DIpil Das
3Q19 Trading Update
For 3Q19, Unilever reported revenue of €13.3 billion, slightly above the consensus of €13.2 billion and with underlying sales up 2.9% year over year. Revenue in the beauty and personal care segment was up 2.8% to €5.6 billion. The food and refreshment segment grew 1.7% to €5.0 billion, and home care was up 5.4% year over year to €2.7 billion.
Performance by Segment
- Beauty and personal care 3Q19 revenue was €5.6 billion as reported. Underlying sales growth was 2.8%, with volumes and pricing contributing 2.1% and 0.7%, respectively. Deodorants’ good performance was led by the Rexona Clinical range. Skin care performed well driven by innovations including Pond’s Glow Up cream — a hybrid product that crosses skin care and makeup categories. Skin cleansing saw modest growth, with negative pricing as commodity prices remained weak. Hair care saw high competitive intensity, particularly in China and the US. Nevertheless, the company’s prestige brands, such as Dermalogica, Hourglass and Living Proof, continued to perform well.
- Food and refreshment 3Q19 revenue grew to €5.0 billion. Underlying sales growth was 1.7%, while volumes were down 0.2% and pricing contributed 1.9%. The volume decline was driven by ice cream due to a particularly good weather last year in Europe. Overall ice cream grew slightly, while tea saw modest growth driven by fruit and herbal variants.
- Home care 3Q19 revenue was €2.7 billion as reported. Underlying sales growth was 5.4% year over year with volumes contributing 3.2% and pricing contributed 2.1%. Hand dishwash was a key driver with the Sunlight brand, Brilhante brand in Brazil and Omo in China. Cif surface cleaners saw double digit growth, mainly driven by natural variants and new concentrated eco-refills launched in Europe. Fabric sensations saw strong growth driven by the company’s strategy to trade up consumers through offering products with more benefits. Growth in fabric solutions was muted, due in part to challenging conditions in Africa.
- Asia/AMET/RUB: 3Q19 revenue in the Asia/Africa, Middle East and Turkey (AMET) region plus the Russia, Ukraine and Belarus (RUB) segment grew underlying sales by 5.6% year over year to €6.1 billion, with volume and price growing at 3.1% and 2.5%. Southeast Asia grew, driven by strong volume, with Indonesia, Vietnam and the Philippines performing strongly across all divisions. Turkey and the Middle East grew by double digits, while Africa saw a difficult quarter amid volatile economic conditions.
- The Americas: 3Q19 revenue in the Americas grew underlying sales by 1.5% to €4.2 billion. Latin America sales grew 3.2% year over year. Underlying sales growth in North America was positive, supported by price growth.
- Europe: 3Q19 revenue in the Europe segment was down 0.3% year over year to €3.0 billion, with volumes up 0.5% and price contributing (0.9)%. Eastern Europe grew well across all divisions. Strong growth in Italy was helped by purpose-led activations. The decline in Germany slowed. Ice cream volumes were down because of the good weather in the previous year.