TIDMULVR
RNS Number : 7381P
Unilever PLC
21 October 2021
UNILEVER TRADING STATEMENT THIRD QUARTER 2021
Performance highlights
Underlying performance GAAP measures
vs 2020 vs 2020
============================ ========= ========== ========== ========
Third quarter
Underlying sales growth
(USG) 2.5% Turnover EUR13.5bn 4.0%
============================= ========= ========== ========== ========
Nine months
USG 4.4% Turnover EUR39.3bn 1.7%
Quarterly dividend payable in December 2021 EUR0.4268 per share
Third quarter highlights
-- 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
Alan Jope: Chief Executive Officer statement
"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: ecommerce 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."
21 October 2021
THIRD QUARTER OPERATIONAL REVIEW
Third Quarter 2021 Nine Months 2021
========================= =========================
(unaudited) Turnover USG UVG UPG Turnover USG UVG UPG
========================= ======== === ===== === ======== === === =====
EURbn % % % EURbn % % %
========================= ======== === ===== === ======== === === =====
Unilever 13.5 2.5 (1.5) 4.1 39.3 4.4 2.1 2.3
========================= ======== === ===== === ======== === === =====
Beauty & Personal Care 5.7 2.6 (1.3) 3.9 16.1 3.0 0.7 2.3
Home Care 2.7 1.4 (3.2) 4.8 7.9 3.5 2.1 1.4
Foods & Refreshment 5.1 3.0 (0.8) 3.8 15.3 6.3 3.5 2.7
======== === ===== === ======== === === =====
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. Ecommerce 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.
THIRD QUARTER OPERATIONAL REVIEW: GEOGRAPHICAL AREA
Third Quarter 2021 Nine Months 2021
=========================
(unaudited) Turnover USG UVG UPG Turnover USG UVG UPG
======================== ======== === ===== === ======== === === =====
EURbn % % % EURbn % % %
======== === ===== === ======== === === =====
Unilever 13.5 2.5 (1.5) 4.1 39.3 4.4 2.1 2.3
======================== ======== === ===== === ======== === === =====
Asia/AMET/RUB 6.1 2.3 (1.9) 4.2 18.1 5.8 3.5 2.2
The Americas 4.4 4.4 (0.7) 5.2 12.4 4.9 0.9 3.9
Europe 3.0 0.3 (1.8) 2.1 8.8 0.8 0.8 -
======== === ===== === ======== === === =====
Third Quarter 2021 Nine Months 2021
=========================
(unaudited) Turnover USG UVG UPG Turnover USG UVG UPG
======================== ======== === ===== === ======== === === =====
EURbn % % % EURbn % % %
======== === ===== === ======== === === =====
Emerging markets 7.7 3.9 (1.4) 5.4 22.7 6.7 3.4 3.3
Developed markets 5.8 0.6 (1.6) 2.3 16.6 1.2 0.4 0.9
======== === ===== === ======== === === =====
North America 2.8 2.0 (0.9) 2.9 7.9 2.4 0.3 2.0
Latin America 1.6 8.7 (0.4) 9.1 4.5 9.2 1.9 7.2
======== === ===== === ======== === === =====
Asia/AMET/RUB
Underlying sales grew 2.3% with 4.2% from price and volume
decline of 1.9% heavily impacted by South East Asian markets. India
grew double digit, balanced between volume and price. We have
continued to price in India in the third quarter to counter rising
input costs. In China high single digit volume-led growth was broad
based across divisions, with food service continuing to trade above
2019 levels. In Turkey double digit growth continued with price and
volume both positive. South East Asian markets declined in the
quarter as many Covid-19 restrictions were reimposed following high
case rates. Indonesia continues to be a challenging market with
strong competition.
The Americas
Underlying sales growth in North America was 2.0% with negative
0.9% from volume and 2.9% from price. As we lapped a period of very
high demand for in-home food and hygiene products in the prior
year, volumes declined slightly. Our Prestige Beauty and food
solutions businesses each grew double digit. We took pricing action
in response to commodity inflation.
Latin America grew 8.7% with positive pricing of 9.1%, and a
slight volume decline of 0.4%. In response to high commodity
inflation combined with currency devaluation, we delivered double
digit underlying price growth in Brazil and volume declined. Mexico
and Argentina grew both price and volume.
Europe
Underlying sales grew 0.3% with price of 2.1% and volume
declined 1.8%. Pricing actions are being taken in countries across
Europe. Volume decline was led by Home Care which was lapping high
single digit growth in the third quarter of 2020. Italy grew with a
good performance in ice cream after a decline in the prior year and
the Netherlands also grew, with foods and Home Care delivering
mid-single digit growth. The UK declined low single digit as we
lapped strong growth in the third quarter of 2020, particularly in
Foods & Refreshment. Germany declined mid-single digit, with a
slow ice cream quarter due to poor weather and a declining Beauty
& Personal Care market.
COMPETITION INVESTIGATIONS
As previously disclosed, Unilever is involved in a number of
ongoing investigations and cases by national competition
authorities, including those within Italy, France, Greece, South
Africa and Turkey. These proceedings and investigations are at
various stages and concern a variety of product markets. Where
appropriate, provisions are made and contingent liabilities
disclosed in relation to such matters.
Ongoing compliance with competition laws is of key importance to
Unilever. It is Unilever's policy to co-operate fully with
competition authorities whenever questions or issues arise. In
addition the Group continues to reinforce and enhance its internal
competition law training and compliance programme on an ongoing
basis .
DIVIDS
The Board has declared a quarterly interim dividend for Q3 2021
of GBP0.3598 per Unilever PLC ordinary share or EUR0.4268 per
Unilever PLC ordinary share at the applicable exchange rate issued
by WM/Reuters on 19 October 2021.
Per Unilever PLC ordinary share (traded on the London Stock Exchange): GBP 0.3598
Per Unilever PLC ordinary share (traded on Euronext in Amsterdam): EUR 0.4268
Per Unilever PLC American Depositary Receipt: US$ 0.4975
The euro and US dollar amounts above have been determined using
the applicable exchange rates issued by WM/Reuters on 19 October
2021.
US dollar cheques for the quarterly interim dividend will be
mailed on 1 December 2021 to holders of record at the close of
business on 5 November 2021.
The quarterly dividend calendar for the remainder of 2021 will
be as follows:
Announcement Ex-Dividend Record Date Payment Date
Date Date
================= ============= ============ ============
Q3 2021 Dividend 21 October 4 November 5 November 1 December
2021 2021 2021 2021
============= ============ ============ =============
SEGMENT INFORMATION - DIVISIONS
(unaudited)
Third Quarter Beauty & Foods & Total
Personal Home Refreshment
Care Care
========= ====== ============
Turnover (EUR million)
2020 5,348 2,591 4,991 12,930
2021 5,691 2,635 5,127 13,453
Change (%) 6.4 1.7 2.7 4.0
Impact of:
Acquisitions (%) 3.9 - - 1.6
Disposals (%) - - (0.2) (0.1)
Currency-related items (%), of which: (0.2) 0.3 (0.1) (0.1)
====== ============ ======
Exchange rates changes (%) (0.4) (0.2) (0.4) (0.4)
Extreme price growth in hyperinflationary
markets* (%) 0.2 0.5 0.4 0.3
====== ============ ======
Underlying sales growth (%) 2.6 1.4 3.0 2.5
================================================ ====== ============ ======
Price* (%) 3.9 4.8 3.8 4.1
Volume (%) (1.3) (3.2) (0.8) (1.5)
================================================ ========= ====== ============ ======
Nine Months Beauty & Home Foods & Total
Personal Care Refreshment
Care
========= ===== ============
Turnover (EUR million)
2020 15,948 7,912 14,762 38,622
2021 16,108 7,826 15,336 39,270
Change (%) 1.0 (1.1) 3.9 1.7
Impact of:
Acquisitions (%) 2.8 - 1.1 1.6
Disposals (%) - (0.1) (0.2) (0.1)
Currency-related items (%), of which: (4.6) (4.3) (3.1) (4.0)
===== ============ ======
Exchange rates changes (%) (4.8) (4.6) (3.4) (4.2)
Extreme price growth in hyperinflationary
markets* (%) 0.2 0.3 0.2 0.2
===== ============ ======
Underlying sales growth (%) 3.0 3.5 6.3 4.4
================================================ ===== ============ ======
Price* (%) 2.3 1.4 2.7 2.3
Volume (%) 0.7 2.1 3.5 2.1
================================================ ========= ===== ============ ======
* Underlying price growth in excess of 26% per year in
hyperinflationary economies has been excluded when calculating the
price growth in the tables above, and an equal and opposite amount
is shown as extreme price growth in hyperinflationary markets .
Turnover growth is made up of distinct individual growth
components namely underlying sales, currency impact, acquisitions
and disposals. Turnover growth is arrived at by multiplying these
individual components on a compounded basis as there is a currency
impact on each of the other components. Accordingly, turnover
growth is more than just the sum of the individual components.
SEGMENT INFORMATION - GEOGRAPHICAL AREA
(unaudited)
Third Quarter Asia / The Europe Total
AMET / Americas
RUB
======== ========== =======
Turnover (EUR million)
2020 5,987 3,994 2,949 12,930
2021 6,094 4,360 2,999 13,453
Change (%) 1.8 9.2 1.7 4.0
Impact of:
Acquisitions (%) 0.1 4.6 0.4 1.6
Disposals (%) - - (0.3) (0.1)
Currency-related items (%), of which: (0.6) (0.1) 1.3 (0.1)
======== ========== ======= ======
Exchange rates changes (%) (0.7) (1.0) 1.3 (0.4)
Extreme price growth in hyperinflationary
markets* (%) 0.1 0.9 - 0.3
======== ========== ======= ======
Underlying sales growth (%) 2.3 4.4 0.3 2.5
=============================================== ======== ========== ======= ======
Price* (%) 4.2 5.2 2.1 4.1
Volume (%) (1.9) (0.7) (1.8) (1.5)
=============================================== ======== ========== ======= ======
Nine Months Asia / The Europe Total
AMET / Americas
RUB
======= ========= ======
Turnover (EUR million)
2020 17,788 12,200 8,635 38,622
2021 18,132 12,409 8,729 39,270
Change (%) 1.9 1.7 1.1 1.7
Impact of:
Acquisitions (%) 1.0 3.4 0.1 1.6
Disposals (%) - (0.1) (0.3) (0.1)
Currency-related items (%), of which: (4.6) (6.1) 0.4 (4.0)
======= ========= ====== ======
Exchange rate changes (%) (4.7) (6.7) 0.4 (4.2)
Extreme price growth in hyperinflationary
markets* (%) 0.1 0.6 - 0.2
======= ========= ====== ======
Underlying sales growth (%) 5.8 4.9 0.8 4.4
=============================================== ======= ========= ====== ======
Price* (%) 2.2 3.9 - 2.3
Volume (%) 3.5 0.9 0.8 2.1
=============================================== ======= ========= ====== ======
* Underlying price growth in excess of 26% per year in
hyperinflationary economies has been excluded when calculating the
price growth in the tables above, and an equal and opposite amount
is shown as extreme price growth in hyperinflationary markets .
In our financial reporting we use certain measures that are not
defined by generally accepted accounting principles (GAAP) such as
IFRS. We believe this information, along with comparable GAAP
measurements, is useful to investors because it provides a basis
for measuring our operating performance, and our ability to retire
debt and invest in new business opportunities. Our management uses
these financial measures, along with the most directly comparable
GAAP financial measures, in evaluating our operating performance
and value creation. Non-GAAP financial measures should not be
considered in isolation from, or as a substitute for, financial
information presented in compliance with GAAP. Wherever appropriate
and practical, we provide reconciliations to relevant GAAP
measures. The non-GAAP measures used in this announcement are
underlying sales growth, underlying volume growth and underlying
price growth (see below).
Underlying sales growth (USG)
Underlying sales growth (USG) refers to the increase in turnover
for the period, excluding any change in turnover resulting from
acquisitions, disposals, changes in currency and price growth in
excess of 26% in hyperinflationary economies. Inflation of 26% per
year compounded over three years is one of the key indicators
within IAS 29 to assess whether an economy is deemed to be
hyperinflationary. We believe this measure provides valuable
additional information on the underlying sales performance of the
business and is a key measure used internally. The impact of
acquisitions and disposals is excluded from USG for a period of 12
calendar months from the applicable closing date. Turnover from
acquired brands that are launched in countries where they were not
previously sold is included in USG as such turnover is more
attributable to our existing sales and distribution network than
the acquisition itself. The reconciliation of changes in the GAAP
measure turnover to USG is provided on pages 5 and 6.
Underlying price growth (UPG)
Underlying price growth (UPG) is part of USG and means, for the
applicable period, the increase in turnover attributable to changes
in prices during the period. UPG therefore excludes the impact to
USG due to (i) the volume of products sold; and (ii) the
composition of products sold during the period. In determining
changes in price we exclude the impact of price growth in excess of
26% per year in hyperinflationary economies as explained in USG
above. The measures and the related turnover GAAP measure are set
out on pages 5 and 6.
Underlying volume growth (UVG)
Underlying volume growth (UVG) is part of USG and means, for the
applicable period, the increase in turnover in such period
calculated as the sum of (i) the increase in turnover attributable
to the volume of products sold; and (ii) the increase in turnover
attributable to the composition of products sold during such
period. UVG therefore excludes any impact on USG due to changes in
prices. The measures and the related turnover GAAP measure are set
out on pages 5 and 6 .
CAUTIONARY STATEMENT
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 Annual Report on Form 20-F
2020 and the Unilever Annual Report and Accounts 2020 available on
our corporate website.
ENQUIRIES
Media: Media Relations Team Investors: Investor Relations
Team
+44 78 2527
3767
UK +44 77 7999 lucila.zambrano@unilever.com
or 9683 JSibun@tulchangroup.com
NL +31 10 217 4844 els-de.bruin@unilever.com +44 20 7822
or +31 62 375 8385 marlous-den.bieman@unilever.com 6830 investor.relations@unilever.com
There will be a web cast of the results presentation available
at:
www.unilever.com/investor-relations/results-and-presentations/latest-results
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