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    ULVR   GB00B10RZP78

UNILEVER PLC

(ULVR)
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Unilever : A good quarter against strong comparators

10/22/2021 | 04:28am EST

We announced our results for the third quarter of 2021 with underlying sales growth of 2.5%. 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.

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

Quarterly shareholder dividend of EUR0.4268 per share, ongoing share buyback programme of EUR3 billion to be completed by the end of the year

Statement from CEO Alan Jope

'We have delivered a good quarter against strong comparators, with underlying sales growth of 2.5%. 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.

'Our strategic choices are having a positive impact on our growth and business momentum:

Priority markets: we have delivered good growth across our three priority markets of the US, China and India. South East Asia continues to be impacted by Covid-19, and was the main source of volume decline in the quarter

Channel: e-commerce grew 38% and is now 12% of our sales

Portfolio: our high-growth new businesses, Prestige Beauty and Functional Nutrition, each grew double digit and we completed the acquisition of digitally-native skin care brand Paula's Choice

Brands and innovation: our focus on impactful innovation has led to a step up on measured product superiority and average innovation project size

Organisation and culture: our organisational agility has allowed us to take rapid pricing actions in response to unprecedented cost inflation

'Cost inflation remains at strongly elevated levels, and this will continue into next year. 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.'

Our markets

The operating environment across our markets remains volatile, and restrictions on daily life continue around the world to varying degrees, impacting channel dynamics, sales mix and consumer behaviour.

In India as Covid-19 cases reduced and restrictions eased the operating environment improved. In China normalisation 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.

Unilever overall performance

Underlying sales growth was 2.5% with price of 4.1%, which is a step up from the first half of the year as we take pricing action to offset rising commodity and other input costs.

Our three priority markets of the US, India and China each grew strongly. In the US our food solutions, functional nutrition and Prestige Beauty businesses all contributed to growth, whilst in-home food and ice cream declined. We are continuing to see a trend of increased eating away from home and greater offline shopping. 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 price and a small decline on volume. Price increases have been taken in response to rising input costs. South East 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 price of 2.1%, although volume declined partly due to a strong prior year comparator in Home Care. E-commerce grew 38% and is now 12% of our sales.

Prestige Beauty and functional nutrition are delivering good growth. Underlying sales in functional nutrition grew double digit in the third quarter with vitamins, minerals and supplements brand OLLY, growing strongly. Prestige Beauty had a strong quarter growing double digit with the return to stores continuing.

Turnover increased 4.0%. There was a positive impact of 1.6% from acquisitions net of disposals and a negative impact of 0.1% from currency-related items.

We completed the operational separation of our tea business on 1 October 2021. We are focused on the next stage for this business which is expected to be either an IPO, sale or partnership.

Beauty & Personal Care

Beauty & Personal Care underlying sales grew 2.6%, with negative 1.3% from volume and 3.9% from price.

Skin care grew high single digit, with double digit growth from our 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. Hair care 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 skin care ingredients to hair, continued to perform well.

Oral care declined amidst challenging market conditions in South East Asia. Our Prestige Beauty brands grew double digit and vegan brand Hourglass launched its new customisable, refillable Curator eyeshadow palettes. We increased pricing in response to commodity inflation across categories and regions.

Home Care

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 our Comfort fragrance boosters continued to perform well in China. We lapped high demand for household cleaners during the prior year resulting in 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.

Foods & Refreshment

Foods & Refreshment underlying sales grew 3.0%, with negative 0.8% from volume and 3.8% from price.

Out of home ice cream grew with Asia and Europe both growing well as countries re-opened, although ongoing travel restrictions and poor weather in Europe means turnover has not yet recovered to 2019 levels. In-home ice cream declined as we lapped very strong growth in the prior period. Cornetto grew double digit supported by the launch of Cornetto Rose, the first ever rose shaped creamy ice cream.

Food solutions grew double digit with China and markets across Europe and Latin America delivering sales above 2019 levels. Consumer demand for in-home food remained strong, although sales in the third quarter were slightly down as we lapped a strong prior period of growth. Knorr and Hellmann's both grew mid-single digit supported by superior product performance and investments in sustainable packaging.

We have continued to take pricing action across foods and ice cream in response to commodity inflation.

Tea grew slightly led by pricing in India and Turkey.

Contact:

Media

E: Press-Office.London@unilever.com

Safe Harbour

Where relevant, these actions are subject to the appropriate consultations and approvals.

Forward-Looking Statements

This announcement may contain forward-looking statements, including 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words such as 'will', 'aim', 'expects', 'anticipates', 'intends', 'looks', 'believes', 'vision', or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Unilever Group (the 'Group'). They are not historical facts, nor are they guarantees of future performance.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Among other risks and uncertainties, the material or principal factors which could cause actual results to differ materially are: Unilever's global brands not meeting consumer preferences; Unilever's ability to innovate and remain competitive; Unilever's investment choices in its portfolio management; the effect of climate change on Unilever's business; Unilever's ability to find sustainable solutions to its plastic packaging; significant changes or deterioration in customer relationships; the recruitment and retention of talented employees; disruptions in our supply chain and distribution; increases or volatility in the cost of raw materials and commodities; the production of safe and high quality products; secure and reliable IT infrastructure; execution of acquisitions, divestitures and business transformation projects; economic, social and political risks and natural disasters; financial risks; failure to meet high and ethical standards; and managing regulatory, tax and legal matters. A number of these risks have increased as a result of the current Covid-19 pandemic.

These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Further details of potential risks and uncertainties affecting the Group are described in the Group's filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including in the Unilever Annual Report and Accounts 2020.

Contact:

T: +44 (0) 207 822 5252

E: Press-Office.London@Unilever.com

(C) 2021 Electronic News Publishing, source ENP Newswire

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Financials
Sales 2021 52 082 M 58 941 M 58 941 M
Net income 2021 5 795 M 6 558 M 6 558 M
Net Debt 2021 22 984 M 26 011 M 26 011 M
P/E ratio 2021 21,1x
Yield 2021 3,64%
Capitalization 119 B 135 B 135 B
EV / Sales 2021 2,73x
EV / Sales 2022 2,60x
Nbr of Employees 148 949
Free-Float 97,4%
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Number of Analysts 20
Last Close Price 3 951,50 GBX
Average target price 4 363,16 GBX
Spread / Average Target 10,4%
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Managers and Directors
Alan Jope Chief Executive Officer & Executive Director
Graeme David Pitkethly Chief Financial Officer & Executive Director
Nils Smedegaard Andersen Chairman
Richard Slater Chief Research & Development Officer
Nitin Paranjpe Chief Operating Officer
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