2.5% in its third-quarter results and reported strong cost inflation levels.
The owner of Ben & Jerry’s, Marmite and Hellmann’s reported turnover of €13.5 billion in Q3, an increase of 4% on the previous year. The company reported turnover of €39.3 billion for its first nine months.
Unilever continues to predict delivery in line with its margin guidance of “around flat” for the full year and plans on taking pricing measures and implementing a range of productivity steps to balance increased costs.
Global markets continue to be unpredictable with the ongoing Covid-19 pandemic and varying restrictions are having a direct impact on sales, channel dynamics and consumer behaviours.
In Unilever’s third quarter, the company’s foods and refreshment unit expanded its underlying sales by 3% and recorded turnover of €5.1 billion, ahead of beauty and personal care (up 2.6%) and home care (up 1.4%).
Following a strategic review announced last year, Unilever completed the operational separation of its tea business at the beginning of this month. The company is now “focused on the next stage” for the business which is expected to be either an IPO, sale or partnership.
In the third quarter of the year, Unilever’s ecommerce channel grew by 38% and now represents 12% of sales.
In the US, the company’s food solutions and functional nutrition businesses both contributed to growth, while in-home food and ice cream declined.
Out-of-home ice cream grew in Asia and Europe as countries re-opened, although turnover in Europe has not yet been restored to 2019 levels. Comparatively, in-home ice cream declined, as the company lapped strong growth in the year-ago period.
Meanwhile, the demand for in-home food has remained strong but sales were slightly down due to strong growth in the year-ago period. Unilever stated that it has continued to take pricing action across foods and ice cream in response to commodity inflation.
Underlying sales expanded across Unilever’s Asia/AMET/RUB, Americas and Europe sectors in its third quarter, by 2.3%, 4.4% and 0.3%.
The Southeast Asian markets declined in Q3 due to the imposition of Covid-19 restrictions following high case rates.
In Europe, Italy saw growth in part driven by its performance in ice cream after a decline the previous year, while the Netherlands also grew, with foods delivering mid-single-digit growth.
Meanwhile, the Americas saw Mexico and Argentina grow both price and volume. North America saw a decline in volumes in comparison with the high demand for in-home food products the prior year.
Unilever CEO, Alan Jope, said: “We have delivered a good quarter against strong comparators, with underlying sales growth of 2.5%”.
He continued: “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 multiyear framework of 3-5% for the full year”.
© FoodBev Media Ltd 2024
