Unilever withdraws outlook after coronavirus hits sales
Unilever has withdrawn its outlook for the year after reporting sales were flat in the first quarter, despite an increase in demand for hygiene and in-home food products.
Underlying sales growth was flat with 0.2 per cent from volume and negative 0.2 per cent from price. Turnover increased 0.2 per cent to €12.4bn.
The coronavirus pandemic has led to changes in Unilever’s operations as lockdowns and travel restrictions impact consumer demand patterns.
Consumers adapt to lockdown
Sales of Unilever’s home care brands increased 2.4 per cent. Home and hygiene products, including Cif and Domestos benefitted from demand for household cleaning products.
Sales of food and refreshment brands dropped 1.7 per cent. The largest volume decline was in ice cream, as sales were significantly hit by lockdowns and an uncertain holiday and tourism season.
This was offset somewhat by an increase in in-home consumption and household stocking in the US and Europe. Knorr and Hellmann’s both increased sales in the period.
Chief executive Alan Jope said the severity and duration of the pandemic means the company cannot “reliably assess the impact across our markets and our business.” As such, Unilever is withdrawing its previous growth and margin outlook for the year.
Developed markets grew 2.8 per cent while emerging markets fell 1.8 per cent. China declined as a result of the significant downturn in food service and retail sales during the lockdown in January.
Outside China, most of Unilever’s major markets saw normal sales patterns in January and February. The Chinese market slowed significantly during the lock-down period, while Europe
and North America stocked household goods across March.
Unilever said conditions in Latin America “remain challenging”, as before coronavirus, but there was some household stocking towards the end of the quarter.
The consumer goods giant confirmed it would pay a quarterly interim dividend of € 0.41 per share in June. In a statement, Unilever said it would announce the second quarter dividend in July, and the third in October.