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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Unilever PLC    ULVR   GB00B10RZP78

UNILEVER PLC

(ULVR)
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Virus Outbreak Alters American Shopping Lists -- WSJ

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04/24/2020 | 02:48am EDT

By Saabira Chaudhuri and Sharon Terlep

Consumers are cooking and cleaning more while spending less time and money on grooming and makeup, consumer-products companies say, as a picture emerges of how the coronavirus is reshaping lifestyles.

The question now is which behaviors will stick and which will fade when restrictions to fight the pandemic are lifted.

"People we know will continue to wash their hands more. Probably they'll have more concern for surface hygiene in homes," said Unilever PLC Chief Executive Alan Jope on Thursday. "That whole hygiene thing will carry on."

Procter & Gamble Co. last week said Americans were doing more laundry loads every week, washing garments after each wearing. The company also reported higher demand for disposable cleaning products like paper towels and plastic wipes rather than sponges or cloths.

P&G Chief Financial Officer Jon R. Moeller flagged what he said "will likely become a forever altered health, hygiene and cleaning focus" for shoppers in the U.S. "There may be an increased focus on home, more time at home, more meals at home, more cleaning at homes."

Unilever, the maker of Dove soap and Ben & Jerry's ice cream, offered a broad look in its results Thursday at how the pandemic is affecting consumers around the world as they are told to stay home and work remotely if possible.

Chief Financial Officer Graeme Pitkethly said people are using personal-care products such as shampoo and deodorant less, estimating 11 fewer uses in a typical week.

Makeup giant L'Oréal last week said the global cosmetics market was down 8% in the first quarter as consumers pull back on skin care and beauty products.

On the flip side, people are cooking more at home, buoying demand for brands such as Knorr soup cubes, Hellmann's mayonnaise and Pot Noodle instant noodles, Unilever said.

"We underestimated initially the positive impact this would have on our business for at-home cooking," said Mr. Jope. "Those center-of-the-grocery-store businesses that have been a bit flat for many years, all of those are seeing a rejuvenation."

Spending time at home has driven up demand for toilet paper, propelling Cottonelle owner Kimberly Clark Corp. to start repurposing its manufacturing capacity to make more of the softer, thicker toilet paper used at home versus what is typically used in offices.

One change seen as likely to be long-lasting is the shift to online shopping. Online sales -- which make up about 6% to 7% of Unilever's business -- grew 36% in the quarter, as consumers under lockdown ordered more via the internet. Unilever said it plans to ramp up investments in selling directly to consumers.

"I think we will be able to look back and see this as a point of inflection for online grocery shopping," said Mr. Jope.

Target Corp. said traffic to stores had slowed considerably as states imposed lockdown orders, with consumers shifting to online buying. Target has seen strong sales of food, household goods and, more recently, office supplies and cooking appliances, while sales of apparel and accessories have fallen.

Longer-term, shoppers will "embrace routines developed during these weeks at home with their families," said Target Chief Executive Brian Cornell. Target's model of using stores as online delivery and pickup hubs "will continue to serve us well," he said.

Domino's Pizza Inc. on Thursday reported a rise in U.S. sales in recent weeks as consumers ordered pizza to eat at home rather than go out. Last month, it said it would hire more than 10,000 workers to meet rising demand amid the pandemic.

Lockdowns have forced restaurants to close in many countries. That has hurt sales for Unilever's food-services arm, which sells ingredients to restaurants, and executives at the company signaled they think sales could be slow to return.

In China, 70% of closed restaurants have reopened but are running at between 50% and 70% capacity because of social-distancing protocols, said Mr. Pitkethly. He signaled some form of social distancing would likely remain in place through the end of the year in many countries, which would continue to cap sales.

Another shift has been the decline in ice cream sales at parks, beaches and other locations that aren't grocery stores. These make up 40% of Unilever's ice cream business, the world's largest, with EUR6 billion ($6.5 billion) of annual sales. The company reported a 1.7% drop in underlying sales for its food-and-refreshments unit. It is ramping up partnerships with food-delivery companies to allow consumers to order ice cream along with their takeout.

Evian owner Danone SA on Thursday said its bottled water sales for the quarter had dropped 7.4% as it, too, was hurt by similar closures.

Overall, Unilever said sales for the first three months of the year were flat, at EUR12.4 billion.

Unilever's performance contrasts with that of P&G, which last week reported organic sales growth of 6% as stockpiling of laundry detergent, toilet paper and other essentials in the U.S. more than offset a slump in China.

What companies sell and where they sell it explains some of that diversion in performance. Unilever sells food, while the others don't. It also makes most of its sales from emerging markets where consumers haven't stockpiled like they have in the West.

Unilever reported strong sales in North America, with underlying growth of 4.8%, driven by stockpiling.

"People have got bigger houses, bigger pantries, everything's bigger in the States, and they certainly went for household stocking in the biggest way around the world," said Mr. Pitkethly.

"There is no such thing yet as a new normal," said Mr. Jope. "Businesses and commentators who have professed too much wisdom and insight on what the world will look like on the other side of coronavirus have come to eat humble pie."

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com and Sharon Terlep at sharon.terlep@wsj.com

 

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LINE CORPORATION 0.36% 5590 End-of-day quote.4.49%
NEXT PLC 1.08% 4850 Delayed Quote.-31.63%
PROCTER & GAMBLE COMPANY 0.62% 121.63 Delayed Quote.-3.22%
RISE, INC. 6.45% 33 End-of-day quote.10.00%
SHIFT, INC. 1.32% 10750 End-of-day quote.34.71%
THE GLOBAL LTD. 2.87% 215 End-of-day quote.-54.35%
THE NEW HOME COMPANY INC. 4.06% 3.33 Delayed Quote.-31.33%
UNILEVER N.V. 0.42% 47.56 Delayed Quote.-7.55%
UNILEVER PLC 0.79% 4352 Delayed Quote.-0.75%
WORLD CO., LTD. 6.68% 1596 End-of-day quote.-40.69%
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Financials
Sales 2020 50 804 M 57 455 M 57 455 M
Net income 2020 5 981 M 6 764 M 6 764 M
Net Debt 2020 23 140 M 26 170 M 26 170 M
P/E ratio 2020 21,2x
Yield 2020 3,50%
Capitalization 124 B 140 B 140 B
EV / Sales 2019
EV / Sales 2020 2,90x
Nbr of Employees 149 867
Free-Float 55,7%
Chart UNILEVER PLC
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Technical analysis trends UNILEVER PLC
Short TermMid-TermLong Term
TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
Sell
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Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 51,14 €
Last Close Price 47,56 €
Spread / Highest target 25,5%
Spread / Average Target 7,53%
Spread / Lowest Target -28,5%
EPS Revisions
Managers
NameTitle
Alan Jope Chief Executive Officer & Executive Director
Nils Smedegaard Andersen Chairman
Nitin Paranjpe Chief Operating Officer
Graeme David Pitkethly Chief Financial Officer & Executive Director
Richard Slater Chief Research & Development Officer
Sector and Competitors
1st jan.Capitalization (M$)
UNILEVER PLC-0.75%139 820
PROCTER & GAMBLE COMPANY-3.22%299 256
UNILEVER N.V.-7.55%139 820
THE ESTÉE LAUDER COMPANIES INC.-7.23%68 979
HINDUSTAN UNILEVER LIMITED12.41%68 333
RECKITT BENCKISER GROUP PLC21.49%66 013